Pet food settlement appeal decided

Small hurdle remains before claims can be paid

Published: December 20, 2010
By Edie Lau

An appeals court that reviewed a $24-million class-action suit settlement over melamine-contaminated pet food has concluded that the deal is “fair, reasonable and adequate” except for one minor issue.

The issue relates to the limit of purchase claims to a maximum of $250,000. The U.S. Court of Appeals for the Third District, in an opinion filed Thursday, sent the case back to U.S. District Court Judge Noel Hillman in New Jersey for more information to support the purchase-claim limit. It was Hillman who approved the settlement in November 2008. Appeals filed by two separate parties blocked disbursements from the settlement fund.

Lisa Rodriguez, liaison counsel for the multiple class-action suits covered by the settlement, described the appeals court’s single concern as minor. Purchases are just one category of expense under which claimants may seek reimbursement. Rodriguez said the decision generally is favorable to the claimants.

“I think it’s a very good opinion,” Rodriguez told the VIN News Service. “It wasn’t ... particularly critical. They just wanted additional findings.”

Rodriguez said lawyers on the case will try to get “a quick turnaround date” with the judge to settle the matter once and for all. “Early January is our hope,” she said.

The delayed resolution to the pet food settlement has salted the wounds of people whose pets were killed or sickened by melamine and cyanuric acid found in more than 150 brands of dog foods and treats in 2007. The contamination led to the largest pet food recall in North American history, involving more than 60 million containers of pet food.

According to information in the appellate court decision, 24,344 claims were submitted by the Nov. 24, 2008, deadline. Of those, 20,550 have been deemed payable. The average claim is about $1,283, for a total estimated payable amount of $26,365,575.41, which exceeds the settlement fund by more than $2 million.

In addition, plaintiffs’ lead counsel may apply for reimbursement of attorneys’ fees for a total of up to $7.45 million, plus reimbursement of expenses. The fund covers claims and legal costs in the United States and Canada.

The pet food scandal was caused by unscrupulous suppliers in China who spiked wheat gluten and rice protein with nitrogen-rich melamine in an attempt to boost the products’ apparent protein levels.

Melamine is an industrial chemical not approved for consumption. If ingested, it can combine with the chemical byproduct cyanuric acid to form crystals in the kidneys, causing potentially fatal renal blockage.

Tainted imported product was sold to Menu Foods, a Canadia manufacturer that produced private-label and name-brand wet pet foods for a variety of companies. The contamination affected pet food giants including Hill’s Pet Nutrition, Mars, Inc., Nestle Purina PetCare Co., The Iams Co. and Procter & Gamble, along with prominent retail chains such as Walmart, Target, Costco, Petsmart and Petco.

Owners of ChemNutra, the company that imported the adulterated wheat gluten and rice protein, pleaded guilty last year to charges stemming from the scandal. The company and its owners, Sally Qing Miller and Stephen S. Miller, were fined a total of $35,000. The Millers were spared prison sentences but each given three years of probation.

Information on the settlement and associated legal documents, including the appellate court decision, are posted on the Internet.

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