The plaintiffs filed a class action on behalf of U.S. consumers (excluding California) alleging that Kashi, a wholly-owned subsidiary of Kellogg, had falsely claimed that its products were “all-natural” when they actually contained genetically modified organisms which the plaintiffs claimed could result in insecticides and other chemicals inserted into plants’ genetic codes remaining in consumers’ blood after ingestion. The relevant products included Kashi GoLean Crunch! cereal and a number of Kashi-branded granola and protein bars.
Econ One was retained by counsel for the plaintiff class to quantify damages to consumers attributable to the defendants’ false claims. Dr. David Sharp submitted an expert report which utilized hedonic regression methodology in order to calculate class-wide damages based on the price premium that consumers paid that was associated with the defendants’ “all natural” claim. The case settled prior to trial when the defendant agreed to compensate consumers and remove the “all natural” claims from products containing the challenged ingredients.