Salmon farming giant Mowi has agreed to pay $1.3 million (€1 million) to settle a class action suit filed by a New York-based catering company alleging the company deceptively marketed its Ducktrap brand smoked salmon as "sustainable" and "eco-friendly."
The parties reached an agreement in February, according to documents filed with a New York court on Tuesday. With funds from that $1.3 million settlement, Mowi also agreed not to oppose "Class Representative Service Awards" of $7,500 (€6,298) to Neversink General Store and up to $1,500 (€1,260) to fellow plaintiff Brenda Tomlinson to "compensate them for the actions they took in their capacities as class representatives" in the case.
Mowi also agreed to pay the settlement class attorney’s fees and costs awarded by the court up to a maximum of $360,000 (€301,000).
"After several rounds of hard-fought, arm’s-length negotiations, the Parties reached a fair, adequate, and reasonable Settlement," details provided in court documents state.
The judge still has to approve the settlement for it to be finalized.
The lawsuit, filed with a US District Court in the Southern District of New York in November, includes allegations similar to a lawsuit filed earlier this year by a nonprofit consumer group over Mowi's smoked salmon products sold under its Ducktrap brand.
Attorneys representing the plaintiff -- a retail store, gas station and catering operation -- said while they believe their client "would ultimately prevail" in a trial, the settlement was acceptable to resolve the issue.
Neversink General Store, which operates its catering business and gas station in a town of 3,400 people, alleged Mowi's deceptive marketing practices included its Ducktrap brand not meeting the Federal Trade Commission’s (FTC) guidelines for labeling products as “sustainable” and “eco-friendly.”
The lawsuit alleged Mowi’s products are instead “sourced from salmon that are farmed using unsustainable and environmentally destructive practices."
The suit also alleged Mowi’s Ducktrap branded products mislead consumers to believe they are made from salmon produced in Maine.
“In truth, the products are made from salmon industrially farmed outside of the United States,” the lawsuit says.
As part of the settlement, for a period of two years Mowi will be forbidden from using the terms "sustainably sourced," "all natural" and "naturally smoked salmon from Maine" on any Ducktrap packaging.
The ruling does not prohibit Mowi from using the terms or similar terms on other products that meet the bar for use of the language.
Mowi is also being sued as part of price-fixing lawsuits in Canada and the United States and is under investigation in Europe for colluding to control prices. The US Justice Department has also opened a criminal investigation in antitrust issues involving Mowi and other leading salmon farming companies.
Mowi Group Communications Director Ola Helge Hjetland declined to comment to IntraFish on Thursday on the proposed settlement, but said the company would release details in the near future.
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