Consumers who thought they were buying antibiotic-free chicken could receive $5 million in cash and coupons under a proposed settlement to a lawsuit contending that the nation's largest poultry producer falsely promoted its birds as being raised without drugs.
The deal to end a class action lawsuit against Tyson Foods will get its first public hearing Friday, when a federal judge in Baltimore is scheduled to review it for fairness. If approved, thousands of U.S. consumers could receive refunds of up to $50 per household.
"While we believe our company acted appropriately, we also believe it makes sense for us to resolve this legal matter and move on," Tyson spokesman Gary Mickelson said in an e-mailed statement. The Arkansas company denies any wrongdoing under the deal, outlined in a U.S. District Court filing late Tuesday.
Numerous consumer lawsuits were filed across the country in 2008, and later consolidated in Baltimore, alleging that Tyson lied about the drugs that go into its birds, a hotly debated issue within the poultry and health care industries.
Doctors and researchers worry that treating the animals that people eat with antibiotics could lead to drug-resistant "superbugs" dangerous to people. But chicken farmers say that certain antibiotics that prevent intestinal illness are safe, as long as they're not the kind of drugs that go into human medication.
Most major chicken producers use such antibiotic "ionophores" to keep their poultry healthy, including Tyson, and the practice generally does not bother food-safety advocates. What was more troubling to some, however, was that the company also injected eggs with a vaccine that contained a component used in human therapies.
Tyson said injecting the eggs before they became birds left the company free to claim that it didn't "raise" its chickens with such drugs, a semantic argument rejected by the U.S. Department of Agriculture, which ordered the business to alter its labeling after discovering that it routinely administered the gentamicin injections.
The company had previously been approved to label its packages as "raised without antibiotics" in the summer of 2007 and months later, after review, as "raised without antibiotics that impact antibiotic resistance in humans."
The packaging claims caused competitors, including Maryland's Perdue Farms, to file a lawsuit in January 2008, complaining that Tyson's claims made their birds look bad by implication. That lawsuit was also settled without an admission of wrongdoing, but even before that, the consumer lawsuits began creeping up.
Eight suits were eventually filed in five states by 22 plaintiffs, including six who filed in Baltimore's U.S. District Court. The cases were consolidated in Baltimore before Judge Richard D. Bennett.
A combined and corrected complaint, with four named plaintiffs, including Baltimore consumer Mary Cutsail, representing the classes, was filed in February. It accused Tyson of consumer fraud by mislabeling products as antibiotic-free "in order to seize on the opportunity to profit from the consuming public's growing demand for healthier and natural food products."
The complaint said that consumers would not have bought the chicken at the prices they paid had the products been properly labeled.
The proposed settlement would end the costly litigation, which has required Tyson to produce roughly 450,000 pages of documentation.
Under the proposal, U.S. consumers who bought Tyson chicken with the antibiotic-free labeling between June 19, 2007, when it began, and April 2009, when it was withdrawn, are considered members of the "settlement class," eligible to apply for cash or coupon refunds. That means anyone who bought fresh, frozen or deli chicken during that time, Cornish hens or tenders.
Those who saved their cash register receipts are qualified for refunds of up to $50 per household, while those who don't have such documentation are entitled to $10 if they "declare under penalty of perjury" that they've spent more than that on qualified Tyson products, describing how much they spent on what kind of product, where and how often. Those who can't do that can get a $5 Tyson coupon if they declare that they've purchased "at least one" Tyson product with the antibiotic labeling.
If the claims made under the settlement agreement total less than $5 million, Tyson will donate its products to food banks to make up the difference.
Washington attorney James Pizzirusso, one of the lead lawyers for the plaintiffs in the case, said the settlement is acceptable "because it provides full refunds for consumers who purchased these products, not a percentage of the purchase price, but full compensation" without the risk of losing at trial or being overturned on appeal.
"Right now, we can get compensation into the hands of the settlement class," he said.