The Coca-Cola Company will pay $21 million to the plaintiffs of a class action lawsuit, which alleged the company had falsely marketed its Fairlife branded milk as coming from humanely treated dairy cows. An Illinois federal judge granted preliminary approval to the beverage giant last week to settle the case, which stems from an investigation into the mistreatment of cows at a Fairlife supplier farm.
The case was brought against Coke and Fairlife in 2019, after an undercover investigation by Animal Recovery Welfare (ARM) produced videos displaying graphic abuse of cows at Indiana-based Fair Oaks Farm, which is owned by the brand’s founders Sue and Mike McCloskey. The video showed workers committing acts of animal cruelty against livestock, including beating, kicking, and tossing newborn calves.
Per the terms of the settlement agreement, Fairlife will create animal welfare oversight programs at all of its supplier farms. According to the brand’s most recent stewardship report, it has invested over $8 million into animal welfare programs, including installing cameras to monitor all human-animal interactions at supplier farms, over the past year.
“When it comes to how we do business, our responsibility to care for people, animals and the planet remains our focus,” the report states. “To put these values into action, we committed to becoming B Corp certified and are on track to achieve this designation in early 2022. Our partnerships with our supplying farms and shared commitment to animal welfare once again resulted in 100% passage of critical care standards.”
Additionally, a spokesperson for Fairlife told FoodNavigator it has not sourced milk from Fair Oaks Farm since 2019 when the video surfaced.
However, since the nature of the suit was not focused on the company’s animal welfare concerns, but rather false advertising regarding the treatment of the animals, the terms of the settlement primarily pertains to payouts. The suit alleges that the plaintiffs feel they were misled and would not have purchased the product if it hadn’t been sourced from humanely treated cows.
Fairlife was fully acquired by Coca-Cola in 2020 and the lawsuit and subsequent settlement names both Fairlife LLC and Coca-Cola, as well as Fairlife suppliers Select Milk Producers Inc., Fair Oaks Farms LLC and the brand’s founders as defendants.
According to the settlement, the attorneys are requesting an award of no more than one-third of the fund. The 19 class members each request a $3,500 service award. The settlement will also award a total potential payout of $100 to eligible class members, including up to $20 for claims without a proof of purchase and up to $80 for claims with a proof of purchase.
The ARM video also spurred additional lawsuits, including criminal charges brought by local law enforcement against three of the four employees shown in the 2019 video.
Beyond litigation, the video also led multiple retailers to pull Fairlife products from their shelves, including Indiana-based convenience chain Family Express, grocer Strack & Van Til, and Albertsons-owned grocer Jewel-Osco. The former told BevNET at the time that its decision to cancel orders was determined by Fair Oaks’ inadequate response.
The final hearing to approve the settlement motion is scheduled for September 28, 2022 and the objection deadline is set for August 25.