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July 30, 2015 4:17 PM ET

Food Products

Company Overview of Dakota Growers Pasta Company, Inc.

Company Overview

Dakota Growers Pasta Company, Inc. manufactures and supplies pasta products to retail private label, foodservice, and ingredient channels. The company offers various pasta shapes and formulas, including long cuts, elbows, tubes, shells, twists, soup cuts, egg noodles, and specialty products. Its pasta products are used for salads, frozen entrées, dry dinner kits, or retorts. The company was founded in 1990 and is based in Carrington, North Dakota. As of January 1, 2014, Dakota Growers Pasta Company, Inc. operates as a subsidiary of Post Holdings, Inc.

One Pasta Avenue

PO Box 21

Carrington, ND 58421

United States

Founded in 1990

445 Employees

Phone:

952-460-7401

Fax:

701-652-3552

Key Executives for Dakota Growers Pasta Company, Inc.

Chief Executive Officer, President and Member of Nomination Committee
Age: 60
Chief Financial Officer, Chief Accounting Officer and Company Secretary
Age: 44
Compensation as of Fiscal Year 2015.

Dakota Growers Pasta Company, Inc. Key Developments

Dreamfields Purchasers Files a Class Action Lawsuit, Against Dakota Growers Pasta Co

Dakota Growers Pasta Co. produces, markets and sells Dreamfields pasta. Several Dreamfields purchasers filed a class action lawsuit, alleging that Dakota Growers deceptively marketed its product as a healthy alternative to traditional pasta. Advertisements for Dreamfields stated that it had a lower glycemic index than traditional pasta and contained only five grams of digestible carbohydrates. The parties engaged in mediation and reached a settlement agreement. Dakota Growers agreed to create a settlement fund of $5 million and to remove the challenged advertising for a period of one year. Additionally, Dakota Growers agreed to pay attorneys' fees and expenses of $2.9 million separate and apart from the settlement fund. The district court concluded that approval of the settlement agreement was appropriate. Continued litigation would involve significant time and money. Extensive discovery and motion practice could ultimately culminate in a complicated and lengthy trial. While settlement was reached early in the litigation, the plaintiffs conducted enough research and investigation into the factual and legal basis for their claims to assess the merits of the case and the value of the settlement. The district court found there was a risk in proceeding to trial. The case would likely end up being a battle of the experts. The settlement provided meaningful relief without the delay of protracted litigation. The plaintiffs faced the risk of not obtaining and maintaining a certified class if the case proceeded to trial. The district court noted that if a class was not certified for settlement purposes, very few class members would have the resources to pursue claims individually. The requested fee award of $2.9 million was reasonable. Even if the parties agreed that fees would come from the common fund, the fee award would be approximately 36.8% of the cash value of the fund. The district court observed that fees in the 30% range are not uncommon in the Third Circuit. The injunctive relief that class members would receive underscored the reasonableness of the percentage. The settlement agreement, as a whole, was fair, adequate and reasonable. The district court awarded $2.9 million in fees, noting that the fee award adequately compensated counsel for their experience, the risk of nonpayment when undertaking the case and the benefits they obtained for the class.

Dakota Growers Pasta Settles False-Advertising Lawsuit

The complaint, filed last summer against Dakota Growers Pasta and its parent company at the time, challenged claims that the product was a low-carbohydrate alternative to traditional pasta but didn't sacrifice the taste. Dreamfields is marketed under the slogan "Healthy Carb Living." Under the agreement, consumers will be refunded $1.99 for each box of pasta bought since February 2004. It limits the payments to 15 boxes of pasta bought at any store, but all boxes bought online will be reimbursed. The deal also calls for new labeling. A U.S. District judge who presided over the mediation called the settlement "extraordinary." On May 09, 2014, U.S. District Judge Joel Pisano in New Jersey signed a preliminary approval order for the settlement; a Sept. 24 hearing has been set to finalize the deal. There were two separate federal complaints in the case. One suit was filed in New Jersey on July 23, 2013, and brought by men from New Jersey, New York, California and Michigan; the other action was filed in Minnesota by a man from Texas on July 19, 2013. The plaintiffs said they would not have bought the more expensive Dreamfields pasta had they known about the false claims on carbohydrate intake and low glycemic index, a system that ranks foods on a scale from 1 to 100 based on their effect on blood-sugar levels and is often monitored by people with diabetes. Dreamfields had touted its patent-pending formula and unique manufacturing process that created what it called a matrix within the pasta that kept 31 grams of carbs per serving from being digested. Each box stated there were only five grams of digestible carbs per serving and it had a 65% lower glycemic index than regular pasta.

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