Lenny and Larrys protein cookies.

A federal judge gave final approval to a class action settlement over Lenny & Larry's cookies after the U.S. Justice Department insisted that the lawyers should sweeten the deal for class members.

The DOJ had filed a statement of interest in the case objecting to the $1.2 million in attorney fees and expenses, which made up most of the cash portion of the deal, particularly since each class member would receive up to $50 cash and $30 worth of cookies. The revised settlement, valued at $2.3 million, down from the original deal's estimate of $5 million, gave more cash to consumers, while plaintiffs lawyers cut their fee request to $410,000.

On May 2, U.S. District Judge Robert Gettleman of the Northern District of Illinois approved the amended settlement and attorney fees, which are due in 30 days.

“Throughout this litigation, Lenny & Larry's denied liability, and the judge repeatedly granted motions to dismiss,” Robert Wallan, of Pillsbury Winthrop Shaw Pittman's Los Angeles office, who represents Lenny & Larry's Inc., said in an emailed statement. “But class actions like this are expensive and uncertain. The class action lawyers' fees dropped sharply in light of the agreement amendments, which we see as a good outcome.”

Plaintiffs' attorney Edward Wallace, of Wexler Wallace in Chicago, did not respond to a request for comment.

Kelly Laco, a spokeswoman for the Department of Justice, which filed a statement of interest April 16 supporting the revised agreement, declined to comment. But, at the time that lawyers filed the revised settlement last month, Assistant Attorney General Jody Hunt, of the Department of Justice's civil division, released a statement praising the new deal.

“The Class Action Fairness Act is designed to help ensure that class action settlements do not unreasonably benefit attorneys or third parties at the expense of the consumers involved,” he said. “The Department of Justice will continue to take action when we see unsuitable class action settlements.”

Separately, the DOJ also filed a Feb. 4 amicus brief challenging a settlement over allegedly defective Tristar pressure cookers that gave $2.3 million to plaintiffs attorneys and discount coupons to class members. The Arizona Attorney General's office, joined by 17 other states, has petitioned the U.S. Court of Appeals for the Sixth Circuit to unravel that deal.

The cookie case alleged that Lenny & Larry's, based in Panorama City, California, mislabeled the protein content on the packaging of all 11 flavors of its product, The Complete Cookie. After several amended complaints, which reduced the size of the class, the settlement compensated customers nationwide.

Gettleman gave preliminary approval of the settlement Nov. 1, but the DOJ filed a statement of interest Feb. 15.

The DOJ can challenge class action settlements under the Class Action Fairness Act of 2005 but, until last year, has declined to do so. That's when former Associate Attorney General Rachel Brand said the DOJ would be more aggressive in pinpointing class action settlements with problems.

Soon afterward, government lawyers filed a statement of interest urging a federal judge in New Jersey to reject a settlement that would have given nearly $2 million in fees to plaintiffs lawyers and vouchers to class members in a case alleging false pricing advertisements on the website Wines Til Sold Out. U.S. District Judge Renee Bumb of the District of New Jersey rejected the deal, but after the DOJ withdrew its objection.

In the original settlement with Lenny & Larry's, the DOJ estimated only $350,000 in cash went to the class members, and suggested that fees should be in the range of $228,000 to $463,000. The government was particularly critical of a provision that gave potentially $3.15 million in free cookies to General Nutrition Centers Inc. and The Vitamin Shoppe in the event that not enough class members make claims.

But class members made 66,647 valid claims by the Jan. 29 deadline. And the vast majority wanted cash, not cookies.

That unusually high claims rate—not the DOJ's objection—prompted lawyers to redraft the settlement, they wrote.

“The parties believed that despite their lengthy efforts to notify class members of the settlement, the notice program would not elicit a significant response,” Wallace wrote in an April 2 motion for final approval of the revised settlement. “However, based on the overwhelming response to the settlement program, the parties have amended the settlement to increase the benefits that go directly to claimants instead of distributing free products through third-party retailers.”

The new settlement provides a cash fund of at least $889,000, and each class member could receive up to $35 in free cookies.

It also grants $410,000 in fees and $37,000 in expenses to the lawyers.

In addition to Wallace, Nick Suciu of BMST Law Firm in Bloomfield Hills, Michigan, and Steve Wasserman of Wasserman Law Group in Tarzana, California, sought fees in the case.

Ted Frank, a class action critic who filed an objection that raised many of the same issues as the DOJ had about the Lenny & Larry's deal, said in an April 23 court filing that he had no problems with the revised settlement. He also said he would be seeking attorney fees for his work in the case.