A federal judge in Florida on Friday recommended approving a confidential settlement between Dollar Tree and the parents of a toddler who consumed lead from WanaBana cinnamon applesauce pouches, saying it's in the child's best interests given the ongoing litigation over the recalled snacks.
U.S. Magistrate Judge Marty Fulgueira Elfenbein said that the settlement between Dollar Tree and the minor's parents, Chelsea Windham and Vincent Windham, is fair and reasonable and was made in consideration of the anticipated difficulties in recovering a judgment against the chain discount store and WanaBana LLC, which has filed for Chapter 7 bankruptcy.
An attorney appointed as guardian ad litem for the minor — referred to as S.W. in the judge's recommendation — said the proposed settlement should be approved after he reviewed the case, according to the recommendation.
The guardian ad litem, Patrick Massa, additionally said that the costs were significant but necessary, and that the child's lawyer had cut his costs by $20,000 to end the case. The lawyer, John Scarola of Searcy Denney Scarola Barnhart & Shipley PA, also lowered his contingency fee from 40% to 33%, according to the judge.
"Plaintiffs explain that after investigating the case, they recognized that recovery of a judgment from Dollar Tree would pose 'significant risks' and that the value of S.W.'s claims is subject to significant dispute," the judge said. "Plaintiffs also explain that the proposed settlement reflects these uncertainties as well as potential recovery from other 'potentially liable entities[.]'"
The minor began eating the applesauce when she was about 15 months old in July 2023, according to the filing. That September, she had a routine childhood lead test that showed her blood tested positive for high lead levels.
In October 2023, her family learned about the U.S. Food and Drug Administration alert about extremely high levels of lead in the apple purée pouches. They then filed suit against WanaBana and Dollar Tree, bringing defect and failure to warn claims, according to the filing.
Any effects from the lead still have yet to be seen, which makes damages difficult to estimate now, according to Judge Fulgueira Elfenbein.
The judge said that, at present, S.W.'s blood levels are back to normal, she is doing well cognitively and her parents don't expect any future medical care other than continued monitoring.
Through the annuity structure of the settlement, S.W. will not receive payment until she is 18 years old, when she will get four equal, tax-free payments, the judge said.
"Further, there is no evidence of collusion between the parties," she said. "For these reasons, the settlement should be approved."
Headquartered in Miami with an office in Puerto Rico, WanaBana makes fruit purée snack pouches, pulp and tea from tropical fruits grown in Ecuador, according to its website and bankruptcy filings.
In October 2023, WanaBana issued a notice of recall for its cinnamon applesauce pouches after officials with the FDA and the North Carolina Department of Health and Human Services said the pouches were linked to four cases of suspected lead poisoning in children. The FDA later said it had confirmed 90 cases of illness in 32 states linked to the recalled WanaBana products
According to the FDA, children are especially susceptible to lead toxicity that can cause headaches, abdominal pain, vomiting and anemia, as well as lethargy, weight loss and difficulty concentrating in cases of long-term exposure.
The FDA said tested cinnamon used by the Ecuador-based manufacturer of WanaBana's products, Austrofoods, contained high levels of lead chromate, a toxic compound that has historically been illegally added to spices, like turmeric, to boost their weight or color.
Ecuadorian officials have identified defunct spice processing company Carlos Aguilera as the likely source of contamination, the FDA said, adding that it believes lead chromate was intentionally added to the cinnamon and was "likely an act of economically motivated adulteration."
Representatives for the parties didn't immediately respond to requests for comment.
The Windhams are represented by John Scarola of Searcy Denney Scarola Barnhart & Shipley PA.
Dollar Tree is represented by Rachel L. Forman, Lori B. Leskin, E. Dean Harris Porter and Eric Steven Padilla of Arnold & Porter Kaye Scholer LLP.
The case is S.W. et al. v. Wanabana LLC et al., case number 1:24-cv-20526 in the U.S. District Court for the Southern District of Florida.
Sep 26
Deal Summary
