Philadelphia – Less than a month after settling a false-advertising lawsuit, the makers of two widely used sugar substitutes, Equal and Splenda, have resumed their fighting ways.
Equal asked the trial judge on Thursday to either enforce the settlement or enter the jury verdict after Splenda lawyers allegedly asked for more time to comply with its terms.
Splenda, in turn, said Merisant Co., the Chicago-based company that makes Equal, first breached the deal’s confidentiality clause by publicizing the settlement in ads.
Terms of the May 11 settlement remain sealed. Merisant, however, reported in a recent regulatory filing that it expects a one-time payment this quarter that would boost its cash on hand by about $22 million to $31 million.
Merisant had sought more than $200 million in damages during the five-week federal trial.
The settlement talks between Merisant and McNeil Nutritionals, which markets Splenda, started only after the jury asked for a calculator during deliberations. The lawyers then asked the judge to hold off when the jury said it had a verdict.
Jurors later said they had decided to award Merisant “substantial” damages, but their verdict was never entered.
The dispute centered on Splenda’s advertising slogan – “Made from sugar so it tastes like sugar” – which Merisant said confused people into thinking the product was natural.
The settlement called for Splenda to comply within 30 days, according to a motion filed Thursday by Merisant.
That June 10 deadline has not yet passed, but Splenda lawyers told Merisant that it considered the new Equal ads a breach of the agreement, according to court papers McNeil filed Thursday.
Merisant denied the accusation, saying that simply mentioning the widely publicized deal did not violate the agreement.
According to the latest court filings, McNeil wants three extra months to meet its obligations, which would delay any payment until after a scheduled trial date in a similar false-advertising suit filed by a group of U.S. sugar manufacturers.
