A 3rd District US Court of Appeals ruled that a US$24 million class-action lawsuit settlement over melamine-contaminated petfood was a "fair, reasonable and adequate" deal, but sent the case back to a New Jersey district court judge for more information.

The appeals court sent the case back to New Jersey US District Court Judge Noel Hillman, who originally approved the deal in November 2008, for more information supporting the purchase-claim limit of US$250,000. According to the appellate court decision, 20,550 of the 24,344 claims submitted in the suit were deemed payable for a total estimated amount of US26.4 million, which exceeds the settlement fund by more than US$2 million. Appeals filed by two separate parties previously blocked disbursements from this settlement fund. Lisa Rodriguez, liaison counsel for the multiple class-action suits covered by the settlement, described the appeals court’s concern as minor and said that claimants may seek reimbursement in a number of categories, including purchases, but that the decision generally favors the claimants.

The petfood scandal originated with Chinese suppliers that tried to boost the protein contents of their products by spiking wheat gluten and rice protein with nitrogen-rich melamine, a substance not approved for human consumption. The tainted product was imported by ChemNutra and sold to Menu Foods, a private label petfood manufacturer. It also affected several other petfood makers, including Hill’s Pet Nutrition, Mars Inc., Nestle Purina PetCare Co., The Iams Co., and Procter & Gamble. More information on the settlement and associated legal documents can be found here.