Dannon settles lawsuit, to pay yogurt buyers $35M

WHITE PLAINS, N.Y. -- Dannon said Friday it will reimburse consumers for up to $100 of Activia and DanActive yogurt purchases and change its marketing and labeling to settle a class-action lawsuit.

The lawsuit, filed in 2008, alleges Dannon overstated the yogurt's health benefits. The company said the products can strengthen the body's defenses or regulate digestion because of bacteria they contain.

White Plains, N.Y.-based Dannon, a unit of France's Danone, denies any wrongdoing and said it settled the suit to avoid any further litigation and expense.

The settlement still needs to be approved by the U.S. District Court for the Northern District of Ohio.

As part of the settlement Dannon will set up a fund of up to $35 million to reimburse qualified consumers for purchases. Customers who purchased Activia or DanActive yogurt since they were introduced in 2006 and 2007, respectively, will be able to file for reimbursement.

Dannon will also change labeling and marketing to "increase the visibility of the scientific names of the unique strains of probiotics that are in each of these products," Dannon said in a statement.

Once the settlement is approved, consumers will be able to find out more about the process for filing for reimbursement and other information at www.DannonSettlement.com. The site is not active yet.