What may, in the long-term, be a prudent business decision by Poland Spring leaves us with a bad taste in our mouths.

The water bottler has proposed a settlement in an Illinois class action suit this week for a little more than $12 million. The suit alleges that Poland Spring water does not come from a spring, is in danger of contamination and is fraudulently marketed. With the deal, Poland Spring does not admit that any of the allegations are true. There are an additional 10 class action suits still pending against the company, all making similar claims. The impact on the remaining claims is uncertain.

The Food and Drug Administration and the state both regulate the bottled water industry and have found no fault in Poland Spring’s practices. Purity tests and tours of the property and water sources satisfy us that the product is safe and as advertised. According to state regulators, Poland Spring goes beyond what is required by the law.

It’s easy to understand how mounting legal fees and bad publicity would push a business to settle a lawsuit, even if its operations are legitimate and without fault. Even a victory in front of a judge can lead to defeat in the court of public opinion.

But the settlement, which must still be approved by a judge on Oct. 20, is not without costs. Poland Spring’s image is surely damaged, and the deal calls into question the company’s integrity. They weren’t willing to fight for the truth and their own brand image. Despite rhetoric to the contrary, it’s fair to say consumers will think the worst: The water isn’t what the company claims.

On the other side, the terms of the arrangement support the stereotype of greedy lawyers taking advantage of a broken tort system. Lawyers will receive the lion’s share of the proceeds from the suit, $1.35 million. Kenneth Ramsey, a dissatisfied customer who represents the class in the suit, will receive $12,000, while $2.75 million will go to charity. Another $8 million over five years will be offered to consumers in the form of discounts.

What great injustice is righted in this case? Poland Spring will continue to bottle and sell water in the same way. “Wronged” consumers, which technically includes everybody who has bought the brand, receive little redress – only coupons and price discounts. A major local employer gets a black eye and a tarnished national reputation.

Meanwhile, lawyers, for a couple of months’ work, will make more than a million dollars plus expenses.

As the company says, “The current state of the legal system makes it far more costly to fight suits such as these than to settle. The sad truth is that being right does not shield a company from those costs.”

The nation’s class action system is flawed. But we still would like to believe that the truth is the ultimate defense. In this case we’ll never know. That’s difficult to swallow.
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