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After egg flap, a charitable solution

Rather than playing chicken with local officials, one company chose to end a legal dispute over carton labeling by putting at least some of its eggs in two baskets.

In this case, those baskets belong to two charities that are benefiting from a three-year dispute between Hidden Villa Ranch, a Fullerton, California-based egg supplier, and the San Diego City Attorney Jan Goldsmith.

As part of a settlement announced by Goldsmith this week, Hidden Villa delivered more than 200,000 eggs -- worth $50,000 -- to two San Diego food banks.

Goldsmith crowed about the donation in a news release, saying his office "looks for opportunities where defendants in consumer-protection lawsuits can give back to the community."

While not outright stating the charitable donation was his idea, the statement from Goldsmith's office does not offer any credit to Hidden Villa for what Goldman called "a creative resolution, and a win-win for San Diego."

Hidden Villa also agreed to pay more than $53,000 in penalties, the city attorney said in his two-page statement. "Our food banks get $50,000 in eggs to help the needy. Our office enforces the law, and Hidden Villa Ranch is held accountable."

Hidden Villa, meantime, came out with its own statement, saying Goldsmith's release was "so misleading" it felt compelled to set the record straight.

Its labeling was approved by the U.S. Department of Agriculture, and fully complied with both state and federal regulations, Hidden Villa said. "Though confident the labeling was proper, to accommodate the city's concerns, Hidden Villa Ranch immediately and voluntarily changed its labeling," the company stated. The process took about three weeks, said the company's CFO, Don Lawson.

Asked why his company would agree to pay penalties if it believed its packaging to be legally in the clear, Lawson said the wording on the egg cartoons "could be interpreted in other ways, and it wasn't worth the hassle" of devoting staff time and attorney fees to the respond to the allegations.

"If I'm going to have to pay a fine, I'd rather it benefit somebody than go to city's coffers," Lawson told CBS MoneyWatch of Hidden Villa's proposal of a charitable donation of eggs by his company to settle claims dealing with the labeling of some of its eggs sold at Costco stores in 2012.

Besides, "we have a foundation that we use specifically for people in need, that's why it was a natural tendency for us to think, 'How we can solve this to serve multiple purposes?'," Lawson said.

Goldsmith declined to comment, but a spokesman for the city attorney confirmed in an email that it was indeed Hidden Villa's idea to make part of the settlement a donation to food banks.