ROBERT A. MASON, on behalf of himself, all others similarly situated and the general public, Plaintiff,
HEEL, INC., a New Mexico Corporation, Defendant.
ORDER PRELIMINARILY APPROVING CLASS ACTION SETTLEMENT, CERTIFYING THE CLASS, APPOINTING CLASS REPRESENTATIVE AND CLASS COUNSEL, APPROVING NOTICE PLAN, AND SETTING FINAL APPROVAL HEARING
(ECF NO. 26)
GONZALO P. CURIEL, District Judge.
Named plaintiff Robert A. Mason and defendant Heel, Inc. have, after arms-length settlement discussions, entered into a Settlement Agreement ("Agreement"), dated July 30, 2013, which, if finally approved, would resolve this putative class action case ("Litigation").
The capitalized terms used in this Preliminary Approval Order shall have the meanings and/or definitions given to them in the Agreement, or if not defined therein, the meanings and/or definitions given to them in this Preliminary Approval Order.
Before and during the pendency of the Litigation, Class Counsel conducted an extensive examination and evaluation of the relevant facts and law to assess the merits of the named Plaintiff's and Class's claims to determine how best to serve the interests of Plaintiff and the Class. During the course of this extensive examination, Class Counsel reviewed extensive documentation produced by Defendant, including marketing data, label and package mechanicals, sales figures, unit sales, promotional materials, package materials, clinical studies regarding the Products, a list of doctors recommending the Products, distributors and their invoices for the Products during the class period, and other detailed financial information produced by Defendant. Class Counsel has conducted a thorough review of the federal Food, Drug and Cosmetic Act ("FDCA"), its numerous changes over the years, and its implementing regulations with respect to homeopathic drugs, which California law adopts as its own. See Cal. Health & Safety Code §§ 110105, 110110, 110111, 110115. Class Counsel has carefully considered the merits of Plaintiff's claims, and the defenses raised by Defendant.
The Parties also fully briefed Defendant's Motion to Dismiss Plaintiff's Complaint, brought on grounds that included, among other things, Defendant's contentions that Plaintiff's claims lacked plausibility and particularity under Federal Rules of Civil Procedure 8 and 9(b), were what Defendant termed "lack of substantiation" claims, and were preempted by the FDCA. ( See ECF Nos. 6, 10, 11, 13, 14, 15, 23.)
The Agreement was reached only after this extensive investigation and discovery was conducted during the Litigation, and was the result of protracted negotiations conducted by the Parties with the assistance of former U.S. Magistrate Judge, Hon. Leo Papas (Ret.). Over the course of several months, the Parties engaged in numerous joint and individual mediation sessions with Judge Papas in order to reach the terms of the Agreement. Based on the briefing on Defendant's Motion to Dismiss, which was extensive, the Parties also fully understood the nature, strength, and weaknesses of each other's claims and defenses. ( See id. )
Plaintiff and Class Counsel maintain that the Litigation and the claims asserted herein are meritorious and that Plaintiff and the Class would have prevailed at trial. Notwithstanding, Plaintiff and Class Counsel have agreed to settle the Litigation pursuant to the provisions of the Agreement, after considering, among other things: (i) the substantial benefits to Plaintiff and the Class under the terms of the Agreement; (ii) the inherent uncertainty of whether Plaintiff and the Class would prevail at trial; (iii) the inherent uncertainty relating to Defendant's ability to prevail on its defenses and the anticipated expense of additional motion practice in connection therewith; (iv) the issues relating to proving damages on an individual Class Member basis; (v) the attendant risks of litigation, especially in complex actions such as this, as well as the difficulties and delays inherent in such litigation; and (vi) the desirability of consummating the Agreement promptly in order to provide effective relief to Plaintiff and the Class.
Plaintiff and Class Counsel agree the Agreement is fair, reasonable, and adequate because it provides substantial benefits to the Class, is in the best interests of the Class, and fairly resolves the claims alleged in this Litigation.
Defendant expressly denies any wrongdoing alleged in Plaintiff's Complaint, and does not admit or concede any actual or potential fault, wrongdoing, or liability in connection with any facts or claims which have been or could have been alleged against it in the Litigation. Defendant nonetheless considers it desirable for the Litigation to be settled and dismissed, because, once finally approved, the Agreement will: (i) avoid further expense and disruption of the management and operation of Defendant's business due to the pendency and defense of the Litigation; (ii) finally put Plaintiff's and the Class' claims and the underlying matters to rest; and (iii) avoid the substantial expense, burdens, and uncertainties associated with a potential finding of liability and damages for Plaintiff and the Class on the claims alleged in Plaintiff's Complaint.
The Court has read and considered the Agreement and all exhibits attached thereto, including the proposed notices and claim form, and finds there is sufficient basis for: (1) granting preliminary approval of the Agreement; (2) certifying a class for settlement purposes; (3) appointing Plaintiff Robert A. Mason as Class Representative and his counsel as Class Counsel; (4) directing that Notice be disseminated to the Class; and (5) setting a hearing at which the Court will consider whether to grant final approval of the Agreement.
Based on the foregoing, the Court hereby GRANTS the Parties' Joint Motion for Preliminary Approval and makes the following findings and orders:
1. Pursuant to Federal Rule of Civil Procedure 23, the Court hereby certifies, for purposes of settlement, this Litigation as a class action on behalf of the following Class:
All U.S. consumers who purchased the Products listed in Exhibit D to the Agreement, for household or personal use, during the Class Period (as defined by Paragraph 1.7 of the Agreement) are included. Excluded from the Class are: Heel; persons who during or after the Class Period were officers or directors of Heel, or any corporation, trust or other entity in which Heel has a controlling interest; Heel employees; the members of the immediate families of Heel employees or their successors, heirs, assigns and legal representatives; and any judicial officer hearing this Litigation, as well as their immediate family members and employees.
2. The Court finds that the Class meets the requirements of Rule 23(a), (b)(2), and (b)(3) of the federal Rules of Civil Procedure. Joinder of all Class Members in a single proceeding would be impracticable, if not impossible, because of their numbers and dispersion. Common issues exist among Class Members and predominate over questions affecting individual Class Members only. In particular, each Class Member's claim depends on whether the representations made by Defendant on the packaging, labeling, and marketing of the Products, which were uniform throughout the United States, were misleading to a reasonable consumer. The Plaintiff's claims are typical of, indeed identical to, those of the Class, as Plaintiff was exposed to Defendant's claims and purchased the Products in reliance on those claims. The Plaintiff and his counsel will fairly and adequately protect the interests of the Class, as Plaintiff has no interests ...