United States District Court, S.D. California
CHARLICE ARNOLD, on behalf of herself, all similarly situated and the general public, Plaintiffs,
FITFLOP USA, LLC, Defendant.
ORDER GRANTING FINAL APPROVAL FOR CLASS ACTION SETTLEMENT [DOC. 107]
THOMAS J. WHELAN, District Judge.
Pending before the Court is the parties' joint motion for final approval of a proposed class action settlement. There has been one objection to the settlement filed by Michael Narkin.
Having considered the papers submitted in support of the motion, Mr. Narkin's objection, and the arguments at the hearing held on Monday, April 28, 2014, the Court GRANTS the motion for the following reasons.
Defendant Fitflop USA, LLC ("Fitflop") manufactures, markets, and sells a line of women's and men's sandals, known as FitFlop Footwear. ( Second Amended Complaint ("SAC") ¶¶ 3, 11 [Doc. 97].) According to the Second Amended Complaint, since 2007, Defendant has claimed in its advertising and on product packaging labels that FitFlop Footwear provides a variety of health benefits including improved posture, increased muscle activation and toning, and reduced joint strain. ( Id. ¶¶ 3, 17-19, 21-31.) Defendant claims that these health benefits are the result of FitFlop Footwear's patent pending "Microwobbleboard Technology" midsole. ( Id. ) Because of these claimed benefits, Fitflop Footwear is sold at a premium price. ( Id. ).
Plaintiffs assert that Defendant's health benefit claims are deceptive, and that FitFlop Footwear is not proven to provide any of the claimed benefits. ( SAC ¶¶ 3, 32-46.) Plaintiffs contend that consumers have purchased FitFlop Footwear at a significant price premium over other comparable traditional footwear products, and that they would not have purchased FitFlop Footwear if they knew the claimed health benefits were untrue. ( Id. at ¶¶ 9-10.)
On May 4, 2011, Ariana Rosales filed this action against Defendant FitFlop Footwear alleging violations of California Business & Professions Code § 17200 et seq. ("UCL"), violations of California Civil Code § 1750 et seq., the Consumer Legal Remedy Act ("CLRA"), and breach of express warranty. The complaint asserted that Defendant's deceptive claims affect a broad class of individuals who have purchased FitFlop Footwear, and she brought this putative class action on behalf of herself and other class members. ( Compl. [Doc. 1], ¶¶ 7-8.)
On July 15, 2011, a first amended complaint was filed, adding Plaintiff Charlice Arnold as a named plaintiff and damage claims related to Defendant's alleged CLRA violations. ( FAC ¶ 74.) Plaintiff Rosales, thereafter, withdrew as a named plaintiff. On June 26, 2013, Plaintiff Arnold filed the operative second amended complaint, which adds certain evidentiary allegations and clarifies that Arnold is not seeking recovery for personal injury on behalf of herself or the proposed class.
On or about August 16, 2013, the parties reached a tentative settlement agreement. The agreement was finalized on December 12, 2013 and the parties then filed for preliminary approval. By order dated December 19, 2013, the Court preliminarily approved the proposed settlement and set a fairness hearing for April 28, 2014. ( See Prelim. Approval Order [Doc. 110], ¶¶ 5, 7.) On April 28, 2014, the final approval hearing was held.
II. LEGAL STANDARD
A class action lawsuit cannot be compromised without court approval. See Fed.R.Civ.P. 23(e). The primary purpose of Rule 23(e) is to protect class members, including the named plaintiffs, whose rights may not have been given due regard by the negotiating parties. Officers for Justice v. Civil Service Comm'n , 688 F.2d 615, 624 (9th Cir. 1982). Consequently, courts must conduct a fairness hearing to determine whether to approve the class action settlement. See, e.g., In re Mego Financial Corp. Sec. Litig. , 213 F.3d 454, 458 (9th Cir. 2000); Hanlon v. Chrysler Corp. , 150 F.3d 1011, 1026 (9th Cir. 1998).
"Although Rule 23(e) is silent respecting the standard by which a proposed settlement is to be evaluated, the universally applied standard is whether the settlement is fundamentally fair, adequate and reasonable." Officers for Justice , 688 F.2d at 625; see also Torrisi v. Tucson Elec. Power Co. , 8 F.3d 1370, 1375 (9th Cir. 1993). The Court must balance several factors, which may include:
(1) the strength of the plaintiffs' case; (2) the risk, expense, complexity and likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the settlement amount; (5) the extent to which discovery has been completed; (6) whether one of the parties is a governmental entity; (7) the experience and views of counsel and (8) the class members' reaction to the proposed settlement.
Torrisi , 8 F.3d at 1375; Linney v. Cellular Alaska P'ship , 151 F.3d 1234, 1242 (9th Cir. 1998). Further, the court must examine each factor to survive appellate review. See Protective Comm. for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson , 390 U.S. 414, 434 (1968); Hanlon , 150 F.3d at 1026. Finally, "the settlement may not be the product of collusion among the negotiating parties." Mego , 213 F.3d at 458 (citing Class Plaintiffs v. City of Seattle , 955 F.2d 1268, 1290 (9th Cir. 1992)).
A. Class Certification
As a preliminary matter, the parties have stipulated to settlement class certification. According to the proposed settlement, "Class" or "Class Member" means "all persons or entities that, during the Class Period, purchased in the United States any Eligible Footwear." ( Stipulation of Settlement [Doc. 106], ¶ 10.) Having read and considered the papers submitted, the Court finds that the four Rule 23(a) requirements - numerosity, commonality, typicality and adequacy of representation - have been met for settlement class certification.
First, with respect to the numerosity requirement, based on the amount of FitFlop Footwear sold, the Court finds that the numerosity requirement is easily met. See In re Kirschner Medical Corp. Sec. Litig. , 139 F.R.D. 60, 62 (D. Md. 1991) (noting that a class of more than 25 to 30 members "raises the presumption that joinder would be impracticable.").
Second, the questions of law and fact in this case are common to the entire class. The Class Members' claims stem from the same salient issue: whether the FitFlop Footwear provides the toning and strengthening health benefits promised in the advertising and labeling.
Third, the named Plaintiff's claims or defenses are typical of the Class's claims or defenses. Specifically, Plaintiff Arnold claims that she purchased Defendant's products to provide the strengthening and toning benefits. Plaintiff Arnold further claims that she purchased the product based on Defendant's misrepresentations. Thus, Plaintiff's claims are typical of the claims of other purchasers of FitFlop Footwear.
Finally, Plaintiff Arnold has fairly and adequately protected the interests of the Class by negotiating a settlement sufficient to compensate the members for their injury. Additionally, Plaintiff and Class Counsel do not have any interests antagonistic to the Class. Accordingly, the Court finds the proposed Class meets Rule 23(a)'s requirements, and hereby certify the Class for settlement purposes.
In addition to certifying a class, Rule 23(b)(3) requires the court to find that the common questions of law or fact predominate over any questions affecting only individual members, and a class action is the superior method for the fair and efficient ...