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Leyton v. Ghirardelli Chocolate Co.

United States District Court, N.D. California, San Francisco Division

October 2, 2014

SCOTT MILLER and STEVE LEYTON, individually and on behalf of themselves, the general public and those similarly situated, Plaintiffs,
v.
GHIRARDELLI CHOCOLATE COMPANY; Defendant.

ORDER (1) CONDITIONALLY CERTIFYING SETTLEMENT CLASS; (2) PROVISIONALLY APPOINTING CLASS COUNSEL AND CLASS REPRESENTATIVES; (3) PRELIMINARILY APPROVING SETTLEMENT; (4) APPROVING NOTICE TO CLASS; (5) SETTING HEARING FOR FINAL APPROVAL AND PLAINTIFFS' MOTION FOR FEES, COSTS, AND SERVICE AWARD; AND (6) GRANTING PLAINTIFFS' LEAVE TO FILE THEIR PROPOSED THIRD AMENDED COMPLAINT [RE: ECF No. 129]

LAUREL BEELER, Magistrate Judge.

INTRODUCTION

In this putative class action, Plaintiffs Scott Miller and Steve Leyton claim that Defendant Ghirardelli Chocolate Company violated consumer protection laws and labeling regulations by its labeling of its products. The parties move for preliminary approval of a proposed class action settlement. See Motion, ECF No. 129; Statement of Non-Opposition, ECF No. 132.[1] The court grants the motion.

STATEMENT

I. THE LAWSUIT TO DATE

Mr. Miller was the original named Plaintiff. See Complaint, ECF No. 1. Mr. Leyton intervened with the court's permission in December 2013. See 12/20/13 Order, ECF No. 84. The operative complaint alleges that Ghirardelli violated consumer protection laws by labeling its "Ghirardelli Chocolate Premium Baking Chips - Classic White" ("White Chips") as containing chocolate when they did not. See Second Amended Complaint, ECF No. 86. Mr. Leyton intervened in that lawsuit and also sought to add claims that Ghirardelli labeled the White Chips and certain other products as "All Natural." Although the court allowed Mr. Leyton to intervene, it did not allow him to add the "All Natural" claims on the ground that it was too late in the litigation. See Order, ECF No. 84 at 16-17.

In March 2014, Mr. Leyton gave notice of his intent to file his "All Natural" allegations in a separate lawsuit. At the May 15, 2014 hearing on the motion, the parties asked the court to defer issuing its formal order so that they could return to mediation. Thereafter, they notified the court that they had settled their case.

II. THE PROPOSED SETTLEMENT

In summary form, the settlement agreement is as follows. Ghirardelli will pay $5.25 million into a common fund. The fund will be used to pay all costs of notice and administration, any fees and costs awarded to Plaintiffs' counsel, incentive awards to Plaintiffs, and claims by class members. Each class member who makes a claim will obtain $1.50 per purchase of the White Chips and $0.75 per purchase of any of the other products labeled as "All Natural." There will be no cap on the total amount paid to a claimant for claimed purchases that are corroborated by a Proof of Purchase.[2] For claims that are not corroborated by a Proof of Purchase, a maximum of $24.00 will be paid to any Household.[3] Amounts may be reduced pro-rata if the total value of claims exceeds the amount of the common fund after payment of notice and administration costs, fees, costs, and incentive awards. If funds remain in the common fund after paying all claims, incentive awards, and fees and costs, the money will be donated cy pres, in equal amounts, to four charitable organizations. Finally, as part of the settlement, Ghirardelli has agreed to continue with certain label changes it implemented during the litigation to the products at issue. See Settlement Agreement, Declaration of Adam Gutride ("Gutride Decl."), Ex. 1.

The settlement agreement will be administered by an independent claim administrator called The Garden City Group, Inc., which will cause the notices to be published, emailed and mailed (as described below), establish a website, distribute funds to class members, and otherwise administer the settlement. Id. § IV.

On August 20, 2014, Plaintiffs filed an unopposed motion for an order (1) conditionally certifying the proposed settlement class and appointing Gutride Safier LLP as class counsel and Plaintiffs as class representatives, (2) preliminarily approving the proposed class settlement, (3) directing the dissemination of notice in the form and manner set forth in the settlement agreement, (4) setting a schedule for the fairness hearing and other remaining procedures, and (5) granting Plaintiffs leave to file their proposed third amended complaint. The court held a hearing on October 2, 2014 and now issues this order granting the motion.

ANALYSIS

I. JURISDICTION

This court has jurisdiction under 28 U.S.C. § 1332(d)(2).

II. CONDITIONAL CERTIFICATION OF CLASS

For settlement purposes only, the parties propose conditional certification of a class that consists of all persons (other than Excluded Persons) who, between August 17, 2008, and October 2, 2014, purchased, in the United States, except for purposes of resale, the Ghirardelli "Classic White" chips or any of the other products labeled as "all natural, " a complete list of which is provided in the Long Form Notice attached as Exhibit B1 to the settlement agreement. Excluded Persons means (1) the presiding judge in this case (Laurel Beeler) and any member of her immediate family; (2) the Honorable Edward Infante and any member of his immediate family; (3) any government entity; (4) any of the Released Parties; and (5) any persons who timely opt out of the Settlement Class.

The court reviews the propriety of class certification under Federal Rule of Civil Procedure 23(a) and (b). In a settlement context, the court must pay "undiluted, even heightened, attention" to class certification requirements because the court will not have the opportunity to adjust the class based on information revealed at trial. See Staton v. Boeing, 327 F.3d 938, 952-53 (9th Cir. 2003) (quoting Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997)); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998) (same). The court finds that the proposed settlement class here meets the requirements of Federal Rule of Civil Procedure 23(a) and (b).

A. Rule 23(a)

Class certification requires the following: (1) the class must be so numerous that joinder of all members individually is "impracticable;" (2) there are questions of law or fact common to the class; (3) the claims or defenses of the class representatives must be typical of the claims or defenses of the class; and (4) the person representing the class must be able to fairly and adequately protect the interests of all class members. See Fed.R.Civ.P. 23(a); Staton, 327 F.3d at 953.

Here, the factors support class certification for purposes of settlement. First, Plaintiffs have adduced from Ghirardelli's sales records that the class members number in the millions or more, which makes joinder impracticable. See Jordan v. County of L.A., 669 F.2d 1311, 1319 (9th Cir.), vacated on other grounds, County of L.A. v. Jordan, 459 U.S. 810 (1982). Second, there exist common issues, including the following: (1) whether Ghirardelli's marketing and advertising materials were likely to deceive reasonable consumers; (2) whether Ghirardelli violated California Health & Safety Code sections 110100(a), 110380, and 11050 and (3) whether class members are entitled to injunctive and other equitable relief and, if so, what is the nature of such relief. Third, Plaintiffs' claims regarding the allegedly deceptive packaging are typical of other class members. See Hanlon, 150 F.3d at 1019-20 (claims are typical if they are reasonably coextensive with that of absent class members; they need not be substantially identical). Fourth, the named Plaintiffs are able to fairly and adequately protect the interests of all class members. The factors relevant to a determination of adequacy are as follows: (1) the absence of potential conflict between the named plaintiff and the class members; and (2) counsel chosen by the representative parties who are qualified, experienced and able to vigorously conduct the proposed litigation. Id. at 1020. The court is satisfied that ...


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