United States District Court, N.D. California
AMENDED ORDER GRANTING FINAL APPROVAL OF CLASS ACTION SETTLEMENT FOR INJUNCTIVE RELIEF AND GRANTING AWARD OF ATTORNEY FEES, REIMBURSEMENT OF EXPENSES, AND APPROVAL OF SERVICE PAYMENTS
ECF Nos. 69, 70
JON S. TIGAR, District Judge.
Two motions are pending in this class action settlement for injunctive relief, in which the parties have stipulated to an injunction whereby Defendants will alter the allegedly-false packaging on certain smoothie kit products. First, Class Representatives Aleta Lilly and David Cox ("Plaintiffs") move for an order granting final approval of the parties' settlement agreement. ECF No. 69. Second, Plaintiffs move for an award of attorneys' fees, litigation costs, and service enhancement awards to Ms. Lilly and Mr. Cox. ECF No. 70. The Court grants the motion for final approval and grants the motion for attorneys' fees, litigations costs, and service enhancement awards for the reasons discussed below.
A. Factual History
This is a class action lawsuit against Defendants Jamba Juice Company and Inventure Foods, Inc. ("Defendants"), brought on behalf of consumers who purchased one of five flavors of Jamba Juice smoothie kit products. Class Action Complaint ("Compl.") ECF No. 1-1 ¶¶ 2-3. The Smoothie Kits were sold in a three-sided pouch with the words "All Natural" appearing prominently on the front of the package. Compl. ¶ 3. Plaintiffs allege that the Smoothie Kits contain ascorbic acid, xanthan gum, steviol glycosides, modified corn starch, and gelatin (the "challenged ingredients"). Compl. ¶ 24-29. Generally, Plaintiffs allege that, in making their purchases, they relied on the representation that the smoothie kits are "all natural, " and they believe that because the Smoothie Kits contain the challenged ingredients, the kits are not "all natural." Compl. ¶¶ 12-13. In their complaint, Plaintiffs seek injunctive relief. Compl. ¶¶ 50, 56, 63, 70.
By order dated March 18, 2015, the Court (1) granted preliminary approval of the parties' proposed settlement for injunctive relief and conditionally certified the putative class for the purposes of determining the issue of liability under 23(c)(4); and (2) concluded that class notice was not necessary for settlement approval as the settlement was for injunctive relief only and class members would retain their claims for individual damages. ECF No. 65 at 13.
B. Settlement Agreement
The settlement agreement defines the settlement class as follows:
All persons in the United States who bought, for personal use only, one of the following Jamba Juice Smoothie Kit products from the period of January 1, 2010 to the present: Mango-a-go-go, Strawberries Wild, Caribbean Passion, Orange Dream Machine, and Razzmatazz. Excluded from the Settlement Class are (a) the officers, directors and employees of any entity which is or has been a Defendant, members of the immediate families of the foregoing, and their legal representatives, heirs, successors and assigns; (b) the officers, directors and employees of any parent, subsidiary or affiliate of either of the Defendant or any business entity in which any of the Defendants owns a controlling interest, together with those individuals' immediate family members; (c) counsel for Defendants and its immediate family members; (d) Governmental entities; and (d) the Court, the Court's immediate family, and Court staff. ("Settlement Class").
Settlement Agreement, ¶ 1.A; ECF No. 65.
Pursuant to the Agreement, Defendants must comply with the following the terms of the stipulated injunction:
1. Defendants shall effect relabeling of all Challenged Products so that they do not describe the products as "all natural" on packaging or other advertising.
2. Defendants shall effect relabeling of all Challenged Products on its website pages so that they do not describe the Challenged Products as "all natural."
3. Defendants shall effectuate the changes set forth above by March 31, 2015 and provide Plaintiffs with a declaration setting forth compliance with the above obligations and shall maintain records necessary to demonstrate compliance with the same.
4. Defendants are not required to remove or recall any of the Challenged Products in market, inventory, or elsewhere; nor are Defendants required to discontinue the use of, or destroy, any packaging inventory that was in existence prior to final judicial approval of this agreement. Instead, Defendants shall not print any Challenged Product labels after March 31, 2015 that do not comply with Paragraph 4(A) above. However, Defendants may, now or after March 31, 2015, exhaust all existing packaging inventory and thereafter sell and distribute Challenged products bearing labeling printed on or before the final approval date of this agreement, without violating the terms of this agreement.
5. Plaintiffs and all members of the Settlement Class shall be forever enjoined from filing any action seeking injunctive relief pursuant to Rule 23(b)(2) for as long as the Stipulated Injunction remains in effect, against Defendants prohibiting them from labeling the Challenged Products containing the Challenged Ingredients as "all natural".
Settlement Agreement ¶ 4.F; ECF No. 60 at 4.
Plaintiffs seek an award of $410, 673.13 in attorney's fees and $14, 326.87 in litigation costs for the out-of-pocket expenses class counsel has incurred. ECF No. 70 at 1. Lastly, Plaintiffs request incentive awards of $5, 000 for each of the named Plaintiffs. Id.
This Court has subject matter jurisdiction over this action pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d), because Plaintiffs are of diverse citizenship from the Defendants; there are more than 100 Class members nationwide; and the aggregate amount in controversy exceeds $5, 000, 000. Compl. ¶ 9.
II. FINAL APPROVAL OF THE SETTLEMENT
A. Legal Standard
"The claims, issues, or defenses of a certified class may be settled... only with the court's approval." Fed.R.Civ.P. 23(e). "Adequate notice is critical to court approval of a class settlement under Rule 23(e)." Hanlon v. Chrysler Corp., 150 F.3d 1011, 1025 (9th Cir. 1998). In addition, Rule 23(e) "requires the district court to determine whether a proposed settlement is fundamentally fair, ...