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Morales v. Conopco, Inc.

United States District Court, E.D. California

July 11, 2016

ALBA MORALES; LANIE COHEN; LINDA CLAYMAN; and KENNETH DREW, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
CONOPCO, INC., d/b/a UNILEVER, Defendant.

          MEMORANDUM AND ORDER RE: MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

          WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE

         Plaintiffs Alba Morales, Lanie Cohen, Linda Clayman, and Kenneth Drew brought this putative class action against defendant Conopco, Inc., d/b/a Unilever, asserting claims arising out of defendant's alleged labeling of certain hair care products as "TRESemmé Naturals" despite them containing synthetic ingredients. Presently before the court is plaintiffs' motion for preliminary approval of the class action settlement. (Docket No. 57.)

         I. Factual and Procedural Background

         Defendant is a multinational consumer goods company whose products include food, beverages, cleaning agents, and personal care products, including the TRESemmé brand.

         Plaintiffs contend that defendant violated California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., California's Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., and various other state consumer protection laws. (See Second Amended Complaint ("SAC") (Docket No. 30).) The parties litigated the case for nearly two years before reaching a settlement agreement on February 5, 2016 before mediator Jonathan Marks. (Stipulation of Settlement ("Settlement Agreement") ¶¶ 3-10 (Docket No. 57-2).)

         Plaintiffs brought this lawsuit on behalf of a putative class of consumers in the United States who have purchased TRESemmé Naturals products. (Id. at 2-3.) Plaintiffs now seek preliminary approval of the parties' stipulated class-wide settlement, pursuant to Federal Rule of Civil Procedure 23(e). (Id. at 4.)

         II. Discussion

         Rule 23(e) provides that "[t]he claims, issues, or defenses of a certified class may be settled . . . only with the court's approval." Fed.R.Civ.P. 23(e). "Approval under 23(e) involves a two-step process in which the Court first determines whether a proposed class action settlement deserves preliminary approval and then, after notice is given to class members, whether final approval is warranted." Nat'l Rural Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 525 (C.D. Cal. 2004) (citing Manual for Complex Litig., Third, § 30.41 (1995)).

         This Order is the first step in that process and analyzes only whether the proposed class action settlement deserves preliminary approval. See Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 473 (E.D. Cal. 2010). Preliminary approval authorizes the parties to give notice to putative class members of the settlement agreement and lays the groundwork for a future fairness hearing, at which the court will hear objections to (1) the treatment of this litigation as a class action and (2) the terms of the settlement. See id.; Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 1989) (stating that a district court's obligation when considering dismissal or compromise of a class action includes holding a hearing to "inquire into the terms and circumstances of any dismissal or compromise to ensure that it is not collusive or prejudicial"). The court will reach a final determination as to whether the parties should be allowed to settle the class action on their proposed terms after that hearing.

         The Ninth Circuit has declared a strong judicial policy favoring settlement of class actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Nevertheless, where, as here, "the parties reach a settlement agreement prior to class certification, courts must peruse the proposed compromise to ratify both [1] the propriety of the certification and [2] the fairness of the settlement." Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003).

         The first part of this inquiry requires the court to "pay ‘undiluted, even heightened, attention' to class certification requirements" because, unlike in a fully litigated class action suit, the court "will lack the opportunity . . . to adjust the class, informed by the proceedings as they unfold." Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997); see Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). The parties cannot "agree to certify a class that clearly leaves any one requirement unfulfilled, " and consequently the court cannot blindly rely on the fact that the parties have stipulated that a class exists for purposes of settlement. See Windsor, 521 U.S. at 621-22 (stating that courts cannot fail to apply the requirements of Rule 23(a) and (b)).

         The second part of this inquiry obliges the court to "carefully consider ‘whether a proposed settlement is fundamentally fair, adequate, and reasonable, ' recognizing that ‘[i]t is the settlement taken as a whole, rather than the individual component parts, that must be examined for overall fairness . . . .'" Staton, 327 F.3d at 952 (quoting Hanlon, 150 F.3d at 1026); see also Fed.R.Civ.P. 23(e) (outlining class action settlement procedures).

         A. Class Certification

         A class action will be certified only if it meets the four prerequisites identified in Rule 23(a) and additionally fits within one of the three subdivisions of Rule 23(b). Fed.R.Civ.P. 23(a)-(b). Although a district court has discretion in determining whether the moving party has satisfied each Rule 23 requirement, the court must conduct a rigorous inquiry before certifying a class. See Califano v. Yamasaki, 442 U.S. 682, 701 (1979); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982).

         1. Rule 23(a) Requirements Rule 23(a) restricts class actions to cases where:

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). These requirements are more commonly referred to as numerosity, commonality, typicality, and adequacy of representation.

         a. Numerosity

         Under the first requirement, "[a] proposed class of at least forty members presumptively satisfies the numerosity requirement." Avilez v. Pinkerton Gov't Servs., 286 F.R.D. 450, 456 (C.D. Cal. 2012); see also, e.g., Collins v. Cargill Meat Solutions Corp., 274 F.R.D. 294, 300 (E.D. Cal. 2011) (Wanger, J.) ("Courts have routinely found the numerosity requirement satisfied when the class comprises 40 or more members."). Here, plaintiffs estimate that the proposed class will contain thousands of members because thousands of people purchased TRESemmé Naturals products. (Kindall Decl. ¶ 21 (Docket No. 57-1).) This easily satisfies the numerosity requirement.

         b. Commonality

         Commonality requires that the class members' claims "depend upon a common contention" that is "capable of classwide resolution--which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2550 (2011). "[A]ll questions of fact and law need not be common to satisfy the rule, " and the "existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class." Hanlon, 150 F.3d at 1019.

         The proposed class includes "all individuals in the United States who purchased the following TRESemmé Naturals products: (a) Nourishing Moisture Shampoo; (b) Nourishing Moisture Conditioner; (c) Radiant Volume Shampoo; (d) Radiant Volume Conditioner; (e) Vibrantly Smooth Shampoo; and (f) Vibrantly Smooth Conditioner" while they were still being sold. (Pls.' Mot. for Prelim. Approval ("Pls.' Mot.") at 2, 18 (Docket No. 57).) The class would be comprised of individuals alleging, like the named plaintiffs, that they purchased a Unilever product labeled "TRESemmé Naturals" that contained synthetic ingredients in violation of state consumer protection laws. Due to the common core of salient facts and legal contentions, the proposed class meets the commonality requirement.

         c. Typicality

         Typicality requires that named plaintiffs have claims "reasonably coextensive with those of absent class members, " but their claims do not have to be "substantially identical." Hanlon, 150 F.3d at 1020. The test for typicality "is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct." Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citation omitted).

         The putative class members allege a simple set of facts that is essentially identical to those alleged by the named plaintiffs. Both the class members and the named plaintiffs were allegedly injured by paying a premium for the TRESemmé Naturals products over comparable products that are not represented to be natural. (SAC ¶ 63.) Although class members may have purchased varying amounts of the products and therefore have claims for different amounts, the class members' claims appear to be reasonably coextensive with those of the named plaintiffs. Moreover, the differences in amounts purchased are taken into account by the settlement agreement's "Plan of Allocation, " which allots payments based on ...


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