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Guttmann v. Ole Mexican Foods, Inc.

United States District Court, N.D. California

August 1, 2016

VICTOR GUTTMANN, Plaintiff,
v.
OLE MEXICAN FOODS, INC., Defendant.

          ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS' FEES AND COSTS RE: DKT. NOS. 54, 55

          HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE

         Before the Court are Plaintiff Victor Guttman’s (“Plaintiff”) motions for final approval of class action settlement, Dkt. No. 54 (“Mot.”), and for attorneys’ fees and costs, Dkt. No. 55 (“Fees Mot.”). Defendant Ole Mexican Foods, Inc. (“Defendant”) does not oppose either motion.

         For the reasons set forth below, the Court GRANTS Plaintiff’s motions for final approval of class action settlement and for attorneys’ fees and costs.

         I. BACKGROUND

         Plaintiff filed this food-labeling class action on October 31, 2014. Dkt. No. 1 (“Compl.”). Plaintiff alleges that Defendant failed to properly disclose that its “Xtreme Wellness” line of tortillas contain partially-hydrogenated oil, an artificial trans-fat food additive. Id. ¶¶ 5, 9, 11. On that basis, Plaintiff asserts six causes of action against Defendant for violating California’s unfair competition law (Cal. Bus. & Prof. Code § 17200, et seq.) (“UCL”), False Advertising Law, (Cal. Bus. & Prof. Code § 17500, et seq.) (“FAL”), and Consumer Legal Remedies Act (Cal. Civ. Code § 1750, et seq.) (“CLRA”), and for breaching express warranties. Id. ¶¶ 123-76.

         Defendant filed a motion to dismiss on federal preemption grounds, Dkt. No. 12, and a motion to stay discovery pending resolution of that motion, Dkt. No. 24. But Defendant withdrew both after new case law emerged from the Ninth Circuit addressing the preemption issue. Dkt. No. 37. The parties agreed to settle the case on a classwide basis shortly thereafter. Dkt. No. 41. Before the parties ceased active litigation, Plaintiff served some written discovery on Defendant, to which Defendant served objections and responses. Mot. at 10.

         Plaintiff filed a motion for preliminary approval of the class action settlement on July 2, 2015. Dkt. No. 48. The proposed settlement would enjoin Defendant from using any partially-hydrogenated oils in their Xtreme Wellness line of tortillas for a period of ten years. Id. at 2. In exchange, the putative class would release their claims against Defendant regarding, among other things, the manufacturing, advertising, sale, labeling, and the ingredients of these tortilla products, excepting personal injury claims. Id. Defendant agreed to pay for class notice, which included: (1) publishing a long-form class notice in USA Today; (2) displaying banner advertisements on Facebook (at least 25, 000 times); and (3) creating a bilingual website that provided the settlement agreement and other case-related documents. Id. And, upon final approval, the parties agreed that Plaintiff could seek up to $1, 800 as an incentive and Plaintiff’s counsel could seek up to $85, 000 in fees and costs without opposition from Defendant. Id. The Court granted preliminary approval, provisionally certifying the proposed nationwide injunctive-relief class under Federal Rule of Civil Procedure 23(b)(2) and directing class notice as agreed by the parties. Dkt. No. 52.

         On December 31, 2016, Plaintiff filed the instant motions for final approval of class action settlement and for attorneys’ fees and costs. In his final approval motion, Plaintiff represents that the class notice program was implemented as the Court directed. Mot. at 5-6. The settlement administrator received no objections to the proposed settlement from class members. Dkt. No. 56.

         The Court held a final fairness hearing on February 11, 2016. Dkt. No. 58. At the hearing, no class members objected, commented, or otherwise appeared. The Court took the matter under submission, but also ordered that: (1) Defendant file a declaration confirming that the Facebook component of the notice plan was performed, which was not apparent from the moving papers; and (2) Plaintiff file a declaration setting forth what Plaintiff did to assist this case and the hours he spent doing so. Id. Both declarations were timely filed as requested. Dkt. Nos. 59 & 60.

         II. DISCUSSION

         A. Motion for Final Approval of Class Action Settlement

         The Court now considers whether final approval of the proposed class action settlement is appropriate. Finding that the parties performed the class notice program as directed and that there were no objections to the proposed settlement, the Court grants final approval.

         1. Adequacy of Class Notice

         Federal Rule of Civil Procedure 23(e) governs class action settlements, including notice. When any certified class settles its claims, courts “must direct notice in a reasonable manner to all class members who would be bound by the proposal.” Fed.R.Civ.P. 23(e)(1); see also William B. Rubenstein, Newberg on Class Actions § 4:36 (5th ed. rev. June 2016) (“Rule 23(c) makes notice of a class certification decision discretionary [for Rule 23(b)(2) class actions], but Rule 23(e) requires that (b)(2) class members receive notice of any proposed settlement[.]”) (emphasis original). Additionally, Rule 23(h) requires that class members receive notice of any claim for an award of attorneys’ fees and costs. Fed.R.Civ.P. 23(h)(1); see also Rubenstein, supra, § 4:36.

         In its order granting preliminary approval, the Court directed a three-part notice plan. That plan included: (1) publishing a long-form, one-time class notice in USA Today; (2) displaying banner advertisements on Facebook at least 25, 000 times; and (3) creating a bilingual website that provided the settlement agreement and other case-related documents to interested persons. Id. Plaintiff’s counsel has submitted a declaration attesting that the newspaper notice was published and that the settlement website was properly created. Dkt. No. 54-1 ¶¶ 3, 5-8. Rust Consulting, the settlement administrator, has also submitted a declaration, attesting that the Facebook notice was published in the manner and frequency directed. Dkt. No. 60. The Court finds that the class notice delivered complied with the preliminary approval order, Rule 23(e), and Rule 23(h).

         2. Fairness, Reasonableness, and Adequacy of Settlement

         Federal Rule of Civil Procedure 23(e) requires that “[t]he claims, issues, or defenses of a certified class may be settled . . . only with the court’s approval.” Courts may approve of a class action settlement “only after a hearing and on finding that it is fair, reasonable, and adequate.” Fed.R.Civ.P. 23(e)(2); Hanlon v. Chrysler ...


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