United States District Court, S.D. California
KIM ALLEN, LAINIE RIDEOUT and KATHLEEN HAIRSTON, on behalf of themselves, all others similarly situated, and the general public, Plaintiffs,
SIMILASAN CORPORATION, Defendant.
ORDER: (1) DENYING JOINT MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT (ECF NO. 216), AND (2) DENYING AS
MOOT MOTION FOR ATTORNEYS’ FEES (ECF NO. 211)
Cynthia Bashant Uuited States District Judge.
and Defendant Similasan have filed a Joint Motion for Final
Approval of Settlement Agreement [ECF No. 216] and Plaintiffs
have filed a Motion, unopposed by Similasan, for
attorneys’ fees, costs and incentive awards. [ECF No.
211.] Because the Court determines ultimately that the
proposed settlement agreement is not fair, adequate or
reasonable for unnamed class members, the Court DENIES the
Joint Motion for Final Approval [ECF No. 216] and, therefore
DENIES AS MOOT the Motion for Attorneys’ Fees, Costs
and Incentive Awards. [ECF No 211.]
behalf of a California and a Florida class, Plaintiffs filed a
class action complaint alleging that Similasan engaged in
false or deceptive labeling of its homeopathic products.
[Third Amended Complaint, ECF No. 58 (“TAC”).]
Plaintiffs alleged that most consumers who purchase
homeopathic drugs “are unaware of homeopathic dilution
principles” and do not understand that these drugs have
undergone no scrutiny by the FDA. [TAC ¶¶ 22, 23.]
Thus class members were and are likely to be deceived by
Similasan’s advertising and marketing practices. [TAC
to the TAC, although other homeopathic drug manufacturers
have voluntarily agreed to implement an FDA disclaimer
indicating on their labels that “The FDA has not
determined that this product is safe, effective, and not
misbranded for its intended use, ” along with
additional disclaimers explaining homeopathic dilution,
Similasan has not implemented these disclaimers. [TAC
¶¶ 26-27, 84, 136.] Hence, the Plaintiffs sought
injunctive relief on behalf of the class. [TAC ¶136.]
Plaintiffs also sought disgorgement, restitution of all
monies from the sale of the homeopathic products, return of
the purchase price of products, damages and punitive damages.
[TAC ¶¶71, 85, 92, 96.]
Court granted in part and denied in part Similasan’s
Motion for Summary Judgment. [ECF No. 142.] The Court limited
the time period of recovery and dismissed the claims for
injunctive relief as to the named Plaintiffs only.
[Id.] The Court further granted in part
Plaintiffs’ motion for class certification, certifying
two classes, “all purchasers of Similasan Corp.
homeopathic Products in California…” with
respect to Nasal Allergy Relief or Sinus Relief (first class)
and Allergy Eye Relief, Earache Relief, Dry Eye Relief and
Pink Eye Relief (second class). [ECF No. 143.] The Court
approved Plaintiffs’ proposal for notice on
Similasan’s website, along with advertisements posted
in California editions of “U.S. Today, ” in the
“San Diego Union-Tribune” and on Facebook.
filed a Motion to Decertify the class, arguing that
Plaintiffs would not be able to prove materiality or falsity,
and a Motion for Partial Summary Judgment, requesting in part
that the Court extend its Order dismissing claims for
injunctive relief to the entire class. [ECF Nos. 164, 171.]
Plaintiffs’ counsel responded to these Motions. [ECF
Nos. 173, 175.] Trial was scheduled to begin March 29, 2016.
On January 26, 2016, the parties notified the Court it had
reached a settlement which was filed on March 31, 2016. [ECF
Nos. 196, 202.]
Settlement Agreement jointly proposes that this Court certify
a class defined as:
All purchasers of all Similasan Corporation homeopathic
Products nationwide for personal or household use and not for
resale, as listed in Exhibit A to this Agreement [including
41 Similasan products] from February 10, 2008 to the present.
No. 202-4 §2.2.] Thus, the proposed Settlement greatly
expands the class beyond what was alleged in the TAC and
beyond what was certified by this Court to include a
nationwide class involving many more Similasan products.
Settlement provides for injunctive relief only, including a
disclaimer on all Similasan product labels that “These
statements are based upon traditional homeopathic principles.
They have not been reviewed by the Food and Drug
Administration.” Similasan agrees to make these label
changes no later than twelve months after the effective date
of the Settlement Agreement. [ECF No. 202-4 §5.1.4.] The
Settlement Agreement also provides that Similasan shall
maintain a homeopathic dilution explanation web page or
portion thereof on all websites that it owns or operates
regarding the Products. The explanation shall conform to the
explanations provided by HPUS (a private organization of
homeopaths), and the web pages shall include a link to the
FDA web site’s Compliance Policy Guide §400.400.
[ECF No. 202-4 §5.1.3.] The Settlement Agreement
includes no monetary relief for unnamed class members.
exchange for the Settlement Agreement, all class members
.With the exception of claims for personal injury, any and
all claims, demands, rights, suits, liabilities and causes of
action of every nature and description whatsoever known or
unknown, matured or unmatured, at law or in equity, existing
under federal and/or state law including without limitation a
waiver of all rights under Section 1542 of the California
Civil Code, that [any class member] has or may have against
[Similasan or any related parties] arising out of in
connection with or related in any way, directly or
indirectly, to Defendant’s advertising, marketing,
manufacturing, packaging, labeling, promotion, sale, or
distribution of the Products, that have been brought, could