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) GRANTING JOINT MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION SETTLEMENT; (2) CONDITIONALLY
APPROVING THE SETTLEMENT CLASS; (3) SETTING HEARING ON FINAL
APPROVAL OF SETTLMENT
Cynthia Bashant United States District Judge
Lainie Rideout and Kathleen Hairston and Defendant Similasan
Corporation (the “Parties”) have entered into a
Settlement Agreement to resolve this Class Action litigation.
For the reasons discussed below, the Court
GRANTS the Parties' Joint Motion (ECF
No. 257) and preliminarily approves the Settlement Agreement.
The Court sets the matter for Final Hearing on August 7, 2017
at 10:30 a.m.
filed a class action Complaint on behalf of a California and
Florida class, alleging that Similasan engaged in false
or deceptive labeling of its homeopathic products. (ECF No.
58, Third Amended Complaint (“TAC”).)
Court granted Plaintiffs' motion for class certification,
certifying two classes: all purchasers of Similasan
homeopathic products in California with respect to Nasal
Allergy Relief or Sinus Relief (first class) and all
purchasers of Similasan homeopathic products in California
with respect to Allergy Eye Relief, Earache Relief, Dry Eye
Relief and Pink Eye Relief (second class). (ECF No. 143.)
Court granted in part Similasan's Motion for Summary
Judgment, limiting the time period of recovery and dismissing
the claims for injunctive relief. (ECF Nos. 142, 247.) The
Parties previously attempted a settlement that involved
injunctive relief only, which was rejected by the Court. (ECF
Nos. 202, 223.)
lengthy negotiations, motion practice and discovery, the
Parties now submit a second Joint Motion for Preliminary
Approval of Class Settlement. (ECF No. 257.)
The Settlement Agreement
Parties propose that this Court certify as a class:
[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, from
February 10, 2008 to the present.
Settlement Agreement § 2.6.
the proposed class expands the class beyond the originally
certified class to include all purchasers nationwide, instead
of just in California, and expands the products beyond the
original nasal, sinus, eye and ear relief to a wide swath of
Similasan homeopathic products. See Exhibit A to the
Settlement Agreement (ECF No. 257-4).
will establish a Fund of $700, 000. (Settlement Agreement
§ 5.1.2.) Class members may submit a claim form with a
declaration that they purchased a class product that did not
provide any relief. (Settlement Agreement § 6.2.)
Alternatively, class members may submit a proof of purchase
for each class product purchased. Id. Claimants
without a proof of purchase are limited to one claim.
Claimants with a valid proof of purchase may submit a claim
for each class product purchased. Id.
payment of the costs of notice, administration and
distribution of the settlement, attorneys' fees, expenses
and representative award will be paid from the fund.
(Settlement Agreement §§ 7.2.3, 7.3.3.) Class
counsel will request reimbursement for expenses and up to 25%
of the fund for attorneys' fees. (Settlement Agreement
§ 5.1.4.) Counsel will also request $2500 each or $5000
total for the representative plaintiffs. (Settlement
Agreement § 5.1.3.)
submitting a proof of purchase are entitled to full repayment
of their purchase price. Claimants submitting a declaration
are entitled to reimbursement, which counsel estimates will
be at least $3.50. (Dixon Decl. ¶ 30.) This amount
represents approximately 50% of the average retail price of
each Class Product. (Declaration of Michele Gillette, ECF No.
257-6 (“Gillette Decl.”) ¶7.) If there are
any remaining amounts in the settlement fund, after payment
of claims, costs and attorneys' fees, these amounts will
be distributed on a pro rata basis to class members who have
made a claim. (Settlement Agreement § 5.1.5.)
addition to the monetary consideration for the Settlement,
Similasan has also agreed to make label changes to its
products, providing more information to future purchasers of
the products, something the Plaintiffs sought at the outset.
(Settlement Agreement § 5.2.)
return for these benefits, all class members will release all
claims arising from the allegations in the operative
complaint concerning the class products. (Settlement
Agreement § 8.) Class members will not waive any right
to pursue personal injury claims or to redress their claims,
if any, with any governmental agency. (Id.)
Settlement Agreement proposes posting notice on a Settlement
website, providing the required CAFA notice to state
Attorneys General and United States Attorneys, submitting
online advertising on Facebook targeted to reach likely
homeopathy users (10 million impressions), publishing a press
release on PR Newswire's website and publishing notice
four times in the “San Diego Union-Tribune”
newspaper. (Settlement Agreement §§ 7.2, 7.3.)
Ninth Circuit maintains a “strong judicial
policy” that favors the settlement of class actions.
Class Plaintiffs v. City of Seattle, 955 F.2d 1268,
1276 (9th Cir. 1992). However, Federal Rule of Civil
Procedure 23(e) first “require[s] the district court to
determine whether a proposed settlement is fundamentally
fair, adequate, and reasonable.” In re Mego Fin.
Corp. Sec. Litig., 213 F.3d 454, 458 (9th Cir. 2000)
(citing Hanlon v. Chrysler Corp., 150 F.3d 1011,
1026 (9th Cir. 1998)). Where the “parties reach a
settlement agreement prior to class certification, courts
must peruse the proposed compromise to ratify both the
propriety of the certification and the fairness of the
settlement.” Staton v. Boeing Co., 327 F.3d
938, 952 (9th Cir. 2003). In these situations, settlement
approval “requires a higher standard of fairness and a
more probing inquiry than may normally be required under Rule
23(e).” Dennis v. Kellogg Co., 697 F.3d 858,
864 (9th Cir. 2012) (internal quotation marks omitted).
granting preliminary approval of a class-action settlement,
the Court must first determine whether the proposed class can
be certified. Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 620 (1997) (indicating that a district court must
apply “undiluted, even heightened, attention [to class
certification] in the settlement context” in order to
protect absentees). The class action is “an exception
to the usual rule that litigation is conducted by and on
behalf of the individual named parties only.”
Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348
(2011) (quoting Califano v. Yamasaki, 442 U.S. 682,
order to justify a departure from that rule, “a class
representative must be part of the class and ‘possess
the same interest and suffer the same injury' as the
class members.” Id. (citing E. Tex. Motor
Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403
(1977)). In this regard, Rule 23 contains two sets of
class-certification requirements set forth in Rule 23(a) and
(b). United Steel, Paper & Forestry, Rubber, Mfg.
Energy, Allied Indus. & Serv. Workers Int'l Union v.
ConocoPhillips Co., 593 F.3d 802, 806 (9th Cir. 2010).
“A court may certify a class if a plaintiff
demonstrates that all of the prerequisites of Rule 23(a) have
been met, and that at least one of the requirements of Rule
23(b) have been met.” Otsuka v. Polo Ralph Lauren
Corp., 251 F.R.D. 439, 443 (N.D. Cal. 2008).
23(a) provides four prerequisites that must be satisfied for
class certification: (1) the class must be so numerous that
joinder of all members is impracticable; (2) questions of law
or fact exist that are 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.” Otsuka, 251 F.R.D. at 443 (citing
Fed.R.Civ.P. 23(a)). “A plaintiff must also establish
that one or more of the grounds for maintaining the suit are
met under Rule 23(b), including: (1) that there is a risk of
substantial prejudice from separate actions; (2) that
declaratory or injunctive relief benefitting the class as a
whole would be appropriate; or (3) that common questions of
law or fact predominate and the class action is superior to
other available methods of adjudication.” Id.
(citing Fed.R.Civ.P. 23(b)).
Parties seek class certification under Rule 23(b)(3). In the
context of a proposed settlement class, questions regarding
the manageability of the case for trial are not considered.
See Wright v. Linkus Enters., Inc., 259 F.R.D. 468,
474 (E.D. Cal. 2009) (citing Amchem Prods., Inc.,
521 U.S. at 620 (1997) (“Confronted with a request for
settlement-only class certification, a district court need
not inquire whether the case, if tried, would present
intractable management problems . . . for the proposal is
that there be no trial.”)).
case, the Court previously found that both the requirements
of Rule 23(a) and 23(b)(3) had been met. (ECF No. 143.)
Expansion of the class to include all purchasers nationwide
as well as purchasers of additional products does not change
this analysis. The new class is more numerous than the
originally certified one and the representation is equally
adequate. Furthermore, Similasan's conduct appears to be
uniform across the United States as well as across the wide
variety of products: it sold products bearing representations
about the products' effectiveness. As the Court
previously found, given the uniformity of the efficacy
representations, small differences in the labeling are
insignificant. This new class still presents common questions
of fact and law, the claims and defenses of the
representative parties are equally typical and the common
questions of law or fact ...