Judge: Lon F. Hurwitz, Case: 21-01189853, Date: 2024-04-05 Tentative Ruling
1. Motion for Approval of Class Settlement
2. Motion to Certify Class
3. Status Conference
Moving Party: Plaintiffs Leann Schneider, Michael Sporn, Crystol De La Cruz, Angelina Sharp, and Kathryn Churchill, individual and on behalf of other similarly situated
Responding Party: None (unopposed)
SERVICE: June 8, 2023, by electronic service
RELIEF SOUGHT: Plaintiffs seek: (1) preliminary approval of a proposed Class Action Settlement with Defendants, and (2) certification of California Settlement-only Class.
UPCOMING EVENTS: None
FACTS/OVERVIEW: This is a putative class action for violations of California’s consumer protection laws. Plaintiffs allege that All-Clad Metalcrafters LLC (“All-Clad”) and Groupe SEB USA, Inc. (“T-Fal”) (collectively, “Defendants”) falsely advertised their products with express warranties. Defendants separately manufacture kitchen appliances, cookware, and other consumer goods, and advertise that their products are sold with express warranties. Both All-Clad and T-Fal include warranty registration cards within their product packaging and make their warranty registration forms available on their respective websites.
Plaintiffs are consumers who purchased either All-Clad or T-Fal products with the expectation that they came with automatic warranties. Instead, Plaintiffs found warranty registration cards with their purchased products, and discovered they were required to “register” their warranties. Plaintiffs do not contend that the respective warranties did not exist. Rather, Plaintiffs assert that Defendants’ practices were contrary to California law because they result in a chilling effect on the submission of warranty claims, and mislead consumers into purchasing products that either did not have a warranty or failed to disclose that the warranty came with certain requirements,
On March 17, 2021, Plaintiffs Leann Schneider, Michael Sporn, and Kathryn Churchill (collectively, “the All-Clad Plaintiffs”) filed the original Complaint (ROA 2) against Defendant All-Clad Metalcrafters, LLC (“All-Clad”) alleging causes of action for: (1) Violation of Song-Beverly Consumer Warranty Act; (2) Violation of Consumer Legal Remedies Act; and (3) Violation of California’s Unfair Competition Law.
As a matter of right, the All-Clad Plaintiffs filed the First Amended Complaint on May 18, 2021, alleging the same causes of action. (ROA 23)
Class definition: The FAC alleges the Classes consist of:
a. All persons who purchased one or more of Defendant’s products within California during the four (4) years immediately preceding the filing of the Complaint through the date of class certification, which were accompanied by a warranty or product registration card or form, or an electronic online warranty or produce registration form, to be completed and returned by the consumer, which do not contain statements, each displayed in a clear and conspicuous manner, informing the consumer that: i) the card or form is for product registration, and ii) informing the consumer that failure to complete and return the card or form does not diminish his or her warranty rights.
b. All persons who purchased one or more of Defendant’s products within California during the four (4) years immediately preceding the filing of the Complaint through the date of class certification, which were accompanied by a warranty or product registration card or form, or an electronic online warranty or product registration form, which is labeled as a warranty registration or a warranty confirmation.
c. All persons who purchased one or more of Defendant’s products within California during the three (3) years immediately preceding the filing of the Complaint through the date of class certification, which were advertised as being accompanied with an express warranty but which do not contain a warranty, and/or contain warranty activation, confirmation or registration cards requiring persons to provide their personal data or take additional steps in order to receive a warranty. [FAC, ¶ 56.]
On October 29, 2021, Plaintiffs Crystol De La Cruz and Angelina Sharp (collectively, “the T-Fal Plaintiffs”) filed a Complaint in San Bernardino Superior Court, Case No. CIVSB2127396, against Defendant Groupe SEB USA, Inc. (“T-Fal”) asserting claims of consumer protection laws violations. The case was timely removed by T-Fall to the U.S. District Court for the Central District of California on December 3, 2021. The T-Fal Plaintiffs then filed a motion to remand the case to state court. The next day, T-Fal filed a motion to dismiss the Complaint. [Declaration of Abbas Kazerounian (“Kazerounian Decl.”) (ROA 199), ¶¶ 10, 14.]
The All-Clad Plaintiff and T-Fal Plaintiffs separately agreed to stay their cases and go to private mediation to resolve their respective disputes with All-Clad and T-Fal. On June 23, 2022, and August 2, 2022, the parties attend mediation sessions with Bruce Friedman of JAMS. Following mediation, the parties engaged in extensive good faith settlement discussions for approximately ten months. [Kazerounian Decl., ¶ 17.]
After reaching a settlement in principle, the All-Clad Plaintiffs and All-Clad filed a Joint Status Report on October 27, 2022, stating that they anticipated filing a stipulation for leave to file a consolidated amended complaint that would include the claims of the T-Fal Plaintiffs against T-Fal. (ROA 162). The stipulation was filed on November 9, 2022. (ROA 174).
Subsequently, the T-Fal Plaintiffs dismissed their action without prejudice. On November 14, 2022, the All-Clad Plaintiffs and T-Fal Plaintiffs (collectively, “Plaintiffs”) filed the operative Consolidated Amended Class Action Complaint (“CAC”) against Defendants. (ROA 177). The Consolidated Complaint alleges the same causes of action that are contained in the All-Clad Plaintiffs’ FAC.
The Settlement Agreement was signed by Plaintiffs on May 5, 2023, and executed by Defendants on May 9, 2023. [Kazerounian Decl., ¶ 18.] The Motion for Preliminary Approval was filed on June 14, 2023.1 (ROA 236). This is the first hearing on this matter.
SUMMARY OF THE SETTLEMENT:
A fully executed copy of the Settlement Agreement and Release (“Settlement”) is attached as Exhibit 1 to the declaration of Class Counsel. (ROA 199). The All-Clad Plaintiffs are identified as the “State Court Plaintiffs,” and the T-Fal Plaintiffs are identified as the “Federal Court Plaintiffs.”
ISSUE: Page 1, first Recital – should read “…the Federal Court Plaintiffs filed a putative class action against Groupe SEB USA, Inc. in the Superior Court of California, San Bernardino County ….”
Sec. 1.H – should read “…or his duly appointed successor.”
Settlement Class Definition: “All persons who, between March 17, 2017, and the date of the filing of the Motion for Preliminary Approval, purchased All-Clad or T-Fal Cookware at a store located in California or, if purchased remotely (such as catalog or online), from or shipped to an address in California.” 2 [Settlement, ¶1.GG.]
Excluded from this definition are Defendants, and Defendants’ affiliates, employees, officers, directors, attorneys, agents, insurers, and the attorneys representing Defendants in this case; the judges and mediators to whom the Action is assigned and their immediate family members; all persons who request exclusion from (opt-out of) the Settlement; any claims for personal injury, property damage (other than to Defendants’ Cookware), or subrogation; and all persons who previously released any claims encompassed in this settlement. [Ibid.]
This Settlement Class definition is adequate since all of the causes of action are based on packaging and labeling that advertised that the products were accompanied by a “lifetime” or “express” warranty without conditions.
Estimated Class Size: 1,705,000 (approximately 28% involving All-Clad product purchases and approximately 72% involving T-Fal product purchases). [Declaration of Jason A. Ibey (“Ibey Decl.”) (ROA 211), ¶ 10.]
ISSUE: The estimated class size is not stated in the Settlement Agreement.
Maximum Settlement Amount (MSA): Not applicable. This is not a common funds settlement.
Monetary Relief. The proposed Settlement provides monetary awards to Settlement Class Members who purchased All-Clad Cookware valued at either an $8.00 monetary payment or a $10.00 voucher (after providing proof of purchase), and to Settlement Class Members who purchased T-Fal Cookware a monetary payment of $4.00. [Settlement, ¶¶ 11, 12.] In addition, all Settlement Class Members who purchased All-Clad Cookware or T-Fal Cookware are entitled to make a warranty claim regarding a defect in their purchased product pursuant to the terms set forth in the Limited Lifetime Warranty. The Settlement requires Settlement Class Members to submit a claim form for the monetary relief. [Ibid.]
Settlement Class Members entitled to only a single recovery regardless of the number of All-Clad Cookware or T-Fal Cookware items purchased during the Class Period. However, Settlement Class Members may submit one claim for the purchase of All-Clad Cookware and one claim for the purchase of T-Fal Cookware if both products were purchased during the Class Period. [Settlement, ¶ 13.]
ISSUE: Settlement does not provide an estimate of the monetary value of the maximum settlement amount. In counsel’s declaration, he attests he estimates a claims rate of approximately 3%. [Ibey Decl., ¶ 10.]
Injunctive Relief. Defendants have completed, or are in the process of completing, packaging changes to remove “Register your warranty” language, “Activate your warranty” language, and other similar language which could be construed as inconsistent with the Song-Beverly Consumer Warranty Act from all All-Clad and T-Fal Cookware packaging and labeling. Defendants have also completed removal of similar language on All-Clad and T-Fal websites and any other promotional and marketing materials. Defendants agree to comply with the requirements of this section no later than 60 days following entry of the Court’s Preliminary Approval Order. [Settlement, ¶ 15.]
Payments to Class:
How Calculated? Not applicable. Any Settlement Class Member who purchased All-Clad Cookware and who submits a Claim Form, including proof of purchase, during the Claims Submission Period, will receive either a check for eight dollars ($8) or a ten dollar ($10) voucher for purchase of an item on sale on the All-Clad website. [Settlement, ¶ 11.]
All Settlement Class Members who purchased T-Fal Cookware and who submit a Claim Form, including proof of purchase, during the Claims Submission Period, will receive a check for four dollars ($4). [Settlement, ¶ 12.]
Claims Made? Yes. The “Claims Submission Period” will commence on the first day the Claims Administrator begins sending the Class Notice (i.e., 30 days after the date of the Preliminary Approval Order), and will conclude 60 days thereafter (i.e., 90 days after date of Preliminary Approval Order). [Settlement, ¶ 1.E.]
Claims Administrator will begin issuing payments within 30 days following the Effective Date, which shall be completed no later than 60 days following the Effective Date. [Settlement, ¶ 14.]
"Effective Date” is the earliest of: (1) the date of the Final Approval Order, if no objections filed; (2) if objections filed, then the date on which the time for appeal from the Final Approval Order has elapsed without any appeals being filed; or (3) if any appeals filed, then the date on which all appeals from the Final Approval Order or from any appellate court decisions affirming the Final Approval order have been exhausted, and no further appeal may be taken. [Settlement, ¶ 1.L.]
Reversion? No. [Settlement, ¶ 14.]
Taxation? Not applicable.
Uncashed Any unpaid residue or unclaimed or Checks? or abandoned settlement checks “shall be distributed to one or more charitable entities as a cy pre distribution.” [Settlement, ¶ 14.] Checks valid for 180 days after issuance.
ISSUE: Settlement must identify cy pres recipient.
Average Pymt. Since Settlement requires submission of a Claim Form for the monetary relief, as this is not a common funds settlement, one Settlement Class Member’s recovery or claim does not affect another person’s recovery or claim. Every Settlement Class Member who submits a claim will be compensated in equal form as to either All-Clad Cookware purchases or T-Fal Cookware purchases. [See, Declaration of Adib Assassi (“Assassi Decl.”) (ROA 213), ¶ 10.c.]
CERTIFICATION OF THE CLASS
Although the provisional process is less demanding than a traditional motion for class certification, a trial court reviewing an application for preliminary approval of a settlement must still find that the normal class prerequisites have been met. (See, Amchem Products, Inc. v. Windsor (1997) 521 U.S. 591, 625-627; in accord, Carter v. City of Los Angeles (2014) 224 Cal.App.4th 808, 826.) The burden of proof rests with the party seeking class certification.
A plaintiff seeking class certification is required to “demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives. In turn, the community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Brinker Restaurant Corporation v. Superior Court (2012) 53 Cal.4th 1004, 1021 [internal quotes and citations omitted].) These elements are typically referred to as: (1) ascertainability; (2) numerosity; (3) commonality; (4) typicality; (5) adequacy; and (6) superiority.
But it is noted that different criteria apply in suits brought under the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.). (Davis-Miller v. Automobile Club of Southern Calif. (2011) 201 Cal.App.4th 106, 121-122.) If the following are shown, the court must certify the class; i.e., it has no discretion to deny certification based on other criteria. (See, Hogya v. Sup.Ct. (National Meat Packers, Inc.) (1977) 75 Cal.App.3d 122, 140):
· It is impracticable to bring all members of the class before the court;
· The questions of law or fact common to the class predominate over questions affecting the individual members;
· The representative plaintiffs' claims or defenses are typical of the claims or defenses of the class; and
· The representative plaintiffs will fairly and adequately protect the interests of the class.
(Civ. Code, § 1781, subd. (b); see Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 438; Davis-Miller v. Automobile Club of Southern Calif., supra, 201 Cal.App.4th at 121-122; Massachusetts Mut. Life Ins. Co. v. Sup.Ct. (Karges) (2002) 97 Cal.App.4th 1282, 1287 [CLRA class certified for 33,000 life insurance purchasers based on deceptive sales representations].)
The issue here is whether there is sufficient commonality for certification. Whether common issues of law or fact predominate hinges on “whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On Drugs, Inc. v. Superior Court (2004) 34 Cal.4th 319, 327.)
Each of the Plaintiffs’ causes of action are based on alleged misrepresentations regarding the contingent warranties on Defendants’ products. Causation in a misrepresentation case depends on a finding that the plaintiff relied on the defendant’s misrepresentation. (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1556-1557 [in a CLRA claim based on misrepresentation, a plaintiff must prove defendant’s conduct was deceptive and that deception caused harm; plaintiff must prove causation and actual injury; fraud requires justifiable reliance on the misrepresentation]; Tucker v. Pacific Bell Mobile Services, supra, 208 Cal.App.4th at 226-227 [UCL claim based on false advertising requires proof of reliance and materiality].)
In the class context, rather than requiring member-by-member proof of reliance, California law allows a plaintiff to take advantage of an “inference of reliance” when the same representations are made to all class members. (See Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1292-1293 [“Thus, ‘[i]t is sufficient for our present purposes to hold that if the trial court finds material misrepresentations were made to the class members, at least an inference of reliance would arise as to the entire class.’”].) A presumption, or at least an inference, of reliance arises when there is a showing the misrepresentation was material. A misrepresentation is material if a reasonable man attaches importance to its existence or nonexistence in determining his choice of action in the transaction in question, and as such, materiality is generally a question of fact unless the “fact misrepresented is so obviously unimportant that a jury could not reasonably find that a reasonable man would have been influenced by it.” (Tucker v. Pacific Bell Mobile Services, supra, 208 Cal.App.4th 201, 226.) “[I]f the issue of materiality or reliance is a matter that would vary from consumer to consumer, the issue is not subject to common proof, and the action is properly not certified as a class action.” (Id. at p. 228, citing to In re Vioxx Cases (2010) 180 Cal.App.4th 116, 129.)
Here, each of the named Plaintiffs allege the products’ internet advertising prominently displayed that the products were accompanied by a lifetime or express warranty, or that the exterior packaging represented the product was accompanied by an express lifetime warranty. [See, CAC, ¶¶ 24, 33, 41, 51.] Plaintiffs also allege Defendants’ registration websites do not inform consumers it is for product registration, and lead consumers to believe registration is required for their warranties to be valid. In addition, Plaintiffs allege Defendants intend for the warranty registration requirement to have a chilling effect on warranty claims. [CAC, ¶¶ 69, 72, 74.] Notably, Plaintiffs then alleged that had Defendants’ advertising disclosed that their express warranties were contingent on registration by the consumer, Plaintiffs would not have purchased the products or would not have paid a premium.
This is sufficient to raise the inference of reliance. Whether the products were purchased online or in a retail store, consumers likely saw either product advertising or labeling before deciding to purchase the products. Although consumers may have had different reasons for deciding to purchase the products, all of them were impacted by the apparent “requirement” to “register” their products in order to “activate” the benefits of the warranty. This representation that registration was required to activate the warranty should be considered material since it likely induced individual consumers to alter their position to their detriment (i.e., registering the product even though failure to do so would not diminish the consumer’s warranty rights, or deciding not to pursue a warranty claim because consumer did not “timely” register the product).
Nevertheless, the application of the inference does not end the commonality inquiry. A defendant may put on evidence to rebut the inference. (See Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 667 fn. 20 [defendants could also properly introduce evidence to rebut any inference or presumption of reliance arising from evidence of a material misrepresentation.”].)
Here, the Settlement only indicates that Defendants “specifically deny all of the allegations made in connection with this Action.” [Settlement, ¶ 43.] But the Settlement does not provide any other information about those denials, and Defendants have not introduced any evidence to rebut the inference of reliance.
Accordingly, it should be found that all of the requisite elements are met for conditional certification of the class for settlement purposes. Plaintiffs obtained informal discovery post-mediation and served confirmatory Special Interrogatories on Defendants regarding a reasonable estimate of the number of units of each of the Cookware products sold in California during the Class Period. Under Settlement, Defendants will provide confirmatory oral deposition (a PMQ deposition) within 30 days of Preliminary Approval Order. [See, Assassi Decl., ¶ 10.a.] Class appears to be ascertainable, sufficiently numerous, and well-defined. The parties agree to conditional certification of the class for settlement purposes.
SETTLEMENT ISSUES
1. Release:
“Upon the Effective Date, the Settlement Class Representatives and Settlement Class Members shall each and do hereby forever release, discharge, waive, and covenant not to sue the Released Parties regarding any and all of the Released Claims. [Settlement, ¶ 31.A.]
“Released Claims” refers to any and all claims, including demands, rights, liabilities, and causes of action, of every nature and description, that were asserted or could have been asserted in this Action, which relate to allegedly improper warranty information on Defendants’ registration cards/forms and online registration forms for the Cookware, based on the Song-Beverly Consumer Warranty Act, and allegedly in violation of the California Consumer Legal Remedies Act or California’s Unfair Competition Law, excluding claims for property damage (other than to the Cookware itself) or personal injury. [Ibid.]
“Released Parties” include All-Clad and Groupe SEB USA, their direct and indirect parents, subsidiaries, successors-in-interest, officers, directors, authorized retailers, suppliers, licensors, licensees, distributors, assemblers, partners, component part designers, manufacturers, holding companies, joint ventures, and any individuals or entities involved in the chain of design development, testing, manufacture, sale, assembly, distribution, marketing, advertising, financing, warranting, and repair of the Cookware and their component parts. [Ibid.]
Release encompasses all claims for attorneys’ fees, litigation costs, other fees or costs, and/or disbursements that Class Counsel or Settlement Class Representatives have incurred in connection with this litigation. [Id. at ¶ 31.B.]
2. Additional Terms of Release:
As it relates solely to All-Clad Cookware and T-Fal Cookware, excluding any rights to personal claims, the foregoing waiver by Defendants and the Settlement Class Representatives (excluding all other Settlement Class Members), includes express waiver of rights conferred by Civil Code section 1542. Waiver also includes any and all rights under law of any state or U.S. territory and any federal or international law that is comparable to Section 1542. [Settlement, ¶ 31.A.i.]
Defendants and Settlement Class Representatives agree that upon entry of Final Approval Order, they will fully, finally, and forever settle and release any and all of the Released Claims. [Ibid.]
Settlement Class Representatives agree Release will be and may be raised a complete defense to, and will preclude any action or proceeding relating to, the Released Claims. [Id. at ¶ 31.C.]
ISSUE: As drafted, the Section 1542 waiver is not appropriate. It should not include language implicating federal, international, or state law (other than California) when there is no information about the claims available to the parties in other jurisdictions.
3. Valuation of Claims:
Not applicable. This is not a common funds settlement. Plaintiffs conducted informal discovery, and Defendants provided written confirmatory discovery responses and data relating to All-Clad and T-Fal products, respectively, and the estimated number of units sold in California during the relevant time period. Counsel attests that based on his experience, he estimates a claims rate of approximately 3%. [Ibey Decl., ¶ 10.]
On June 23, 2022, and August 2, 2022, the parties participated in mediation sessions with Bruce Friedman of JAMS. [See, Kazerounian Decl., ¶ 17; Assassi Decl., ¶ 8; Ibey Decl., ¶ 5.]
Counsel attests that proposed settlement is fair and reasonable, especially since it provides for both monetary recovery and a change in product packaging and labeling practices by Defendants. [Ibey Decl., ¶ 7; Assassi Decl., ¶ 10.]
Settlement provides monetary awards to Settlement Class Members who purchased All-Clad Cookware of either an $8.00 check or a $10.00 voucher. Settlement Class Members who purchased T-Fal Cookware will receive monetary awards of $4.00 each. [Kazerounian Decl., ¶ 19.]
All Settlement Class Members also are allowed to submit a product warranty claim regardless of whether they submit a Claim Form. [Ibid.]
Class Counsel specifically attests that it is in the best interests of the parties to settle in light of the risks, expense, and likely delay caused by further litigation. [Kazerounian Decl., ¶ 20.]
ISSUE: None of the attorneys explain how they reached the monetary awards portion of the settlement, other than to explain the differential between the All-Clad monetary award and the T-Fal monetary award is due to the fact that All-Clad is more expensive that T-Fal. [Assassi Decl., ¶ 10.c.]
4. Requests for Exclusion:
Any Class Member may opt out of Settlement by mailing or delivering written request. Opt out request must be postmarked or received online via the Settlement Website no later than the deadline specified in the Preliminary Approval Order. Sample opt out request form will be included on the Settlement Website. Class Members who opt out cannot object to the Settlement and will be deemed to have waived any rights or benefits under the Settlement. Any Class Member who submits both an opt out request and a Claim Form will be deemed to have requested to be excluded from the settlement. [Settlement, ¶¶ 20, 22.]
“Opt-Out Deadline” is “the date agreed upon by the Parties, or otherwise ordered by the Court in the Preliminary Approval Order.” It shall be no later than 90 days after the date of the Preliminary Approval Order. [Settlement, ¶ 1.S.]
ISSUE: This language is inconsistent with Paragraph 5.G., which states that Class Members must submit written opt out request “by the Exclusion Deadline and Opt-Out Deadline.” [Settlement, ¶ 5.G.] There is no definition provided for “Exclusion Deadline.”
Opt out deadline should be tied to the date the Class Notice is mailed. It also should provide a time period for remailed notices. Settlement must provide that the Court ultimately decides the validity and authenticity of opt out requests.
Will Class Notice include the same sample opt out request form provided on the Settlement Website?
5. Objections:
Class Members may object the Settlement, including requested award of attorneys’ fees, litigation costs, or enhancement. Objections must be submitted to Claims Administrator by mail or overnight delivery by courier. Objections may not be submitted by email or through the Settlement Website. Objection must provide: (1) Class Member’s name and contact information, and name and contact information of lawyer, if any; (2) brand of cookware and date of purchase; (3) statement of objection, including factual and legal grounds for the position; (4) any other documents Class Member wishes to submit in support of his/her position; and (5) Class Member’s signature.
If Class Member wishes to appear and be heard at the Final Approval hearing, he or she must indicate in the objection whether he or she intends to so appear. Any Class Member who does not indicate he or she intends to appear at the Final Approval hearing, or who has not filed a written objection, may be deemed to have waived any objections to the settlement and may be barred from speaking or otherwise presenting any views at the Final Approval hearing. [Settlement, ¶¶ 23, 25.]
Any Class Member who submits both an opt-out form and an objection will be deemed to have requested to opt out of the settlement. [Settlement, ¶ 23.]
Claims Administrator will provide all objections to Class and Defendants’ counsel. Class Counsel will file objections with the Court no later than 21 days prior to Final Approval hearing. [Settlement, ¶ 24.]
Preliminary Approval Order and Class Notice will require Class Members to submit objections to the Claims Administrator no later than the Objection Deadline. [Settlement, ¶ 27.] Preliminary Approval Order will provide that, absent good cause found by the Court, objections that are not timely or are otherwise not compliant may be deemed waived and not considered by the Court. [Settlement, ¶ 28.]
“Objection Deadline” is “the date agreed upon by the Parties, or otherwise ordered by the Court in the Preliminary Approval Order.” It shall be no later than 90 days after the date of the Preliminary Approval Order. [Settlement, ¶ 1.R.]
ISSUE: This procedure needs to be revised. The differing methods of submitting opt out requests and objections is confusing. The methods of submission of opt outs and objections should be consistent. Deadline for submission for objections should be tied to the date of mailing and remailing of Class Notice. If Class Member wishes to object in person at the Final Approval hearing, they should not be required to first submit a written objection to the Claims Administrator stating their intention to appear at the hearing. Also, objectors need only provide a concise statement of the reasons for the objection, not legal authority or the name of counsel. Settlement must also provide that the Court retains final authority as to consideration and admissibility of objections.
6. Disputes: Not applicable.
7. Attorneys’ Fees and Costs:
The Court has wide discretion on assessing the reasonableness of fees, including basing fees on the percentage of fund method, conducting a lodestar cross-check on a percentage fee, or foregoing a lodestar cross-check and using other means to evaluate the reasonableness of a requested percentage fee. (Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 506.)
Settlement states that Defendants will pay all expenses incurred in administering the settlement, including all attorneys’ fees and costs. Defendants will pay Class Counsel fees and expenses separate and apart from any relief provided to Settlement Class. [Settlement, ¶ 32.]
Court will determine the amount of Class Counsel fees and expenses to be paid to Class Counsel. After Court preliminarily approves the settlement, Class Counsel may submit a motion for attorneys’ fees and costs to the Court. [Id. at ¶ 33.] Parties have agreed that Defendants will not oppose Class Counsel’s motion for attorneys’ fees and costs, provided motion does not seek an award of more than $375,000.00. [Id. at ¶ 34.]
Defendants not responsible for any of Class Counsel’s attorneys’ fees and/or internal costs for the settlement, including, but not limited to, any investigative, expert, and/or actuarial costs. [Id. at ¶ 38.]
ISSUE: There are three attorneys at two law firms—Kazerouni Law Group, APC, and Assassi & Cruz Law Firm, PC—seeking appointment as Class Counsel. [Kazerounian Decl., ¶ 7; Ibey Decl., ¶ 9; Assassi Decl., ¶ 6.] None of the attorneys attest to the estimated amount of attorneys’ fees. Only Mr. Ibey attests that as of May 30, 2023, litigation costs are “over $21,000.” [Ibey Decl., ¶ 13.]
Neither the maximum total amount of attorneys’ fees nor the maximum total amount of litigation costs is provided in the Settlement. Only the combined maximum total of $375,000.00 is provided. However, since Defendants are paying attorneys’ fees and costs separate and apart from the monetary relief to the Settlement Class, and Class Counsel is going to file a motion for attorneys’ fees and costs, this should not be a problem.
At Final Approval, counsel must provide billing records and documentation of costs in support of their motion for attorneys’ fees and costs. In addition, Kazerouni Law Group and Assassi & Cruz Law Firm must disclose their fee-splitting arrangement, whether they have any other fee-splitting arrangement with any other counsel, or confirm none exists. (Barnes, Crosby, Fitzgerald & Zeman, LLP v. Ringler (2012) 212 Cal.App.4th 172, 184; CRC, Rule 3.769(b).)
8. Plaintiffs’ Enhancement:
Parties have agreed that Class Counsel will seek approval of enhancement payments to Class Representatives, not to exceed $2,000 for each Class Representative. Defendants will pay this amount separate and apart from any monetary relief provided to the Settlement Class. Defendants do not oppose enhancement payment up to and not exceeding $10,000 in the aggregate ($2,000 to each of five Class Representatives). [Settlement, ¶ 35.]
ISSUE: The Court will determine the appropriate amount of Plaintiffs’ enhancement at Final Approval. Although Plaintiffs have already submitted declarations, each of them should submit a declaration at Final Approval addressing the factors set forth in Golba v. Dick’s Sporting Goods, Inc. (2015) 238 Cal.App.4th 1251, 1272, and Clark v. Am. Residential Servs., LLC (2009) 175 Cal.App.4th 785, 804, including estimate of hours spent on this litigation.
9. Settlement Administration:
The parties have selected Angeion Group as the Claims Administrator. [Settlement, ¶ 1.C; see also, Declaration of Steven Weisbrot, Esq. (“Weisbrot Decl.”) (ROA 207).] Angeion appears to be qualified to act as Claims Administrator.
Angeion estimates that the approximate cost of settlement administration will be $185,000. [Weisbrot Decl., ¶ 48.] Estimate based on size of the class list for effectuating notice of the litigation and settlement, and corresponding assumptions of a 5% claims rate. [Id., ¶ 48, fn. 6.]
Defendants are to pay all expenses incurred in administering the Settlement, including the cost of the Class Notice and cost of distributing and administering the benefits of the Settlement. [Settlement, ¶ 32.]
10. Continuing Jurisdiction:
Settlement states the Court “may” retain jurisdiction to protect, preserve, and implement the Settlement, including the Release, and the Court “may” retain jurisdiction to enter any further orders necessary or appropriate in administering and implementing the terms of the Settlement. [Settlement, ¶ 31.E.]
ISSUE: Court’s continuing jurisdiction is mandatory. Settlement should replace “may” with “shall.” Settlement should also state that continuing jurisdiction is pursuant to CCP § 664.6 and CRC Rule 3.769(h).
11. Other Issues:
Claims Administrator will begin issuing monetary payments or vouchers within 30 days of Effective Date, and shall complete the process no later than 60 days after the Effective Date. [Settlement, ¶ 18.]
Settlement states that if submission of claim is deemed deficient, Class Member will receive email or letter from Claims Administrator within 14 days of determination, with a written explanation stating reason claim was deemed deficient and steps Class Member can take to cure. Class Member receiving deficiency notice will have 21 days to cure. If Class Member fails to cure, Claims Administrator will issue Notice of Claim Denial, which will be subject to meet and confer process described in Paragraph 2(C)(vii). [Settlement, ¶ 17.]
ISSUES RE CLASS NOTICE:
The proposed Class Notice is provided in three versions and are attached as Exhibits A, B, and C to the Settlement Agreement. (ROA 199).
Exhibit A is the detailed “long form” notice provided on the Settlement Website. Exhibit B is the “short form” notice to be sent by email to Class Members. Exhibit C is the “postcard” notice sent by U.S. Mail. [Settlement, ¶ 1.HH.]
Regarding the Class Notice, the Settlement states that it will be translated into Spanish on the Settlement Website. [Settlement, ¶ 19.A.] Settlement also states that Class Notice will advise Class Members of: (1) description of the nature of the Action, preliminary certification of the Settlement Class, the proposed Settlement, the claims released, availability of the Limited Lifetime Warranty, Class Counsel contact information, links to the Notice and other important case documents, and the URL to the Court’s Registrar of Actions; (2) information about exclusion/opt-out rights, including deadlines and procedures; (3) information about submitting objections to the settlement, including deadlines and procedures; (4) information about amount Class Counsel will seek in attorneys’ fees and costs, amount of enhancement payments to Class Representatives, amount Defendants will pay if Settlement is approved, and that payments will not reduce relief to Class Members; and (5) the Claim Form informing Class Members that he/she must complete and timely submit the Claim Form to be eligible to receive benefits of settlement. [Settlement, ¶ 19.B.]
There are a few issues with the Class Notice that should be addressed:
1. The Class Notice is to be revised consistent with the issues addressed above.
2. Since information about the Settlement will be provided in English and Spanish on the website, certified translations of the Class Notice should be included with the proposed Order.
3. The second bullet point on the long form notice states the “Settlement provides an opportunity to obtain significant monetary and non-monetary benefits.” The characterization of the monetary benefit as “significant” is misleading and should be removed.
4. Section 16 entitled “How will the lawyers be paid?” should not include information about enhancement payments to Class Representatives or payment of costs to administer the Settlement. Information regarding Class Representative enhancement payments and payment of settlement administration costs should be provided in separately titled sections.
5. Request for Exclusion Form should be included with Class Notice.
ISSUES RE PROPOSED ORDER
1. The proposed Order is to be revised consistent with the issues address above.
2. Paragraph X should include information about deadline to opt out or object.
3. The Settlement, Class Notices, Claim Form, and Exclusion Form should be attached to the proposed Order as exhibits. Certified Spanish translations of the Class Notices, Claim Form, and Exclusion Form should also be attached as exhibits.
4. The maximum amount of attorneys’ fees and costs should be stated in Paragraph XIV.
5. The parties should propose an actual date for Final Approval. The moving papers should be submitted at least 14 court days prior to the hearing, and any opposition and reply will be due per Code based on the hearing date.
6. Proposed Order should include requirement that Claims Administrator must provide a copy of its invoice with its declaration regarding administration of the Settlement.
RULING:
The hearing on the Motion for Preliminary Approval of Class Settlement and Certification of Settlement Class, and the Status Conference, are CONTINUED to October 6, 2023, at 1:30 p.m. in Department CX103 so that Plaintiffs may address the issues identified above.
Counsel are ORDERED to file supplemental papers addressing the Court’s concerns no later than fourteen (14) calendar days prior to the continued hearing date. Counsel are ORDERED to provide red-lined versions of all revised papers. Counsel are ORDERED to provide the Court with an explanation of how the pending issues were resolved, with precise citation to any corrections or revisions. A supplemental declaration or brief that simply asserts the issues have been resolved or does not clearly state a specific concern has been resolved, is insufficient and will be considered a violation of the Court’s Orders.
Clerk to give Notice.