Hohenberg v. Ferrero USA, Inc

Filing 125

RESPONSE re 124 Objection, 123 Objection, filed by Athena Hohenberg, Laura Rude-Barbato. (Attachments: # 1 Declaration of Jack Fitzgerald in Support of Plaintiffs' Response to Objections, # 2 Proof of Service)(Fitzgerald, John) (ag).

1 LAW OFFICES OF RONALD A. MARRON, APLC 2 RONALD A. MARRON (175650) 3 ron @consumersadvocates.com MAGGIE REALIN (263639) 4 maggie@consumersadvocates.com B. SKYE RESENDES (278511) 5 skye@consumersadvocates.com 3636 4th Avenue, Suite 202 6 San Diego, California 92103 (619) 696-9006 7 Telephone: Facsimile: (619) 564-6665 8 THE WESTON FIRM GREGORY S. WESTON (239944) greg@westonfirm.com JACK FITZGERALD (257370) jack@westonfirm.com MELANIE PERSINGER (275423) mel@westonfirm.com COURTLAND CREEKMORE (182018) courtland@westonfirm.com 1405 Morena Blvd. Suite 201 San Diego, CA 92110 Telephone: (619) 798-2006 Facsimile: (480) 247-4553 9 Class Counsel 10 11 12 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA Case No. 11-cv-00205 H KSC Pleading Type: Class Action 13 14 15 16 17 18 19 IN RE FERRERO LITIGATION PLAINTIFFS’ RESPONSE TO THE OBJECTION OF MICHAEL E. HALE AND THE PURPORTED OBJECTION OF COURTNEY DREY & ANDREA PRIDHAM Judge: The Honorable Marilyn L. Huff Hearing: July 9, 2012 Time: 10:30 a.m. Location: Courtroom 13 20 21 22 23 24 25 26 27 28 In re Ferrero Litigation, Case No. 3:11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 TABLE OF CONTENTS 2 3 TABLE OF AUTHORITIES ..................................................................................................................... ii 4 INTRODUCTION ..................................................................................................................................... 1 5 PLAINTIFFS’ RESPONSE TO THE HALE OBJECTION ..................................................................... 1 6 7 8 9 PLAINTIFFS’ RESPONSE TO THE PURPORTED DREY/PRIDHAM OBJECTION ......................... 2 I. RELEVANT FACTS ......................................................................................................... 2 II. DREY & PRIDHAM LACK STANDING TO OBJECT .................................................. 4 III. EVEN IF THE COURT WERE TO CONSIDER DREY & PRIDHAM’S OBJECTIONS, THEY LACK MERIT.............................................................................. 6 10 11 12 A. The Injunctive Relief ............................................................................................. 6 14 B. Adequacy ............................................................................................................... 8 15 C. Fees ...................................................................................................................... 12 13 16 CONCLUSION ........................................................................................................................................ 15 17 18 19 20 21 22 23 24 25 26 27 28 i In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 TABLE OF AUTHORITIES 2 Cases 3 Amador v. Logistics Express, Inc., 2011 U.S. Dist. LEXIS 97999 (C.D. Cal. 2010)................................................................................ 10 4 5 Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) ........................................................................................................................... 12 6 Guschausky v. Am. Family Life Assur. Co., 7 2012 U.S. Dist. LEXIS 46480 (D. Mont. Apr. 2, 2012) .................................................................... 12 8 Hall v. AT&T Mobility LLC, No. 07-cv-5325-JLL-ES, Dkt. No. 570 (D.N.J. July 22, 2010) ........................................................... 5 9 10 In re Bluetooth Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) ............................................................................................................. 12 11 12 In re Classmates.com Consol. Litig., No. 09-cv-45-RAJ, Dkt. No. 211, slip op. (W.D. Wash. June 15, 2012) ............................................ 6 13 14 In Re Equity Funding Corp. etc., 603 F.2d 1353 (9th Cir. 1979) ............................................................................................................. 4 15 In re HP Laser Printer Litig., 2011 U.S. Dist. LEXIS 98759 (C.D. Cal. Aug. 31, 2011) ................................................................. 12 16 17 In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010) ....................................................................................................... 12, 14 18 In re TD Ameritrade Account Holder Litig., 19 2011 U.S. Dist. LEXIS 103222 (N.D. Cal. Sept. 12, 2011) ............................................................ 2, 6 20 Kohler v. Chelsea San Diego Fin., LLC, 2010 U.S. Dist. LEXIS 144551 (S.D. Cal. Dec. 9, 2010).................................................................... 5 21 22 McDonough v. Toys “R” Us, Inc., 2011 U.S Dist. LEXIS 150851 (E.D. Pa. Dec. 20, 2011) .................................................................. 14 23 24 Silverman v. Motorola, Inc., 2012 U.S. Dist. LEXIS 63477 (N.D. Ill. May 7, 2012) ..................................................................... 14 25 26 Stavenjord v. Mont. State Fund, 146 P.3d 724 (Mont. 2006) ................................................................................................................ 12 27 Warth v. Seldin, 422 U.S. 490 (1975) ............................................................................................................................. 4 28 ii In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Weeks v. Kellogg Co., 2011 U.S. Dist. LEXIS 155472 (C.D. Cal. Nov. 23, 2011) ......................................................... 13, 14 2 3 Rules 4 Fed. R. Civ. P. 37 ....................................................................................................................................... 2 5 6 S.D. Cal. Civ. L.R. 5.4 ............................................................................................................................... 5 7 S.D. Cal. Civ. L.R. 7.1(h) .......................................................................................................................... 6 8 S.D. Cal. Civ. L.R. 83.3 ............................................................................................................................. 5 9 S.D. Cal. Civ. L.R. 83.4 ............................................................................................................................. 6 10 11 Other Authorities 12 CM/ECF Electronic Case Filing Administrative Policies and Procedures Manual for the Southern District of California § 2(f)(1) ............................................................................................... 5 13 CM/ECF Electronic Case Filing Administrative Policies and Procedures Manual for the 14 Southern District of California § 2(f)(2) ............................................................................................... 5 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 INTRODUCTION Over 58,000 Californians have made claims in this case 1 while there has been just one opt-out 2 3 and one cognizable objection (e.g., a less than 0.0034% combined opt-out and objection rate). With just 4 a few days left in the claims period, which ends on July 5, the Class’ reaction overwhelmingly favors 5 final approval. The conclusory assertions of objector Michael Hale (Dkt. No. 124) provide no salient 6 reason for denying the Class final settlement approval. 7 As for the purported objection of Courtney Drey and Andrea Pridham (Dkt. No. 123), it does 8 not comply with the Court’s Preliminary Approval Order or the Southern District of California’s Local 9 Rules and Electronic Case Filing Administrative Policies and Procedures Manual, and was filed in part 10 by two attorneys not authorized to practice law in this District. Accordingly, the purported objection is 11 not cognizable and should not be considered. Even if the Court were to consider Drey and Pridham’s 12 substantive objections, however, it should find that they lack merit. 13 PLAINTIFFS’ RESPONSE TO THE HALE OBJECTION 14 Mr. Hale objects to the Settlement on the basis that “the requirements of Fed. R. Civ. P. 23 15 cannot be met to maintain this case as a class action” because “[t]he different groups and claims are too 16 disparate and involve too many individualized issues to be maintained as a class.” Hale Obj. (Dkt. No. 17 124) at 1. After carefully considering extensive briefing, however, the Court determined that class 18 certification was appropriate before there was ever a settlement, in part because of the predominance of 19 common issues. See Dkt. No. 95 at 8-11. Mr. Hale’s conclusory assertion, which does not identify or 20 explain what are the supposed “different groups and claims” over which he complains, is insufficient to 21 overturn the Court’s decision. 22 Mr. Hale also objects that it is “unthinkable that the defendant would implement materially 23 different practice changes in California” than elsewhere. Hale Obj. at 1. The Court, however, is only 24 faced with determining the reasonableness, fairness and adequacy of the Settlement before it, covering 25 the certified California class; it is not responsible for ensuring Ferrero’s behavior with respect to 26 individuals not covered by the Settlement is reasonable, fair or adequate. Even if disparate remedies for 27 class and non-class members could form a legitimate objection, however, the injunctive relief Ferrero 28 1 See Fitzgerald Decl. ¶ 18. 1 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 has agreed to for both the California Class and the 49-State Class is identical. Mr. Hale also contends 2 “the practice changes are illusory and in the defendant[’]s best interest,” id., but provides no additional 3 facts or reasoning to support this conclusory assertion. 4 Finally, Mr. Hale requests that the Court “not approve the attorneys’ fees and expenses,” id., but 5 again provides no facts, analysis, or any reason the fee request is unfair or improper in any respect. 6 For these reasons, Mr. Hale’s objections should be overruled. See In re TD Ameritrade Account 7 Holder Litig., 2011 U.S. Dist. LEXIS 103222, at *31-40 (N.D. Cal. Sept. 12, 2011) (overruling terse, 8 conclusory, and/or unintelligible objections that provide “no substantive grounds for objecting”). 9 PLAINTIFFS’ RESPONSE TO THE PURPORTED DREY/PRIDHAM OBJECTION 10 I. RELEVANT FACTS 11 On Sunday, June 3, 2012, the parties’ counsel received a letter from attorney Mark T. Lavery 12 stating that he represented Courtney Drey, a class member in the Nutella California Class. Mr. Lavery 13 requested a “Rule 37 conference” 2 to discuss the footnote in Plaintiffs’ Final Approval Motion, which 14 explained that any Class Member could view the unredacted versions of Plaintiffs’ briefs by agreeing to 15 abide by the terms of the Protective Order entered in the action. See Fitzgerald Decl. ¶ 2 & Exs. 1-2. 16 On Monday, June 4, 2012, Ferrero’s counsel, Dale Bish, provided Mr. Lavery with the 17 Protective Order. Later that day, Mr. Lavery sent an email copying his co-counsel, Grenville Pridham, 18 who Mr. Lavery stated also represented Courtney Drey. Mr. Lavery’s email made no mention of 19 purported objector Andrea Pridham. 3 In his email, Mr. Bish explained that “[a]s soon as [Ferrero] 20 receive[s] signatures from you and Mr. Pridham, we will authorize plaintiffs’ counsel to send the 21 unredacted version of their May 25th filing.” See id. ¶¶ 3-4 & Ex. 1. 22 Mr. Lavery and Mr. Bish continued to exchange emails throughout the day on Monday, June 4. 23 During that exchange, Mr. Lavery stated that he and his co-counsel would “sign and fax the [Protective 24 Order] confirmation tomorrow morning and call [Mr. Bish] to discuss any issues after we get the sales 25 26 2 Rule 37, however, provides that “a party may move for an order compelling disclosure or discovery.” Fed. R. Civ. P. 37(a)(1) (emphasis added). Drey and Pridham are purported objectors, not parties. 27 28 3 Objector Pridham appears to be attorney Pridham’s wife. An internet search shows both Pridhams live at the same address in Orange, California. See Fitzgerald Decl. ¶ 4 n.1 & Ex. 3. 2 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 data.” However, Mr. Lavery apparently never signed or returned the Protective Order confirmation, as 2 Mr. Bish confirmed two days later. See id. ¶ 5 & Ex. 1. 3 A few hours after Mr. Bish confirmed on June 6 that Mr. Lavery and/or his client(s) had not 4 signed the Protective Order, Mr. Lavery called the Weston Firm’s offices. At the time, Mr. Weston and 5 Mr. Fitzgerald were in Los Angeles for a hearing. Weston Firm paralegal Allan Bradley took the call, 6 in which Mr. Lavery was borderline abusive. See id. ¶ 6. 7 After the hearing, Plaintiffs’ counsel Mr. Fitzgerald sent Mr. Lavery an email stating, “I 8 understand you called to speak to Greg or me today. I’m sorry we missed your call, we were in Los 9 Angeles for a hearing in another matter. If you’d like to speak, we are available after 11:00 a.m. PST 10 tomorrow.” Mr. Lavery never responded to the email, and did not finally call Mr. Fitzgerald until two 11 weeks later, on June 20. See id. ¶ 7 & Ex. 4. Mr. Lavery’s conversation with Mr. Bradley was only the 12 beginning of what would be a series of discourteous telephone calls by Mr. Lavery. See id. ¶¶ 6-13. 13 Two days later, on Friday, June 8, Mr. Lavery sent Mr. Bish an email stating that he could not 14 agree with the Protective Order, and that “[i]f you are willing to allow the filing of an unredacted 15 motion for final approval and an extension of the objection deadline, we may reach an accord, if not we 16 may have to file a motion with the Court.” 4 Mr. Bish responded that Mr. Lavery had “led me to believe 17 that you had agreed to the protective order (and had sent signatures [previously]),” and that he was sure 18 “Mr. Pridham has explained that the protective order entered by Judge Bencivengo in this case is in the 19 Southern District’s form and is not objectionable.” Mr. Bish noted that “[i]f you intend to file a motion 20 with the court, we will respond in due course.” Mr. Lavery responded with various demands for “proof” 21 that Ferrero’s sales data is confidential, and Mr. Bish responding that “[w]e will respond to your filed 22 objection.” See id. ¶ 9 & Ex. 1. 23 24 25 26 27 28 4 Drey and Pridham’s purported objection brief, in a footnote, moves the Court “to order the parties to file an unredacted motion and provide extension of the time to object.” It further advises that Drey and Pridham “may file a motion to lift the protective order.” Drey/Pridham Obj. at 15 n.2. This request runs contrary to the Court’s Order, made after due consideration of the competing interests, granting Plaintiffs’ application to file under seal the unredacted versions of her Final Approval Motion and Fee Application. See Dkt. No. 120. Drey and Pridham have no standing to seek reconsideration of that Order and, in any event, provide no persuasive reason for doing so. Further, Drey and Pridham neither agreed to sign the Protective Order, a minimal burden the parties required for members of the public to obtain the unredacted briefs, nor filed a motion to lift the protective order as they said they might. Accordingly, any objection Drey and Pridham have to the process has been equitably waived. 3 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 On Thursday, June 14, the Weston Firm’s office received another call from the same number 2 that had called on June 6 when Mr. Bradley took the call. Again, the caller did not identify himself, and 3 demanded to speak to Mr. Weston or Mr. Fitzgerald. When Weston Firm paralegal David Newberry 4 told him counsel was unavailable, he hung up on Mr. Newberry. See id. ¶ 10. Later that day, Mr. 5 Lavery called the offices of Plaintiffs’ counsel, Ronald A. Marron. Mr. Marron’s paralegal, Carlos 6 Sanchez, took the call, in which Mr. Lavery was again hostile and discourteous. See id. ¶ 11. 7 On June 20, Mr. Fitzgerald received a call from Mr. Lavery, which lasted about six minutes. 8 During the call, Mr. Lavery was again discourteous and threatening. Further, he promised to appeal the 9 objection to the Ninth Circuit, suggesting that he does not believe the objection is meritorious. See id. 10 ¶¶ 12-13. 11 Although Drey and Pridham are also apparently represented by attorneys Grenville Pridham and 12 Christopher V. Langone, Plaintiffs’ counsel have never spoken to or received any communications 13 from anyone other than Mr. Lavery, who appears to be spearheading the Drey/Pridham objection. In 14 any event, Messrs. Lavery, Pridham and Langone are so-called “professional objectors,” see id. ¶ 15, 15 and the Drey/Pridham objection does not assert that the objection is brought in good faith. 16 II. DREY & PRIDHAM LACK STANDING TO OBJECT 17 Fundamental to the right to object to a proposed class action settlement is the requirement that 18 any purported objector establish standing to do so. In Re Equity Funding Corp. etc., 603 F.2d 1353, 19 1361 (9th Cir. 1979) (citing Warth v. Seldin, 422 U.S. 490, 498-500 (1975)). In this case, the 20 Preliminary Approval Order and the Local Rules for the Southern District of California provide the 21 procedural framework within which a party must operate to demonstrate such standing. 22 The Court’s Preliminary Approval Order provides that “[n]o Class Member represented by an 23 attorney shall be deemed to have objected to the [Settlement] Agreement unless an objection signed by 24 the Class Member is also filed with the Court and served upon Class Counsel and Defense Counsel . . . 25 30 days before the Fairness Hearing.” Preliminary Approval Order, Dkt. No. 108 ¶ 7(b). Because 26 purported objectors Courtney Drey and Andrea Pridham have failed to serve and file a signed 27 objection, they cannot be deemed to have objected. 28 4 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Southern District of California Local Civil Rule 5.4(f) requires all filed documents “must” 2 comply with the provisions of the District’s CM/ECF Electronic Case Filing Administrative Policies 3 and Procedures Manual for the Southern District of California (APPM). S.D. Cal. Civ. L.R. 5.4(f). 4 While individuals registered to use the District’s ECF system may file documents using an electronic or 5 “slash” signature, APPM § 2(f)(1), where an “original document requires the signature of a non6 registered signatory,” as with the attestation required of Drey and Pridham under paragraph 7 of the 7 Preliminary Approval Order, “the filing party must scan and electronically file the original document.” 8 Id. § 2(f)(2) (emphasis added). Because Drey and Pridham submitted declarations using slash 9 signatures, see Dkt. Nos. 123-1 & 123-2, they have not filed and served “an objection signed by the 10 Class Member,” as required by the Preliminary Approval Order. See Kohler v. Chelsea San Diego Fin., 11 LLC, 2010 U.S. Dist. LEXIS 144551, at *11-12 (S.D. Cal. Dec. 9, 2010) (finding declaration slash12 signed by non-registered user “unauthenticated and therefore inadmissible” pursuant to S.D. Cal. Civ. 13 L.R. 5.4(f) and APPM § 2(f)(2), and sustaining objection to same). 14 Although this deficiency is somewhat technical, there are good reasons here to enforce the 15 Local Rules and Electronic Case Filing Administrative Policies and Procedures. Drey and Pridham’s 16 attorneys, Mssrs. Lavery, Langone, and Pridham, are so-called “professional objectors.” See Fitzgerald 17 Decl. ¶ 15. As described above, the Drey/Pridham objection seems to be primarily the work of Mr. 18 Lavery, who—along with Mr. Langone—has appeared before the Court in an unauthorized manner in 19 violation of the S.D. Cal. Civ. L.R. 83.3(b) and (c) (“only a member of the bar of this court will 20 practice in this court”). Neither Mr. Lavery nor Mr. Langone are admitted to the California Bar, nor this 21 Court. Yet, despite appearing on behalf of Drey and Pridham, see Drey/Pridham Obj. at 15, neither Mr. 22 Lavery nor Mr. Langone has sought admission pro hac vice. 5 Such unauthorized practice is 23 sanctionable by an “appropriate penalty . . . [to be] credit[ed] to the court library or pro bono fund . . . .” 24 S.D. Cal. Civ. L.R. 83.3(i). Accord In re Classmates.com Consol. Litig., No. 09-cv-45-RAJ, Dkt. No. 25 26 5 That Lavery and Langone have engaged in the unauthorized practice of law in this District is especially troubling in light their previously having been admonished for the unauthorized practice of 27 law—and all their arguments made at a Final Approval Hearing accordingly stricken—in the matter of 28 Hall v. AT&T Mobility LLC, No. 07-cv-5325-JLL-ES, Dkt. No. 570 (D.N.J. July 22, 2010). See Fitzgerald Decl. Ex. 6. 5 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 211, slip op. at 5-6 (W.D. Wash. June 15, 2012) (“Mr. Chalmers sought to represent the objectors in 2 court without complying with this District’s rules for pro hac vice admission. The court declined to 3 make an exception to the pro hac vice rules. Mr. Chalmers unsuccessfully petitioned the Ninth Circuit 4 for mandamus relief.”). 5 Given this unauthorized practice of law (and Messrs. Lavery and Lagone’s presumable 6 concomitant failure to review the Local Rules and requirements), it is unsurprising that the objection 7 does not comply with the Local Rules and Electronic Case Filing Administrative Policies and 8 Procedures, that the objection brief violates the Local Rules, 6 and that Mr. Lavery’s telephone calls 9 have run afoul of Local Rule 83.4, requiring professionalism in the conduct of litigation. See S.D. Cal. 10 Civ. L.R. 83.4. 11 Professional objectors Messrs. Lavery, Langone and Pridham should not be rewarded for their 12 unauthorized practice of law, violations of the Local Rules, and the non-compliant purported 13 Drey/Pridham objection. Rather the Court should, respectfully, enforce the Local Rules and procedures 14 in light of the Drey/Pridham group’s repeated disregard for them and, accordingly, rule that Drey and 15 Pridham are not proper objectors. 7 Accord TD Ameritrade, 2011 U.S. Dist. LEXIS 103222, at *30 16 (declining to consider Blum objection that did not comply with requirements for objections “properly 17 before the Court”). 18 III. EVEN IF THE COURT WERE TO CONSIDER DREY & PRIDHAM’S OBJECTIONS, 19 THEY LACK MERIT 20 A. 21 The “main reason” Drey and Pridham believe the Court should reject the Settlement is that it The Injunctive Relief 22 purportedly “seeks federal judicial approval for Ferrero’s Nutella ‘balanced breakfast’ marketing 23 24 6 The fifteen-page brief does not contain the required Table of Contents or Table of Authorities as required by S.D. Cal. Civ. L.R. 7.1(h) for briefs over ten pages. 25 7 Drey and Pridham are the only purported objectors who state an intention to appear at the Final 26 Approval Hearing, but they have no standing to appear. See Preliminary Approval Order, Dkt. No. 108 ¶ 7(d) (“Any Class Member who does not timely file and serve an objection containing the information 27 set forth above . . . shall not be permitted to appear at the Fairness hearing except for good cause 28 shown”). Accordingly, the Court has the discretion to vacate the hearing and decide the final approval motion and fee application on the papers. See S.D. Cal. Civ. L.R. 7.1(d)(1). 6 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 campaign.” Drey/Pridham Obj. at 2. Not so. This objection miscomprehends the terms of the 2 Settlement Agreement, whose only requirement is that Ferrero not use the slogan challenged in this 3 action, “An example of a tasty yet balanced breakfast.” See Final Approval Mot., Dkt. No. 114-1 at 7 4 (citing Settlement Agreement ¶ 40B). 5 Although the Settlement Agreement states that Ferrero currently intends to replace that slogan 6 with “Turn a balanced breakfast into a tasty one,” (the “Revised Statement”) the Court is not being 7 asked to sanction the Revised Statement as lawful; rather, approving the Settlement would only enjoin 8 Ferrero from using the slogan challenged in this case. Unsurprisingly, the Settlement Agreement does 9 not purport to release future claims concerning a labeling statement that has never been used and was 10 not at issue. Instead, the “Released Claims” are only those “arising out of or relating to the allegations 11 in the Complaint or Defendant’s marketing and advertising of Nutella at issue in the Complaint and 12 prior to the Effective Date of this Settlement . . . .” Settlement Agreement ¶ 21(AA). Thus, Drey and 13 Pridham utterly mischaracterize the Settlement as providing a “marketing get-out-of-jail free golden 14 ticket.” Drey/Pridham Obj. at 6 (citation omitted). 15 Tellingly, the Settlement Agreement does not require Ferrero to use the Revised Statement at 16 all. Rather, “[n]othing [in the Settlement Agreement] limit[s] Ferrero’s ability to use additional 17 characterizing language or imaging on the label,” and “Ferrero retains the right to remove . . . the 18 Revised Statement from the Nutella label altogether.” Settlement Agreement ¶¶ 40B(1)-(2). Thus, 19 while the Settlement Agreement states, essentially for information purposes, how Ferrero currently 20 intends to modify the Nutella label slogan, this would not preclude any consumer who in the future was 21 misled by the new slogan, from challenging it in a future suit. 22 Even setting this aside, there is nothing misleading about the Revised Statement. Although the 23 Canadian Professor that Mr. Lavery solicited, 8 Dr. Yoni Freedhoff, opines that the Revised Statement 24 “implies . . . that adding Nutella to a balanced breakfast would still leave that breakfast ‘balanced’,” 25 Freedhoff Decl., Dkt. No. 123-3 at 1, this interpretation is contradicted by the plain language of the 26 Revised Statement, which actually states that a “balanced breakfast” is “turn[ed]” into a “tasty” one 27 instead. 28 8 Merriam-Webster defines “turn” as “to exchange for something See Dkt. No. 123-4 at 1. 7 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT else.” 1 See http://www.merriam-webster.com/dictionary/turn. Indeed, Drey and Pridham use the same 2 terminology in making their misguided argument, when they assert that “Nutella actually turns a 3 balanced breakfast into an unbalanced breakfast.” Drey/Pridham Obj. at 3 (emphasis added). This is the 4 same message the Revised Statement conveys. 5 Moreover, Drey and Pridham focus exclusively on a single aspect of the Settlement’s injunctive 6 relief, ignoring the additional significant changes that Ferrero will make to Nutella’s marketing 7 including (1) displaying on Nutella’s principle display panel (e.g., front label) a “Nutrition Keys” 8 graphic prominently indicating Nutella’s calories, saturated fat, sodium and sugar content; (2) ceasing 9 use of the challenged television commercials (and replacing them with new commercials vetted by 10 Class Counsel); and (3) revising the Nutella website to remove any content generated by or attributed to 11 Nutella’s former spokesperson, a purported children’s nutrition expert, who Ferrero will no longer use 12 in marketing Nutella. Similarly, Drey and Pridham ignore the Class’s monetary relief, e.g., the common 13 fund from which Class Members may obtain reimbursement for up to five jars of Nutella. Their limited 14 and unfounded criticism of a single prong of the broad Settlement Agreement provides no grounds for 15 denying final approval. 16 Finally, in attacking this single prong of the Settlement Agreement’s injunctive relief, Drey and 17 Pridham ignore the procedural posture of this case, which settled only after months of negotiations and 18 two Settlement Conferences before the Honorable Cathy Ann Bencivengo. In addition, the parties only 19 settled after the Court certified the Class following substantial discovery. Under such circumstances, 20 there is a strong presumption that the Settlement’s terms are reasonable, fair and adequate. 21 B. 22 Alternatively, Drey and Pridham question the adequacy of the Class Representatives and Class Adequacy 23 Counsel, arguing that “the fairness of a settlement agreement cannot itself bootstrap a finding of 24 adequacy . . . .” Drey/Pridham Obj. at 7 (citation omitted). Again, this ignores the procedural posture of 25 this case, because the Court determined Plaintiffs are adequate Class Representatives, and their counsel 26 adequate Class Counsel, well before a Settlement was reached. See Dkt. No. 95 at 7. There is, therefore, 27 no danger that the adequacy requirement is satisfied only to the extent the issue is “bootstrapped” to the 28 Settlement itself. 8 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Perhaps recognizing this, Drey and Pridham argue that “the issue of adequacy has received little 2 attention in this case.” Drey/Pridham Obj. at 7. This is nonsense. In support of Plaintiffs’ motion to 3 appoint their counsel Interim Class Counsel, Class Counsel submitted the detailed declarations of Mr. 4 Marron, Mr. Weston and Mr. Fitzgerald. See Dkt. Nos. 8-2, 8-3 & 8-4. Relying on the information 5 provided, the Court found that “[e]ach proposed class counsel appears to be well qualified to represent 6 the interests of the purported class and to manage this litigation.” Dkt. No. 11 at 4 (citing Dkt. No. 8-1 7 at 6-8). When Plaintiffs moved for class certification, they again provided detailed declarations of their 8 counsel demonstrating their adequacy. See Dkt. Nos. 51-2, 51-4, 51-5. After again considering their 9 showing, in certifying the class, the Court affirmed that “Plaintiffs and their counsel would adequately 10 represent the putative class.” Dkt. No. 95 at 7. Drey and Pridham’s contention that Ferrero “did not 11 address the adequacy of the class representatives” on certification, is misplaced, demonstrating only 12 that Ferrero had no grounds to do so. Ferrero vigorously opposed class certification. Had it uncovered 13 any reason to believe Plaintiffs were inadequate, it certainly would have raised the argument. 14 Drey and Pridham nevertheless contend that Class Counsel are inadequate because the 15 purported objectors believe that the Rude-Barbato action was filed “in order to ‘manufacture’ an 16 appearance of competing class actions that would justify a motion for interim appointment of Class 17 Counsel.” Drey/Pridham Obj. at 7. Drey and Pridham’s argument, however, is threadbare speculation 18 contradicted by the facts and unsupported by the deposition testimony they cite. 19 Plaintiff Athena Hohenberg hired attorney Ronald Marron to represent her in an action against 20 Ferrero, which was filed on February 1, 2011 following investigation and the drafting of the Complaint, 21 which took not a lot, but some time—Rome was not built in a day. Ms. Hohenberg and Ms. Laura 22 Rude-Barbato live in the same small San Diego community of Imperial Beach. As Ms. Rude-Barbato 23 testified, at around the same time Ms. Hohenberg filed her action on February 1, she learned of the 24 lawsuit and approached Mr. Marron about possibly being involved. Rude-Barbato Decl., Dkt. No. 11425 6 ¶¶ 2-3. Mr. Marron advised Ms. Rude-Barbato that he intended to work with the Weston Firm and 26 obtained her authorization to do so. After investigating her claims and drafting a Complaint on Ms. 27 Rude-Barbato’s behalf based on the Hohenberg Complaint, the Weston Firm filed the action on 28 February 4, 2011. 9 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Nothing in Ms. Rude-Barbato’s deposition testimony on which Drey and Pridham rely is 2 contrary. See Drey/Pridham Obj. at 8-9. At the time of her deposition, Mr. Rude-Barbato had not met 3 Mr. Weston or Mr. Fitzgerald, and had not hired the Weston Firm directly. Rather, in hiring Mr. 4 Marron, Ms. Rude-Barbato authorized Mr. Marron to associate with other counsel to assist with 5 representing her. See Fitzgerald Decl. ¶ 16. Before retaining Mr. Marron, Mr. Weston and Mr. 6 Fitzgerald were involved in pre-filing communications with Ms. Rude-Barbato, who was advised that 7 the Weston Firm would be assisting in the matter. See id. ¶ 17. Thus, there is no question the Weston 8 Firm was fully authorized to file the Rude-Barbato Complaint, and that Ms. Rude-Barbato was aware of 9 and authorized the Weston Firm’s participation in her lawsuit. 10 Drey and Pridham’s primary complaint seems to be that Ms. Rude-Barbato’s action was filed 11 separately, rather than jointly with Ms. Hohenberg. This occurred, however, because the Hohenberg 12 action was fully prepared for filing, and actually filed, on February 1, several days before Class 13 Counsel had sufficient time to investigate Ms. Rude-Barbato’s claims and draft allegations specific to 14 her. Indeed, Ms. Rude-Barbato did not approach Mr. Marron until approximately the time the 15 Hohenberg Complaint was filed, nor retain Mr. Marron until several days later, on February 4 (not 16 January 2011, as Drey and Pridham speculate, see Drey/Pridham Obj. at 10). See Fitzgerald Decl. ¶ 16. 17 Drey and Pridham have cited no authority for their assertion that Ms. Hohenberg was obligated 18 to delay her filing because of the possibility that another person might later come forward with similar 19 claims. Further, Drey and Pridham have failed to establish that there is anything wrongful in two 20 separate litigants represented by the same counsel filing actions separately rather than jointly. Similarly, 21 Drey and Pridham have failed to establish that all counsel representing a litigant must appear on her 22 behalf upon the filing of her Complaint. 23 Nor did this especially influence the motion for consolidation and appointment of interim class 24 counsel. Even if Mr. Marron had been listed on the Rude-Barbato Complaint along with the Weston 25 Firm, consolidation and the appointment of interim class counsel would still have been appropriate. See 26 Dkt. No. 11 at 4 (“The appointment of interim class counsel is appropriate here, as there are multiple 27 class actions that are being consolidated into a single action.” (citing Amador v. Logistics Express, Inc., 28 2011 U.S. Dist. LEXIS 97999 (C.D. Cal. 2010)). 10 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Drey and Pridham complain that this procedural posture “creates duplicative work which leads 2 to an unreasonable lodestar,” but this is entirely conclusory. In actuality, Class Counsel only expended 3 a few additional hours drafting Ms. Rude-Barbato’s Complaint, which would have been expended 4 regardless of whether it was filed separately, or the Hohenberg filing delayed to include Ms. Rude5 Barbato’s allegations. Moreover, while Drey and Pridham complain about the filing of a consolidated 6 complaint following consolidation, Drey/Pridham Obj. at 10, the Consolidated Complaint was filed just 7 one day after the Court’s Order consolidating the cases (see Dkt. Nos. 11, 14) and involved little more 8 than merging allegations. Thus Drey and Pridham’s assertion of significant duplication of work is 9 unfounded. 10 Finally, Drey and Pridham have not shown any harm to the Class from the separate Hohenberg 11 and Rude-Barbato filings. To the contrary, Class Counsel’s interim appointment turned out to be crucial 12 in protecting the California Class’s interests against the efforts of New Jersey counsel to abscond with 13 the case, which ultimately allowed Class Counsel in this case to negotiate a far better settlement for the 14 California Class than the one New Jersey counsel negotiated for the 49-State Class. See Fee Mot., Dkt. 15 No. 114-2 at 14-15. For example, after this court appointed Interim Class Counsel over the putative 16 (then) nationwide class, New Jersey counsel convinced the New Jersey court to also appoint it Interim 17 Class Counsel over the same asserted nationwide class, and purportedly granted New Jersey counsel 18 “sole authority” to conduct settlement negotiations on the class’s behalf. Class Counsel argued that this 19 order should be vacated as violating principles of comity and trampling on this Court’s prior Interim 20 Counsel appointment, since Ferrero would theoretically be in contempt of the New Jersey court’s order 21 if it discussed settlement with Class Counsel. Ferrero took the position that “Ferrero, as a responsible 22 litigant, is prepared to talk with counsel in each case . . . [and] may discuss settlement on behalf of the 23 putative class with either (or both) sets of plaintiffs’ counsel.” See Glover, No. 11-cv-1086 (D.N.J.) 24 Dkt. No. 47 at 3. Thus, it was only because Class Counsel were appointed Interim Class Counsel that 25 Ferrero was compelled to discuss settlement of the California Class, and ultimately agreed to settle the 26 California action on more favorable terms. This was certainly in the California Class’s interests. 27 28 11 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 C. 2 Finally, Drey and Pridham object to Plaintiffs’ fee application on the grounds that the fees are Fees 3 supposedly excessive and that the motion does not comply with Rule 23(h). Neither objection is 4 availing. 5 Addressing Drey and Pridham’s first argument, their sole focus on the percentage-of-recovery 6 method is misplaced since, “courts have discretion to employ either the lodestar or the percentage-of7 recovery method.” In re Bluetooth Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir. 2011) (citing In re 8 Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010)). Plaintiffs provided a detailed 9 analysis why the lodestar method—which provides a “presumptively reasonable” fee, see Bluetooth, 10 654 F.3d at 941—must be applied in this case in order to achieve a “reasonable result.” See Fee Appl., 11 Dkt. No. 114-2 at 7-8; Bluetooth, 654 F.3d at 942. Accord In re HP Laser Printer Litig., 2011 U.S. 12 Dist. LEXIS 98759, at *15 (C.D. Cal. Aug. 31, 2011) (“Here, because the primary benefit to the class is 13 injunctive relief, the Court finds it appropriate to base the attorney fees on a lodestar calculation rather 14 than any sort of common fund calculation.”); Guschausky v. Am. Family Life Assur. Co., 2012 U.S. 15 Dist. LEXIS 46480, at *9-10 (D. Mont. Apr. 2, 2012) (noting that where a settlement produces a 16 common fund, the percentage-of-recovery method, rather than lodestar, should only be applied where 17 “(1) the classes of persons benefitted by the lawsuits are small in number and easily identifiable; (2) 18 benefits can be traced with some accuracy; and (3) the court has confidence the costs of litigation can 19 indeed be shifted to those benefitting.” (quoting Stavenjord v. Mont. State Fund, 146 P.3d 724, 730 20 (Mont. 2006) (citing Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)))). Drey and Pridham do not 21 challenge this analysis, but simply assume, incorrectly, that the common fund method should 22 categorically apply. 9 23 24 25 26 27 28 9 Drey and Pridham rely heavily on the Ninth Circuit’s decision in Bluetooth, but it is doubtful whether Bluetooth even applies here, since the settlement was reached only after a class was certified. See Bluetooth, 654 F.3d at 939, 946 (noting that settlement occurred “before any motion was made to certify a class for merits purposes” and stating that “[p]rior to class certification, there is an even greater potential for a breach of fiduciary duty owed the class during settlement[, and] [a]ccordingly, such agreements must withstand an even higher level of scrutiny . . . .”). See also Ferrington v. McAfee, Inc., 2012 U.S. Dist. LEXIS 49160, at *24-25 (N.D. Cal. Apr. 6, 2012) (citing, inter alia, Bluetooth for proposition that, “[w]hen the class settlement precedes formal, adversarial class certification,” a “higher” standard applies (citations omitted, emphasis added)); Amunrud v. Sprint Communs. Co. L.P., 12 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 Drey and Pridham also argue that the fee application violated Rule 23(h) because it was not 2 “directed to class members in a reasonable manner.” Drey/Pridham Obj. at 13. Their reliance on 3 Mercury Interactive, however, is misplaced. As Drey and Pridham note, the Ninth Circuit in that case 4 found that class members were deprived of the opportunity to object because the fee motion was filed 5 after the deadline for filing objections had expired. See Drey/Pridham Obj. at 13 (citing Mercury 6 Interactive, 618 F.3d at 993-94). That was not the case here. Rather, Plaintiffs were required to file 7 their fee application “no later than 45 days before the Fairness Hearing,” Preliminary Approval Order, 8 Dkt. No. 108 ¶ 11, with objections due “30 days before the Fairness Hearing,” id. ¶ 7(a). Thus, Class 9 Members had 15 days to object, which well exceeds the time period deemed sufficient by sister federal 10 district courts considering the requirements of Mercury Interactive. See, e.g., Weeks v. Kellogg Co., 11 2011 U.S. Dist. LEXIS 155472, at *79-83 (C.D. Cal. Nov. 23, 2011) (distinguishing Mercury 12 Interactive and overruling objection that “counsel’s fee application did not provide adequate 13 opportunity for class members to object,” where “objectors had a week to review the fee application 14 and motion for settlement approval and file objections,” which “afforded ample opportunity for them to 15 consider and lodge objections to the settlement terms,” and further noting that “[o]ther courts have set 16 schedules similar to the one issued by this court” (collecting cases, citations omitted)). 17 Drey and Pridham complain that the fee application was available on PACER so that “most 18 class members cannot easily” access it and “even if they could, downloading the motion is cost19 prohibitive relative to the recovery.” Drey/Pridham Obj. at 13.10 This objection is misplaced for three 20 21 2012 U.S. Dist. LEXIS 17258, at *7-8 (D. Mont. Feb. 10, 2012) (noting that Bluetooth applies only before class certification); Trombley v. Bank of Am. Corp., 2012 U.S. Dist. LEXIS 63072, at *10 22 (D.R.I. May 3, 2012) (citing Bluetooth for the proposition that “[w]hen a settlement is reached before 23 the class is certified, the settlement agreement is subject to heightened scrutiny for fairness” (citations omitted, emphasis added)). 24 10 Drey and Pridham assert that downloading the fee application would cost a class member $15.60. Id. 25 This is false; the fee motion (Dkt. No. 114-2) and supporting papers (Dkt. Nos. 114-3 & 114-4) would cost only $8.70 to download on PACER ($3 for the motion and Marron declaration, and $2.70 for the 26 Fitzgerald Declaration). Rather, this figure appears to relate to the New Jersey fee application, as this portion of the Drey/Pridham Objection is duplicated verbatim from the objection that Drey/Pridham 27 attorney Mr. Langone lodged in the New Jersey action. See Glover Dkt. No. 76 at 9. More importantly, 28 while Drey and Pridham compare the nominal cost of downloading the application to the maximum recovery of $20, they provide no authority that this is a meaningful comparison, nor even explain its 13 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 reasons. First, “the only clear requirement In re Mercury imposes is that class counsel file their 2 application for attorneys’ fees, costs and incentive awards before the deadline for filing objections.” 3 Weeks, 2011 U.S. Dist. LEXIS 155472, at *82 (citing In re Mercury, 618 F.3d at 994). Indeed, “the fact 4 that objectors were able to review the fee application and prepare rather lengthy objections to the the 5 settlement and fee request indicates that they had sufficient time to respond.” Id. See also Silverman v. 6 Motorola, Inc., 2012 U.S. Dist. LEXIS 63477, at *8 (N.D. Ill. May 7, 2012) ( 7 8 9 10 Unlike in Mercury Interactive, class members in this case were provided with an ‘adequate opportunity to object to the motion itself,’ which was filed two weeks before the objection deadline. Indeed, although he argues that class members were not afforded an adequate opportunity to objection, [Objector] himself timely objected to the motion. (internal citation omitted)). Second, the fee application is a publicly-filed and publicly-available document that may be 11 obtained from PACER, but also by contacting the Clerk of the Court. It would be a strange result, 12 indeed, if the law provided that publicly filing litigation documents was insufficient to make them 13 publicly available. Similarly, both the Class Notice and Settlement Website provided multiple means to 14 the contact settlement administrator to obtain the fee application. Under a header “How Can I Obtain 15 More Information,” the Notice stated “Class Members can ask questions . . . and review documents 16 concerning the case” by calling a toll free number or making a request in writing. See Young Aff., Dkt. 17 No. 114-7. Over 1,200 Class Members availed themselves of this opportunity, and over 1 million 18 individuals visited the Settlement Website. Any request by a Class member for a free copy of the fee 19 motion would have been promptly satisfied. 20 Third, the final approval motion and fee application were posted by a third party on the internet 21 soon after being filed, and thus could be easily accessed without paying PACER charges. See 22 Fitzgerald Decl. ¶ 19. 23 Therefore, Drey and Pridham’s objection that the fee application was not reasonably disclosed 24 to the public and Class Members is unavailing, and should be overruled. Other courts have overruled 25 similar objections. See, e.g., McDonough v. Toys “R” Us, Inc., 2011 U.S Dist. LEXIS 150851, at *6926 71 (E.D. Pa. Dec. 20, 2011). 27 28 relevance. Moreover, successful objectors are typically entitled to costs and reasonable fees, presumably including this $8 PACER charge. Drey and Pridham’s objection is, therefore, disingenuous. 14 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT 1 2 CONCLUSION For the foregoing reasons, the Court should overrule the objections of Michael Hale and hold 3 purported objectors Courtney Drey and Andrea Pridham lack standing and are not entitled to appear at 4 the Fairness Hearing. Even if the Court considers Drey and Pridham’s substantive objections, however, 5 it should overrule them for the reasons discussed herein. Accordingly, the Court should, respectfully, 6 grant final approval to the Settlement Agreement and grant Plaintiffs’ application for fees, costs and 7 incentive awards. 8 9 DATED: July 2, 2012 10 11 12 13 14 15 16 17 Respectfully Submitted, /s/ Jack Fitzgerald Jack Fitzgerald THE WESTON FIRM GREGORY S. WESTON JACK FITZGERALD MELANIE PERSINGER COURTLAND CREEKMORE 1405 Morena Blvd., Suite 201 San Diego, CA 92109 Telephone: (619) 798-2006 Facsimile: (480) 247-4553 22 LAW OFFICES OF RONALD A. MARRON, APLC RONALD A. MARRON MAGGIE REALIN B. SKYE RESENDES 3636 4th Street, Suite 202 San Diego, CA 92103 Telephone: (619) 696-9006 Facsimile: (619) 564-6665 23 Class Counsel 18 19 20 21 24 25 26 27 28 15 In re Ferrero Litigation, Case No. 11-CV-00205-H-KSC PLAINTIFFS’ RESPONSE TO OBJECTIONS TO FINAL APPROVAL OF SETTLEMENT