Hale v. Manna Pro Products, LLC

Filing 66

ORDER signed by Chief District Judge Kimberly J. Mueller on 1/15/2021, CONTINUING The MOTION HEARING re Motion for Final Approval to 5/28/2021 at 10:00 AM in Courtroom 3 (KJM) before Chief District Judge Kimberly J. Mueller.(Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Ashley Hale individually, and on behalf of
other members of the general public similarly
situated,

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ORDER

Plaintiffs,

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No. 2:18-cv-00209-KJM-DB

v.
Manna Pro Products, LLC; DOES 1-10,
Inclusive,

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Defendants.

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On July 6, 2020, the undersigned granted preliminary class certification and settlement

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approval. Order, July 6, 2020, ECF No. 58. On October 15, 2020, the parties stipulated to an

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amendment of the court’s order to allow notice by publication. Stipulation, ECF No. 59. The

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court twice deferred its decision: First, because parties did not address how the unclaimed

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residual funds would be distributed. Order, Nov. 3, 2020, ECF No. 60. Second, because the

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parties did not explain how the cy pres charity, Public Justice, was an appropriate beneficiary.

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Order, Dec. 8, 2020, ECF No. 62. Having reviewed the stipulation and supporting materials

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addressing these concerns, Stipulation, ECF No. 59; Joint Response, ECF No. 61; Response,

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ECF No. 63; Stipulation, ECF No. 64, the court grants the parties’ stipulation contingent on the

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parties providing additional support for their proposed cy pres distribution prior to the final

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approval hearing, as explained below.

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The court amends its preliminary approval order to approve the parties’ notice by

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publication plan, as described in Exhibit A to the parties’ joint stipulation. Decl. Sutherland,

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Ex. A, ECF No. 64. The court amends its Notice Schedule as set forth in the preliminary

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approval order, Order at 24, ECF No. 58, directing that all relevant deadlines should run from the

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date of the entry of this order.

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As noted, the parties have designated a charitable organization to receive any residual
funds that are not distributed through the class action settlement. The cy pres doctrine allows the

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distribution of unclaimed funds to indirectly benefit the entire class. Six Mexican Workers v.

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Ariz. Citrus Growers, 904 F.2d 1301, 1305 (9th Cir.1990). The cy pres award must qualify as

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“the next best distribution” to giving the funds directly to the class members. Dennis v. Kellogg

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Co., 697 F.3d 858, 865 (9th Cir.2012). “[T]he cy pres remedy must account for the nature of the

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plaintiffs’ lawsuit, the objectives of the underlying statutes, and the interests of the silent class

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members. . . .” Lane v. Facebook, Inc., 696 F.3d 811, 821 (9th Cir. 2012) (internal quotations

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omitted) (citation omitted). A court abuses its discretion if it approves a cy pres distribution

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where there is “no reasonable certainty” that any class member would benefit from it. Dennis,

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697 F.3d at 865 (quoting Six Mexican Workers, 904 F.2d at 1308).

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The parties propose specifically that any remaining funds be distributed to Public Justice.

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This consumer protection suit was brought by “a California consumer, representing a class of

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California consumers,” Response at 6, ECF No. 63, alleging violations of (1) unfair and unlawful

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business practices in violation of California’s unfair competition law (“UCL”), Cal. Bus. & Prof.

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Code § 17200, et seq., (2) fraudulent business practices in violation of the UCL, and (3) violation

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of California’s false advertising law (“FAL”), Cal. Bus. & Prof. Code § 17500, et seq. Sec. Am.

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Compl. ¶¶ 56–94, ECF No. 23. “The UCL is designed to preserve fair competition among

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business competitors and protect the public from nefarious and unscrupulous business practices,”

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Wells v. One2One Learning Found., 10 Cal.Rptr.3d 456, 463–64 (2004), rev’d in part on other

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grounds, 39 Cal.4th 1164 (2006). The parties insist a distribution to Public Justice is appropriate
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because the organization “litigates against companies nationwide, to seek compensation for

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victims of corporations that are violating consumer protection laws that are in place for the

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purpose of keeping consumers safe.” Response at 6, ECF No. 63.

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Other courts have found Public Justice to be an appropriate cy pres recipient in cases

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involving similar UCL violations where the parties provided assurance the funds would be used

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for the benefit of class members. Maxin v. RHG & Co., Inc., No. 16-2625, 2019 WL 4295325,

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at *3 (S.D. Cal. June 24, 2019) (“Public Justice Foundation ‘will use the [proposed cy pres]

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award to further the underlying goals of this matter, directly and indirectly benefiting the class

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members and similarly situated persons’ by ‘advanc[ing] the rights of consumers throughout the

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country to be free of deceptive and unfair practices and . . . enforc[ing] consumers rights and

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consumer protection laws.’”) (citing Bland Decl., ECF No. 30-2); Couser v. Comenity Bank,

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No. 12-2484, 2017 WL 2312080, at *3 (S.D. Cal. May 26, 2017) (“The executive director . . .

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declares under penalty of perjury that cy pres funds will be used ‘to further [the organizations’]

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consumer protection advocacy and education efforts nationwide.’”) (citing Bland Decl. ¶ 9,

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ECF No. 96-5). The parties here have provided no such assurance. As Public Justice is a

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national organization that works in a variety of practice areas that have no connection to the

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underlying suit or the plaintiff’s interest, see Public Justice, What We Do,1 without such

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assurance the court cannot ascertain whether there is any “reasonable certainty” that any class

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member would benefit from the distribution. Dennis, 697 F.3d at 865. As this deficiency could

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be cured easily, the court grants the parties’ stipulation contingent on the parties providing the

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court with a declaration from Public Justice assuring the funds will be used to advance the rights

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of the plaintiffs. The declaration should be provided by the time of the hearing on final approval

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confirmed below for a new date.

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The court continues the hearing date for the Motion for Final Approval to May 28, 2021

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at 10:00 a.m.

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https://www.publicjustice.net/what-we-do/ (accessed Jan. 11, 2021).
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This order resolves ECF Nos. 58 and 64.

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IT IS SO ORDERED.

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DATED: January 15, 2021.

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