Fishon v. Premier Nutrition Corporation

Filing 320

ORDER by Chief Judge Richard Seeborg DENYING 302 MOTION FOR JUDGMENT AS A MATTER OF LAW; DENYING 304 MOTION FOR NEW TRIAL; and GRANTING IN PART AND DENYING IN PART 296 MOTION FOR ATTORNEY FEES. Signed on October 18, 2022. (rslc3, COURT STAFF) (Filed on 10/18/2022)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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MARY BETH MONTERA,

Case No. 16-cv-06980-RS

Plaintiff,
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United States District Court
Northern District of California

v.
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PREMIER NUTRITION CORPORATION,
Defendant.

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ORDER DENYING RENEWED
MOTION FOR JUDGMENT AS A
MATTER OF LAW, DENYING
MOTION FOR NEW TRIAL, AND
GRANTING IN PART AND DENYING
IN PART MOTION FOR ATTORNEY
FEES, EXPENSES, AND SERVICE
AWARD

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I. INTRODUCTION
Plaintiff Mary Beth Montera brought this lawsuit on behalf of New York consumers who

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had purchased Joint Juice, a beverage containing glucosamine and chondroitin that is sold by

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Defendant Premier Nutrition Corporation (“Premier”). The case proceeded to trial in May and

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June 2022, and the jury found Defendant liable for violations of New York General Business Law

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(“GBL”) §§ 349 and 350. Judgment was entered against Defendant in July 2022, after which the

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parties each filed post-trial motions. Defendant brings a renewed motion for judgment as a matter

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of law and moves for a new trial, while Plaintiff brings a motion seeking an award of attorney

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fees, reimbursement of expenses, and a service award for Ms. Montera.

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These motions are suitable for disposition without oral argument. Civ. L.R. 7-1(b). For the

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reasons discussed below, Defendant’s motions are denied. Plaintiff’s motion is granted in part and

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denied in part, with leave to amend. As to Plaintiff’s request for attorney fees and expenses, the

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documentation submitted is insufficient to support a lodestar analysis, which is the proper method

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to calculate attorney fees here. However, Plaintiff’s request for a service award is granted.
II. BACKGROUND

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This case was brought as one of numerous certified class actions alleging false advertising

United States District Court
Northern District of California

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and other claims arising from Premier’s promotion of Joint Juice, a line of joint health dietary

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supplements. Each class action concerns a set of plaintiffs in a different state. Initially filed in

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December 2016, this action concerned consumers in New York and was the first of the related

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cases to proceed to trial. Following a nine-day trial in May and June 2022, the jury returned a

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verdict finding that Premier engaged in deceptive acts and practices, in violation of GBL § 349,

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and deceptive or misleading advertising, in violation of GBL § 350. Judgment in the amount of

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$12,895,454.90 was thereafter entered against Defendant and in favor of Plaintiff and the Class.1
III. RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW

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Under Rule 50 of the Federal Rules of Civil Procedure, a court may grant a motion for

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judgment as a matter of law (“JMOL”) against a party on a claim or issue if the party “has been

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fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have

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a legally sufficient evidentiary basis to find for the party on that issue.” Fed. R. Civ. P. 50(a). If a

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party’s motion for JMOL under Rule 50(a) is denied or deferred, the party may renew its motion

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after trial. Fed. R. Civ. P. 50(b). The standard for granting the renewed motion is the same as the

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standard for granting the initial motion for JMOL. See Madrigal v. Allstate Ins. Co., 215 F. Supp.

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3d 870, 892 (C.D. Cal. 2016). A renewed motion for JMOL “is limited to the grounds asserted in

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the . . . Rule 50(a) motion.” EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009).

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“A jury’s verdict must be upheld if it is supported by substantial evidence,” Johnson v. Paradise

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Actual damages were determined by the jury to be $1,488,078.49, a sum derived from the total
sales of Joint Juice in New York during the Class Period. See Dkt. 268. Following the trial,
statutory damages were assessed at $8,312,450 (reduced from Plaintiff’s request of $91,436,950),
along with $4,583,004.90 in prejudgment interest. See Dkt. 294. Judgment was entered as to
statutory (rather than actual) damages because the relevant GBL sections allow a prevailing
plaintiff to recover the higher of the two awards. Id.; see N.Y. GEN. BUS. LAW §§ 349(h),
350-e(3).
ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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Valley Unified Sch. Dist., 251 F.3d 1222, 1227 (9th Cir. 2001), and the evidence must be viewed

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in the light most favorable to the nonmoving party, see Go Daddy, 581 F.3d at 961.

United States District Court
Northern District of California

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Premier’s motion raises several familiar arguments, including that Plaintiff failed to prove

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the elements of injury, causation, materiality, and deceptiveness. Some of these arguments have

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been augmented, but nothing in the record has changed: the jury’s verdict was supported by ample

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evidence as to each element of both claims, and thus a reasonable jury would have had a legally

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sufficient evidentiary basis to find for Plaintiff. Accord Dkt. 293. Defendant’s additional

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arguments — that it was entitled to the GBL’s safe harbor provision (or, alternatively, that federal

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law preempts Plaintiff’s claim) and that its labels should be shielded by the First Amendment

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and/or the New York Constitution — were not raised in Defendant’s initial motion for JMOL. The

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only further inquiry is thus limited to reviewing the jury’s verdict for plain error and reversing

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“only if such plain error would result in a manifest miscarriage of justice.” Go Daddy, 581 F.3d at

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961 (quoting Janes v. Wal-Mart Stores, Inc., 279 F.3d 883, 888 (9th Cir. 2002)). Again, the jury’s

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verdict was not plainly erroneous; as noted above, it was well supported. The motion is denied.

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IV. MOTION FOR NEW TRIAL

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Under Federal Rule of Civil Procedure 59(a)(1), a court may grant a new trial “if the

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verdict is contrary to the clear weight of the evidence, is based upon false or perjurious evidence,

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or to prevent a miscarriage of justice.” Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir.

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2007) (citing Passantino v. Johnson & Johnson Consumer Prods., 212 F.3d 493, 510 n.15 (9th

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Cir. 2000)). Unlike on a motion for JMOL, the court reviewing a motion for new trial “can weigh

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the evidence and assess the credibility of witnesses, and need not view the evidence from the

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perspective most favorable to the prevailing party.” Landes Constr. Co. v. Royal Bank of Canada,

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833 F.2d 1365, 1371 (9th Cir. 1987). However, a new trial should not be ordered “simply because

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the court would have arrived at a different verdict.” Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir.

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2002). Rather, the motion should only be granted if the court is “left with the definite and firm

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conviction that a mistake has been committed.” Landes, 833 F.3d at 1372 (citation and internal

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quotation marks omitted). “If a motion for new trial is based on an alleged evidentiary error, a new

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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trial is warranted only if the party was ‘substantially prejudiced’ by an erroneous evidentiary

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ruling.” Feiman v. City of Santa Monica, 2014 WL 12703729, at *1 (C.D. Cal. July 18, 2014)

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(quoting Ruvalcaba v. City of Los Angeles, 64 F.3d 1323, 1328 (9th Cir. 1995)).

United States District Court
Northern District of California

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Premier presents numerous arguments for why it is entitled to a new trial. Like with its

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renewed motion for JMOL, nearly all of them have been raised before and can be dismissed

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outright: (1) Defendant was not entitled to invoke the GBL’s safe harbor provision due to its

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failure timely to notify the FDA as required by the statute, see 21 U.S.C. § 343(r)(6), and thus it

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was not entitled to a jury instruction on this subject; (2) Premier’s Seventh Amendment rights

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were not violated, see Dkt. 215, at 5; (3) the jury was not erroneously instructed as to the injury

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element of Plaintiff’s claims, see Dkt. 265; and (4) evidence of Premier’s marketing strategy was

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not erroneously or prejudicially admitted, see Dkt. 180. Further, as noted above, the jury’s verdict

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was not against the weight of the evidence; Defendant’s argument regarding the Thompson/Cal

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Recycle tax letter is unpersuasive; and Plaintiff’s counsel stayed within the reasonable bounds of

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argument and did not improperly inflame the jury. None of these arguments individually warrant a

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new trial, nor is Premier’s argument, as a whole, greater than the sum of its parts. The motion is

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therefore denied.

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V. ATTORNEY FEES, EXPENSES, AND SERVICE AWARD

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A. Attorney Fees

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Plaintiff seeks an attorney fee award of $6,806,031.96. This figure is based on two separate

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calculations that lead to roughly the same total. Plaintiff claims that, under the “percentage-of-the-

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fund” approach, it is entitled to a fee award that is equivalent to a certain percentage of the gross

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benefit inuring to the Class. This gross benefit, as Plaintiff calculates, is $20,438,534.42 — that is,

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the sum of the $12,895,454.90 judgment, the proposed fee award, and reimbursed expenses.

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Plaintiff’s fee award request represents 33% of this total.

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Alternatively, Plaintiff calculates a “lodestar” amount, stemming from the familiar rule of

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“begin[ning] with the multiplication of the number of hours reasonably expended by a reasonable

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hourly rate.” In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 570 (9th Cir. 2019). Supported

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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by declarations from members of Plaintiff’s litigation team, Plaintiff states this case has required

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9,635.05 hours of work, yielding a total lodestar of $6,409,284.75 — comprised of $5,418,781.25

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for Blood Hurst & O’Reardon LLP, $393,293.50 for Lynch Carpenter LLP, and $598,210.00 for

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Iredale & Yoo, APC. See Dkt. 296-1 (“Blood Decl.”) ¶ 69. Plaintiff then notes that the slight

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difference between the lodestar and the percentage-of-the-fund calculations reflects a lodestar

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multiplier of only 1.06; thus, Plaintiff argues, the full $6,806,031.96 award is appropriate.

United States District Court
Northern District of California

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Premier, on the other hand, contests Plaintiff’s calculations on two main fronts. First, it

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claims the percentage-of-the-fund method is inappropriate where a fee-shifting statute is involved,

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and that the lodestar method should be used instead. Second, it argues Plaintiff’s declarations are

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insufficient to assess the lodestar, as Plaintiff failed to include detailed, contemporaneous time

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records along with its motion. For these reasons, Premier suggests the percentage-of-the-fund

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method should be used, and that Plaintiff’s counsel should receive only 25% of the judgment

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amount, rather than 33%; this lower figure represents the Ninth Circuit’s “benchmark.” See, e.g.,

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In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 945 (9th Cir. 2011). This calculation

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results in a total fee award of $3,223,863.72, drawn from the judgment itself.

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The parties’ positions yield two drastically different values and two very different

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outcomes for the Class’s recovery. Under Plaintiff’s model, the Class would retain most or all of

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the $12.89 million judgment, and Premier would be obligated to pay an additional $6.8 million

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award of fees and expenses to Plaintiff’s counsel directly. By contrast, Defendant’s model would

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result in Plaintiff’s counsel receiving roughly $3.5 million less and, since the award would be

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drawn from the judgment, the Class itself would bear this cost and receive roughly $9.69 million.

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1. Application of Fee-Shifting Provision

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The first question that must be resolved is whether the fee-shifting provision of GBL §§

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349 and 350 should apply. These sections provide that the Court “may award reasonable attorney’s

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fees to a prevailing plaintiff.” N.Y. GEN. BUS. LAW §§ 349(h), 350-e(3) (emphasis added). The

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statutory language offers no guidance on when fees should be awarded; rather, courts have held

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that granting a fee award under these sections “is left to the discretion of the trial court in all

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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circumstances.” Koch v. Greenberg, 14 F. Supp. 3d 247, 280 (S.D.N.Y. 2014) (quoting Riordan v.

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Nationwide Mut. Fire Ins. Co., 977 F.2d 47, 54 (2d Cir. 1992)). Among other factual situations,

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courts have approved of fee shifting in circumstances involving acts of fraud perpetrated against

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“consumers who are ‘vulnerable’ or ‘disadvantaged,” especially fraud conducted at a large scale.

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Id. For instance, in Independent Living Aids, Inc. v. Maxi-Aids, Inc., 25 F. Supp. 2d 127 (E.D.N.Y.

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1998), the Eastern District of New York concluded that fee shifting under §§ 349 and 350 was

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appropriate, considering the purpose of these statutes and the fact that “the customers at issue

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[were] among the most vulnerable in our society: the blind, the elderly, the physically disabled,

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and the infirm.” 25 F. Supp. 2d at 132; see also Richard A. Givens, Practice Commentary, N.Y.

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United States District Court
Northern District of California

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GEN. BUS. LAW § 349 (McKinney 1988).
Joint Juice, similarly, was marketed toward people suffering from joint pain. As the jury

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concluded, these claims were fraudulent. The Class itself is also quite large, and thus the impact of

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the fraud was broad. The public policy underpinning §§ 349 and 350 therefore weigh strongly in

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support of allowing fee shifting here. Thus, Plaintiff’s fees will be shifted under the GBL statutes.

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2. Calculating Attorney Fees

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As discussed above, Plaintiff and Defendant disagree about how attorney fees should be

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calculated. Like many questions in the long life of this case, the question of how properly to

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calculate attorney fees in this scenario appears to be without a clear answer. Both parties cite to

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many cases involving class action settlements, rather than litigated cases, while other cited cases

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only partially fit the facts presented here. However, the caselaw does suggest a path forward.

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At the outset, Defendant’s ultimate conclusion must be rejected. Notwithstanding the

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shortcomings of Plaintiff’s lodestar submissions (discussed in greater detail below), it would be

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patently unreasonable to award Plaintiff’s counsel less than half of their proffered lodestar amount.

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Even more saliently, Defendant’s approach would result in attorney fees being drawn down from

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the Class’s judgment; thus, no fee shifting would occur. Cf. Pierce v. Visteon Corp., 791 F.3d 782,

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787 (7th Cir. 2015) (“[T]his case was litigated under a fee-shifting statute, and we do not see a

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good reason why, in the absence of a contract, counsel should be entitled to money from the class

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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on top of or in lieu of payment by the losing litigant.”). This result is unwarranted given the

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conclusion above: Premier will be required to pay the fee award directly.

United States District Court
Northern District of California

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Plaintiff argues that either the percentage-of-the-fund or the lodestar method can be used

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here to calculate the fee. While the percentage method is preferred for its ease of application,

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“[u]nder a fee-shifting statute, the court ‘must calculate awards for attorneys’ fees using the

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lodestar method.’” Staton v. Boeing Co., 327 F.3d 938, 965 (9th Cir. 2003) (quoting Ferland v.

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Conrad Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2011)); see Bluetooth, 654 F.3d at 942

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(“The ‘lodestar method’ is appropriate in class actions brought under fee-shifting statutes . . . .”);

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Sobel v. Hertz Corp., 53 F. Supp. 3d 1319 (D. Nev. 2014); Pike v. Cnty. Of San Bernardino, 2020

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WL 1049912, at *4 (C.D. Cal. Jan. 27, 2020) (“[T]he percentage-of-the-fund method is disfavored

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in cases with fee-shifting statutes.” (citing Parkinson v. Hyundai Motor Am., 796 F. Supp. 2d

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1160, 1172 (C.D. Cal. 2010)); 5 NEWBERG AND RUBENSTEIN ON CLASS ACTIONS § 15:38 (6th ed.

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2022) (“So strong is the Court’s devotion to the lodestar method that it has held that the lodestar

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calculation ‘yields a fee that is presumptively sufficient to achieve [fee-shifting’s] objective.’

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What that means is that a court’s failure to utilize the lodestar method in a fee-shifting case may

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constitute reversible error.” (footnote omitted)). Thus, the lodestar will serve as the relevant guide.

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Here, however, the declarations submitted by Plaintiff’s counsel are “insufficient” to

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conduct a fulsome lodestar analysis, as they lack contemporaneous time records. In re Optical

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Disk Drive Prods. Litig., 2021 WL 4124159, at *1 (N.D. Cal. Sept. 9, 2021). This does not

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suggest, as Defendant claims, that Plaintiff acted in bad faith or should not be entitled to provide

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such documentation; indeed, Plaintiff fully complied with Civil Local Rule 54-5(b) and did not

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submit more detailed records. See Civ. L.R. 54-5(b)(2) (requiring only a “summary” of time spent

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by counsel). Indeed, these records would have been sufficient for use as a cross-check under a

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percentage calculation. See Optical Disk Drive, 2021 WL 4124159, at *2.

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Yet “[w]ithout in any way questioning the good faith basis for [Plaintiff’s counsel’s]

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statement[s], there simply is no way to verify [them].” Indep. Living Aids, Inc., 25 F. Supp. 2d at

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133. To ensure the lodestar that Plaintiff proffers is accurate, especially in light of the concerns

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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raised by Defendant as to potentially overlapping work with the related Joint Juice cases, Plaintiff

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will be directed to refile its motion with contemporaneous time records. The motion is therefore

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denied as to Plaintiff’s request for attorney fees, without prejudice.

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B. Expenses

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In addition to attorney fees, Plaintiff seeks $1,133,794.77 in reimbursed expenses. This

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total is supported by a series of declarations, noting a variety of routine litigation expenses (for

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instance, printing and photocopying, expert fees, and travel). See, e.g., Blood Decl. ¶¶ 66–68.

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Defendant, in turn, argues that Plaintiff did not provide sufficient documentation to support this

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request, and it raises the concern that Plaintiff has sought to recover expenses for the related Joint

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United States District Court
Northern District of California

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Juice actions. Thus, Defendant requests the Court award, at most, $197,852.36 in expenses.
Plaintiff’s declarations, though a useful starting point, ultimately “lack[] sufficient detail to

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establish the reasonableness of the costs.” Banas v. Volcano Corp., 47 F. Supp. 3d 957, 977–80

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(N.D. Cal. 2014). Given that Plaintiff will be afforded the opportunity to submit a more detailed

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request for attorney fees, she will likewise be given the opportunity to refile the motion with more

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detailed expense documentation. The motion is therefore denied with respect to expenses, without

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prejudice.

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C. Service Award

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Finally, Plaintiff requests a $25,000 service award for Ms. Montera. Defendant does not

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contest the award, and the award is both comparable to similar awards in this District and

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reasonable considering Ms. Montera’s experience participating in this case. The motion is

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therefore granted with respect to the service award, with the award to be paid from the judgment.
VI. CONCLUSION

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Defendant’s renewed motion for JMOL and its motion for new trial are denied. Plaintiff’s

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motion is granted only with respect to the request for a service award for Ms. Montera. It is denied

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in all other respects, without prejudice.

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IT IS SO ORDERED.
ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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Dated: October 18, 2022
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RICHARD SEEBORG
Chief United States District Judge

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United States District Court
Northern District of California

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ORDER ON RENEWED MOTION FOR JMOL, NEW TRIAL, AND ATTORNEY FEES
CASE NO. 16-cv-06980-RS

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