Delacruz v. Cytosport, Inc.

Filing 91

ORDER by Judge Claudia Wilken GRANTING 81 FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND GRANTING 74 APPLICATION FOR ATTORNEYS FEES, COSTS AND INCENTIVE AWARDS; GRANTING 84 OBJECTORS ADMINISTRATIVE MOTION. (ndr, COURT STAFF) (Filed on 7/1/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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OAKLAND DIVISION

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CLAIRE DELACRUZ, individually, and on
behalf of other members of the general public
similarly situated,

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Plaintiff,
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v.
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CYTOSPORT, INC., a California
Corporation,

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CASE NO.: 4:11-cv-03532-CW
ORDER GRANTING FINAL APPROVAL OF
CLASS ACTION SETTLEMENT AND
GRANTING APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND
INCENTIVE AWARDS; GRANTING
OBJECTOR’S ADMINISTRATIVE MOTION
(Docket Nos. 74, 81, 84)

Defendant.

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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WHEREAS, following a hearing on Plaintiff’s Motion for Preliminary Approval of Class
Action Settlement, the parties made modifications to their original proposed settlement agreement
and, thereafter, presented this Court with a proposed First Amended Settlement Agreement and
Release in the above-captioned matter (the “Settlement Agreement and Release”);
WHEREAS, by Order dated November 18, 2013, this Court granted preliminary approval (the
“Preliminary Approval Order”) of the Settlement Agreement and Release;
WHEREAS, in connection with preliminary approval of the parties’ Settlement
Agreement and Release, the Court provisionally certified a nationwide settlement class for
settlement purposes only, approved the procedure for giving notice and forms of notice, and
set a final fairness hearing on May 15, 2014;
WHEREAS, on May 15, 2014, the Court held the duly noticed final fairness hearing
to consider: (1) whether the terms and conditions of the Settlement Agreement and Release
are fair, reasonable and adequate, and any objections thereto; (2) whether a judgment should
be entered dismissing the named Plaintiff Claire Delacruz’s (“Plaintiff”) complaint on the
merits and with prejudice in favor of Defendant CytoSport, Inc. (“CytoSport”) and against
all persons or entities who are settlement class members; and (3) whether and in what
amount to award attorney’s fees and expenses to counsel for the settlement class;
WHEREAS, the Court has considered all written submissions of counsel, all
objections timely filed, all record evidence and all oral argument and other matters
submitted to it at the hearing and otherwise;
WHEREAS, the Court finds that the Settlement Agreement was the result of
extensive and protracted arms-length negotiations occurring over several years and multiple
mediation sessions with the Honorable Edward A. Panelli (Ret.) and the Honorable Carl J.
West (Ret.), both currently affiliated with JAMS. Counsel for the parties are highly
experienced in class action litigation, with full knowledge of the risks inherent in this
Action. The extent of written discovery, depositions, document productions, and
independent investigations by counsel for the parties, and the factual record compiled,

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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suffices to enable the parties to make an informed decision as to the fairness and adequacy
of the settlement;

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WHEREAS, the Court has determined that the proposed Settlement Agreement and
Release, the significant relief provided to the Settlement Class Members—in the form of
CytoSport’s agreement to make certain payments to settlement class members as well as its
agreement to discontinue the use of certain words and phrases in the labeling and marketing
of certain Muscle Milk® products—as described in the Settlement Agreement and Release,
and the award of attorneys’ fees and expenses requested, are fair, reasonable and adequate;
and
WHEREAS, the matter having been submitted, due and adequate notice having been
provided to Class Members as required by the Court’s Preliminary Approval Order, and
otherwise being fully informed, and good cause appearing, the Court hereby Orders as
follows:
1.

The Settlement Agreement and Release, and all attachments thereto, is

expressly incorporated by reference into this Final Order and made a part hereof for all
purposes. Except where otherwise noted, all capitalized terms used in this Final Order shall
have the meanings set forth in the Settlement Agreement and Release.
2.

The Court has personal jurisdiction over the Parties and all Settlement Class

Members, and has subject-matter jurisdiction over this Action, including, without limitation,
jurisdiction to approve the proposed settlement, to rule on all objections timely filed, to
grant final certification of the Settlement Class, to settle and release all claims arising out of
the transactions alleged in Plaintiff’s complaint in the Action, and to dismiss this Action on
the merits and with prejudice.
3.

The Court finds, for settlement purposes only and conditioned upon the entry

of this Final Order and upon the occurrence of the Effective Date, that the requirements for
a class action under Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure have
been satisfied in that: (a) the number of Settlement Class Members is so numerous that

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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joinder of all members thereof is impracticable; (b) there are questions of law and fact
common to the Settlement Class; (c) the claims of the Plaintiff are typical of the claims of
the Settlement Class they seek to represent for purposes of settlement; (d) the Plaintiff has
fairly and adequately represented the interests of the Settlement Class and will continue to
do so, and the Plaintiff has retained experienced counsel to represent her; (e) for purposes of
settlement, the questions of law and fact common to the Settlement Class Members
predominate over any questions affecting any individual Settlement Class Member; and (f)
for purposes of settlement, a class action is superior to the other available methods for the
fair and efficient adjudication of the controversy. See Amchem Prods., Inc. v. Windsor, 521
U.S. 591, 613-14 (1997). The Court also concludes that, because this Action is being settled
rather than litigated, the Court need not consider manageability issues that might be
presented by the trial of a nationwide class action involving the issues in this case. Id. at
620.
4.

In making these findings, the Court has considered, among other factors: (i)

the interests of Settlement Class Members in individually controlling the prosecution or
defense of separate actions; (ii) the impracticability or inefficiency of prosecuting or
defending separate actions; (iii) the extent and nature of any litigation concerning these
claims already commenced; and (iv) the desirability of concentrating the litigation of the
claims in a particular forum. The Court takes guidance in its consideration of certification
and settlement issues from Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998).
5.

Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby

finally certifies this Action for settlement purposes as a nationwide class action on behalf of:
a class of all persons who purchased one or more Muscle Milk® Ready-to-Drink beverages
(the “RTD”) and/or Muscle Milk® bars (the “Bar”) (the Bar together with the RTD, the
“Products”) at retail in the United States from July 18, 2007 through December 31, 2012
(the “Settlement Class”). As defined in the Settlement Agreement and Release, “Settlement
Class Member(s)” means any member of the Settlement Class who does not elect exclusion

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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or opt out from the Settlement Class pursuant to the terms and conditions for exclusion set
out in the Settlement Agreement and Release and the Long Form Notice. Excluded from
the Settlement Class are all persons who are employees, directors, officers, and/or agents of
CytoSport or its subsidiaries and affiliated companies, as well as the Court and its
immediate family and staff.
6.

The Court appoints the law firm of Baron & Budd, P.C. as counsel for the

Class (“Class Counsel”). The Court designates named Plaintiff Claire Delacruz as the
representative of the Settlement Class. The Court finds that the named Plaintiff and Class
Counsel have fully and adequately represented the Settlement Class for purposes of entering
into and implementing the Settlement Agreement and Release and have satisfied the
requirements of Rule 23(a)(4) of the Federal Rules of Civil Procedure.
7.

The Court finds that the electronic and publication notice are in accordance

with the terms of the Settlement Agreement and Release and this Court’s Preliminary
Approval Order, and as explained in the declarations filed before the Final Fairness
Hearing:
(a)

constituted the best practicable notice to Settlement Class Members

under the circumstances of this Action;
(b)

were reasonably calculated, under the circumstances, to apprise

Settlement Class Members of (i) the pendency of the Action, (ii) their right to exclude
themselves from the Settlement Class and the proposed settlement, (iii) their right to object
to any aspect of the proposed settlement (including final certification of the Settlement
Class, the fairness, reasonableness or adequacy of the proposed settlement, the adequacy of
the Settlement Class’s representation by Plaintiff or Class Counsel, and/or the award of
attorneys’ and representative fees), (iv) their right to appear at the Final Fairness Hearing
(either on their own or through counsel hired at their own expense), and (v) the binding
effect of the orders and Final Order in this Action, whether favorable or unfavorable, on all
persons and entities who do not request exclusion from the Settlement Class;

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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(c)

persons and entities entitled to be provided with notice; and

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constituted reasonable, due, adequate, and sufficient notice to all

(d)

fully satisfied the requirements of the Federal Rules of Civil Procedure,

including Rule 23(c)(2) and (e) of the Federal Rules of Civil Procedure, the United States
Constitution (including the Due Process Clause), the Rules of this Court, California’s
Consumers Legal Remedies Act (Cal. Civ. Code §§ 1750 et seq.), and any other applicable
law.
8.

The Court finds that CytoSport provided notice of the proposed settlement to

the appropriate state and federal government officials pursuant to 28 U.S.C. § 1715.
Furthermore, the Court has given the appropriate state and federal government officials the
requisite ninety (90) day time period (pursuant to 28 U.S.C. § 1715) to comment or object to
the proposed settlement before entering its Final Order and no such objections or comments
were received.
9.

The terms and provisions of the Settlement Agreement and Release, including

any and all amendments and exhibits, have been entered into in good faith and are hereby
fully and finally approved as fair, reasonable and adequate as to, and in the best interests of,
the Plaintiffs and the Settlement Class Members, and in full compliance with all applicable
requirements of the Federal Rules of Civil Procedure, the United States Constitution
(including the Due Process Clause), and any other applicable law. The Court finds that the
Settlement Agreement and Release is fair, adequate and reasonable based on the following
factors, among other things:
(a)

There is no fraud or collusion underlying this settlement, and it was

reached after good faith, arms-length negotiations, warranting a presumption in favor of
approval. Officers for Justice v. Civil Serv. Comm’n., 688 F.2d 615, 625 (9th Cir. 1982).
(b)

The complexity, expense and likely duration of the litigation favor

settlement on behalf of the Settlement Class, which provides meaningful benefits on a much
shorter time frame than otherwise possible. Based on the stage of the proceedings and the

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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amount of investigation and informal discovery completed, the Parties have developed a
sufficient factual record to evaluate their chances of success at trial and the proposed
settlement.

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(c)

litigation such as this, and the Plaintiff, who has participated in this litigation and evaluated
the proposed settlement, also favors final approval. See Boyd v. Bechtel Corp., 485 F. Supp.
610, 622 (N.D. Cal. 1979); Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1291 (9th Cir.
1992).

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(d)

possible recoveries by the Settlement Class.
10.

As described in the Settlement Agreement and Release, CytoSport has agreed

to distribute the total sum of $1,000,000 to eligible Settlement Class Members, and, not later
than forty-five (45) days following the Effective Date, to provide for the following
injunctive relief:
(a)

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Bars.

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(b)

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To cease using the words “Healthy Fats” on any newly-printed packaging of
Muscle Milk® RTD, provided however, that CytoSport may use the term

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“Healthy Fats” on the packaging of Muscle Milk® RTD (or related products)

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so long as such product contains fewer than 0.5 grams of saturated fat per

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serving, or CytoSport also includes the words “See nutrition information for

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To cease using the words “Healthy, Sustained Energy” on the Principal
Display Panel of all newly-printed packaging of Muscle Milk® RTD and

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The settlement provides meaningful relief to the Settlement Class,

including the injunctive and monetary relief described below, and falls within the range of

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The support of Class Counsel, who are highly skilled in class action

saturated fat content” in connection with the words “Healthy Fats.”
11.

Cytosport shall abide by the requirements of paragraph 10 above for three (3)

years after the Effective Date. Nothing in this Final Order shall prevent CytoSport from
implementing changes prior to the Effective Date. This Final Order does not preclude

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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CytoSport from making further changes to any of its product labels or marketing: (i) that
CytoSport reasonably believes are necessary to comply with any statute, regulation, or other
law of any kind; (ii) that are necessitated by product changes and/or to ensure that
CytoSport provides accurate product descriptions; or (iii) that are more detailed than those
required by the Settlement Agreement and Release and/or this Final Order.
12.

The Court has reviewed the Proposed Product Distribution Plan for the

distribution of residual settlement funds that was submitted by CytoSport (Dkt. 83 at p. 610) (the “Distribution Plan”). The Court approves the Distribution plan and the contents of
the Distribution Plan are incorporated as if set forth fully herein. The Court finds that the
terms and conditions of the Distribution Plan and the portions of the Settlement Agreement
and Release relating to product distribution (Dkt. 67-1 at p. 12-13) comply with the legal
standards governing such distributions. See Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir.
2012), Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011), and Six Mexican Workers v.
Ariz. Citrus Growers, 904 F.2d 1301, 1305 (9th Cir. 1990). Based on the Court’s review of
these materials and all of the evidence before the Court, the Court makes the following
findings: (1) the Court finds that the Distribution Plan includes multiple features to facilitate
distribution of products to members of the Settlement Class; (2) the Court finds that the
Distribution Plan is carefully focused on and tailored to Plaintiff’s allegations and the
objectives of the underlying statutes; (3) the Court finds that the Distribution Plan ensures
that reasonable efforts will be made to target class members; (4) the Court finds that the
Distribution Plan does not diminish the cash payments made to class members; and (5) the
Court finds that the product distributions were not made in lieu of cash payments to the
class. Finally, the Settlement Agreement provides that the value of any products distributed
shall be measured according to their retail value, the distribution shall occur over a threeyear period, the products distributed shall be in addition to any other charitable donations
planned by Cytosport, and Cytosport shall not seek a tax deduction for such product
donations.

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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13.

In recognition of Plaintiff’s efforts on behalf of the Settlement Class, as set

forth in the Declaration of Claire Delacruz in Support of Motion for Final Approval of Class
Action Settlement, the Court approves Plaintiff’s request for an incentive award of $5,000,
and finds such award just and reasonable. Cytosport shall pay such award in accordance
with the terms of the Settlement Agreement and Release. In approving the incentive award,
the Court has considered Plaintiff’s commitment of time to the Action which spanned
almost three years, the risk of liability for Cytosport’s costs, the benefits provided to tens of
thousands of class members and the absence of any conflicts of interest between Plaintiff
and members of the Settlement Class.
14.

Class Counsel seek recovery of $855,157.25 in attorneys’ fees and $190,839.41 in

expenses. This Court is familiar with the work performed by Class Counsel in this matter.
The Court finds that the expenses incurred, work performed, time spent, and rates charged by
Class Counsel appear to be reasonable. The requested fee and expense award is authorized
and appropriate under the Consumer Legal Remedies Act (“CLRA”), California Civil Code
Section 1780(e), and the Private Attorney General Statute, California Civil Procedure Section
1021.5. The settlement discussed herein, which resulted in the enforcement of an important
right affecting the public interest, is favorable for the Settlement Class, and constitutes a
victory for Settlement Class Members. Additionally, Class Counsel advanced the public
interest by enforcing consumer protection laws, and obtained significant benefits for more
than 33,300 members of the Settlement Class. Accordingly, this Court applies the lodestar
method to award fees under the CLRA and Private Attorney General Statute.
15.

To assist the Court in evaluating the reasonableness of the time spent on this case, Class

Counsel presented a detailed declaration which included a schedule of time records and expenses
incurred, and the experience and qualifications of the attorneys who worked on this case. Such
declaration reflects that Class Counsel has devoted a total of 1,453.35 hours to the
investigation and litigation of this case and the hourly rates for the lawyers who performed
such services ranged from $390 to $825 per hour for attorneys, depending on their experience

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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and skill, and $95 per hour for paralegal staff. Class Counsel has computed a total lodestar of
$855,157.25 through February 25, 2014. After considering Class Counsel’s statements and
legal authorities concerning the market rates for plaintiffs’ class action attorneys, and the
Court’s own experience with hourly rates in this District, the Court is satisfied that Class
Counsel’s fees meet the reasonableness standard. See Staton v. Boeing Co., 327 F.3d 938,972
(9th Cir. 2003).
16.

In evaluating Class Counsel’s lodestar, the Court has also considered whether Class

Counsel used reasonable hourly rates and sound billing practices and assessed the requested lodestar in
light of the results obtained for the class. See Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942
(9th Cir. 2011). Additionally, in considering the reasonableness of attorneys’ fees, the Court has
considered the time and labor required, novelty and complexity of the litigation, skill and experience of
counsel, the results obtained, and awards in similar cases. See Blum v. Stenson, 465 U.S. 886, 898-900
(1984); Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975).
17.

Class Counsel have done a considerable amount of work to develop Plaintiff’s claims in

this case, and have committed significant resources to this matter. This action conferred a significant
benefit on a large class of persons by (1) making guaranteed financial relief available to over 30,300
claimants who individually could not be expected to dedicate the financial resources required to litigate
the claims asserted in this case, (2) distributing residual settlement funds in the form of re-labeled
Muscle Milk Light products, or other products with a similar nutrient profile, targeted to members of
the Settlement Class pursuant to Cytosport’s Proposed Product Distribution Plan, and (3) obtaining the
injunctive relief discussed in paragraph 10 above.
18.

This case also presented unique complexities concerning the interplay between the FDA

guidelines and the false advertising laws. These issues were contested at the pleading stage, including
two motions to dismiss which disposed of certain of Plaintiff’s claims, and Class Counsel retained
experts in connection with anticipated class certification motions to opine on key issues including
whether the subject products were “healthy,” and whether the subject representations were material to
consumers. Additionally, Class Counsel has submitted a declaration attesting to the significant

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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expenditure of Class Counsel’s time on matters such as: (1) extensive pre-litigation investigation; (2)
consulting with industry experts; (3) extensive and detailed legal research into the substantive law of
the causes of action at issue; (4) developing and executing litigation strategies; (5) researching and
preparing for class certification; (6) developing and executing mediation and settlement strategies; and
(7) analyzing data and information exchanged between the parties to assure informed decision-making
concerning the risks, expenses, and benefits of continuing to litigate the case.
19.

Class Counsel undertook significant financial risk in prosecuting this case. Class

Counsel undertook this matter solely on a contingent basis with no guarantee of recovery. Class
Counsel risked their resources to prosecute this action. There was no assurance that this case would
have been certified, that certification would include a nationwide class, or that Plaintiff would have
succeeded at trial.
20.

Class Counsel vigorously and competently pursued the Class Members’ claims. The

arm’s-length settlement negotiations that took place demonstrate that Class Counsel adequately
represented the Class. Moreover, the Court finds no evidence that Plaintiff and Class Counsel had
any conflicts of interests with the Class. Rather, Plaintiff, like each absent Class Member, had a
strong interest in proving CytoSport’s common course of conduct, establishing its unlawfulness and
obtaining redress.
21.

Class Counsel also provided the Court with a declaration attesting to their extensive

experience and expertise in prosecuting complex class actions. Class Counsel are active class action
practitioners who are experienced in consumer fraud litigation. Their work was performed by a core
team of attorneys fully familiar with the complex factual and legal issues presented by this litigation.
22.

The Court has also cross-checked Class Counsel’s lodestar fee against the percentage-

of-the-recovery method. See Bluetooth, supra, at 943. To that end, when determining the value of
the settlement, courts often consider the non-monetary benefits conferred, as well as any cash
attorneys’ fee and cost payments to be made pursuant to the settlement terms with the defendants.
See, e.g. Staton v. Boeing Co., 327 F.3d 938, 972-74 (9th Cir. 2003). The Ninth Circuit also
identified five factors that are relevant in determining whether requested attorneys’ fees in a common

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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fund case are reasonable: (1) the results achieved; (2) the risk of litigation; (3) the skill required and
the quality of work; (4) awards made in similar cases; and (5) the contingent nature of the fee and the
financial burden carried by the plaintiffs. Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048-50 (9th
Cir. 2002). Applying these factors, the Court finds that the requested fees are reasonable
23.

Class Counsel achieved a settlement in this action that altered Cytosport’s business

practices and provided guaranteed compensation to Class members for alleged misrepresentations.
The monetary relief component of the Amended Settlement provides a guaranteed, fixed monetary
claim fund of $1,000,000 for payment of claims, with claimants paid at $30.00 each, and the residual,
if any, to be paid to Class Members who made claims on a pro rata basis, up to a total of $60.00 for
each claimant. No proof of purchase is necessary for class members to qualify for monetary relief,
and class members may submit claim forms online, in addition to the use of other methods of
delivery (including mail).
24.

Although the Parties have agreed in the Settlement Agreement that the monetary value

of CytoSport’s relabeling obligation is $1,000,000, for the purpose of calculating attorneys’ fees
based on the common fund approach, Class Counsel did not attribute any monetary value to such
injunctive relief. Nevertheless, the Court finds that the injunctive relief provided for in the
Settlement Agreement, and the notice of such relief provided to Class Members, does constitute a
valuable benefit to be considered in determining the reasonableness of Class Counsel’s fees. Thus,
Class Counsel’s requested fee award is within the Ninth Circuit’s “benchmark,” even without
attributing any monetary value to CytoSport’s agreement to re-label the Products.
25.

Thus, the resolution of this case through settlement provides the Settlement Class with

the benefit of significant financial recovery without the delay of continued litigation.
26.

For the foregoing reasons, the Court approves Class Counsel’s fees in the sum

of $855,157.25 and costs in the sum of $190,839.41. Cytosport shall pay such sums in
accordance with the Settlement Agreement.
27.

The Court has evaluated and overrules the objections filed by Theodore Frank,

William Chamberlain, Don Orrell and Craig Smotzer. In ruling on such objections, the Court

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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has evaluated the factors set forth in Bluetooth, supra, and finds that the settlement was
reached only after contested litigation, including through motion practice, written discovery,
depositions, three mediations and months of settlement negotiations. The terms and structure of the
Settlement Agreement were the subject of intense, serious, arms-length negotiations, with the
assistance of two respected retired judges, and was not the subject of self-dealing or collusion.
In that regard, the Settlement Agreement does not provide Class Counsel with a
disproportionate distribution of the settlement and Settlement Class Members will receive a
guaranteed monetary distribution of $1 million. The Settlement Agreement also does not contain
any “kicker” arrangement whereby any reduction in attorneys’ fees reverts to Cytosport. To
date, over 33,300 class members have applied to receive more than $30.00 each and notice of the
settlement has been disseminated to fifty-five federal and state government officials, none of whom
have filed objections. The reaction of class members to the settlement has been overwhelmingly
positive, and is a significant factor to be weighed in considering its adequacy. See Hanlon v.
Chrysler Corp., 150 F.3d 1011, 1027 (9th Cir. 1998).
28.

The parties are directed to consummate the Settlement Agreement and Release

in accordance with its terms and conditions. The Court hereby declares that the Settlement
Agreement and Release is binding on all parties and Settlement Class Members, and it is to
be preclusive in all pending and future lawsuits or other proceedings.
29.

Upon the Effective Date, the Releasing Parties (as that term is defined in the

Settlement Agreement and Release) shall be deemed to have, and by operation of the Final
Order and Judgment shall have, fully, finally and forever released, relinquished, and
discharged all Released Claims against the Released Parties. Released Claims means and
includes any and all claims, demands, rights, damages, obligations, suits, debts, liens, and
causes of action of every nature and description whatsoever, ascertained or unascertained,
suspected or unsuspected, existing or claimed to exist, including unknown claims (as
described in Paragraph 31 below) as of the Effective Date by Plaintiff and all Settlement
Class Members (and Plaintiff’s and Settlement Class Members’ respective heirs, executors,

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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administrators, representatives, agents, attorneys, partners, successors, predecessors-ininterest, and assigns) that:
(i)

were brought or that could have been brought against the Released

Parties, or any of them, and that arise out of or are related in any way to any or all of the
acts, omissions, facts, matters, transactions, or occurrences that were or could have been
directly or indirectly alleged or referred to in the Action (including, but not limited to
alleged violations of state consumer protection, unfair competition, and/or false or deceptive
advertising statutes (including, but not limited to, Cal. Bus. & Prof. Code § 17200 et seq.,
Cal. Bus. & Prof. Code § 17500 et seq., and Cal. Civ. Code § 1750 et seq.); breach of
contract; breach of express or implied warranty; fraud; unjust enrichment, restitution,
trespass, conversion, declaratory or injunctive relief, and other equitable claims or claims
sounding in contract and tort); and
(ii)

relate in any way to any claim, advertisement, representation, assertion,

promise, or similar statement made by any of the Released Parties in any forum or medium
whatsoever about, concerning, regarding, portraying, and/or relating to the healthfulness or
nutritional attributes of the Products, including but not limited to all claims that relate in any
way to: the use of the words “Healthy Sustained Energy” and/or “Sustained Energy” with
respect to the Products; the use of the words “Healthy Fats” with respect to the Products; the
use of the words “Good Carbohydrates” with respect to the Products; the calories provided
by the Products; the ingredients in the Products, including but not limited to the amounts
and/or presence of: (a) fractionated palm kernel oil, partially hydrogenated palm oil, or any
variant thereof, (b) trans fat, (c) sugars of any type, or (d) artificial sweeteners of any type;
the amount and/or presence of fat or saturated fat in the Products; the amount and/or
presence of cholesterol in the Products; the amount and/or presence of carbohydrates in the
Products; the amount and/or presence of protein in the Products; the marketing of the
Products as “premium,” “healthy,” part of a “healthy lifestyle,” as a “healthy alternative
beverage” and/or related statements; guidelines concerning when and/or in what quantities

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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to use the Products; and compliance with any federal, state, or local labeling requirements
with respect to the healthfulness, nutritional content, and/or the nutritional attributes of the
Products. However, Released Claims do not include claims for personal injury.
30.

The Released Claims include known and unknown claims relating to the Action,

and the Settlement Agreement and Release is expressly intended to cover and include all such
injuries or damages, including all rights of action thereunder. Settlement Class Members have
expressly, knowingly, and voluntarily waived the provisions of Section 1542 of the California
Civil Code, which provides as follows:

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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.

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Settlement Class Members have expressly waived and relinquished any and all rights and

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benefits that they may have under, or that may be conferred upon them by, the provisions of

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Section 1542 of the California Civil Code, or any other law of any state or territory that is

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similar, comparable, or equivalent to Section 1542, to the fullest extent that they may lawfully

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waive such rights or benefits pertaining to the Released Claims. In connection with such waiver

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and relinquishment, the Settlement Class Members have acknowledged that they are aware that

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they or their attorneys may hereafter discover claims or facts in addition to or different from

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those that they now know or believe exist with respect to Released Claims, but that it is their

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intention to hereby fully, finally, and forever settle and release all of the Released Claims known

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or unknown, suspected or unsuspected, that they have against the Released Parties. In

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furtherance of such intention, the release herein given by the Settlement Class Members to the

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Released Parties shall be and remain in effect as a full and complete general release

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notwithstanding the discovery or existence of any such additional different claims or facts.

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Each of the Parties expressly acknowledged that it has been advised by its attorney of the

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contents and effect of Section 1542, and with knowledge, each of the Parties has expressly

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waived whatever benefits it may have had pursuant to such section. Settlement Class
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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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Members are not releasing any claims for personal injury. Plaintiff has acknowledged, and
the Settlement Class Members shall be deemed by operation of the Final Order and
Judgment to have acknowledged, that the foregoing waiver was separately bargained for and
a material element of the settlement of which this release is a part.
31.

Members of the Settlement Class who have opted out of or sought exclusion

from the settlement by the date set by the Court do not release their claims and will not
obtain any benefits of the settlement. The following individuals sought exclusion from the
settlement class: Grace Agustin, John Andre, Junar M. Barcena, Rochelle Barker, Rowel
Bellezo, Dave Booker, Timothy Falloni, Anthony Ford, Jim Haack, Adam Harper, Chris
Konieczny, Nicholas Kostakis, Matt Lahr, Nikos Markellos, Carly Nichols, Jay Puyot, Kyle
Robertson, Sean Root, John Sampiere, and Elpedio Solon.
32.

The Court orders that, upon the Effective Date, the Settlement Agreement and

Release shall be the exclusive remedy for any and all Released Claims of Settlement Class
Members. The Court thus hereby permanently bars and enjoins Plaintiff, all Settlement
Class Members, and all persons acting on behalf of, or in concert or participation with such
Plaintiff or Settlement Class Members (including but not limited to the Releasing Parties),
from: (a) filing, commencing, asserting, prosecuting, maintaining, pursuing, continuing,
intervening in, or participating in, or receiving any benefits from, any lawsuit, arbitration, or
administrative, regulatory or other proceeding or order in any jurisdiction based upon or
asserting any of the Released Claims; (b) bringing a class action on behalf of Plaintiff or
Settlement Class Members, seeking to certify a class that includes Plaintiff or Settlement
Class Members, or continuing to prosecute or participate in any previously filed and/or
certified class action, in any lawsuit based upon or asserting any of the Released Claims.
33.

Neither the Settlement Agreement and Release, nor any of its terms and

provisions, nor any of the negotiations or proceedings connected with it, nor any of the
documents or statements referred to therein, nor any of the documents or statements
generated or received pursuant to the claims administration process, shall be:

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16
[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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(a)

offered by any person or received against CytoSport as evidence or

construed as or deemed to be evidence of any presumption, concession, or admission by
CytoSport of the truth of the facts alleged by the Plaintiff or any Settlement Class Member
or the validity of any claim that has been or could have been asserted in the Action or in any
litigation, or other judicial or administrative proceeding, or the deficiency of any defense
that has been or could have been asserted in the Action or in any litigation, or of any
liability, negligence, fault or wrongdoing of CytoSport;
(b)

offered by any person or received against CytoSport as evidence of a

presumption, concession or admission of any fault, misrepresentation or omission with
respect to any statement or written document approved or made by CytoSport or any other
wrongdoing by CytoSport;
(c)

offered by any person or received against CytoSport or as evidence of a

presumption, concession, or admission with respect to any default, liability, negligence,
fault, or wrongdoing, or in any way interpreted, construed, deemed, invoked, offered,
received in evidence, or referred to for any other reason against any of the settling parties, in
any civil, criminal, or administrative action or proceeding; provided, however, that nothing
contained in this paragraph shall prevent the Settlement Agreement and Release (or any
agreement or order relating thereto) from being used, offered, or received in evidence in any
proceeding to approve, enforce, or otherwise effectuate the settlement (or any agreement or
order relating thereto) or the Final Order and Judgment, or in which the reasonableness,
fairness, or good faith of the parties in participating in the settlement (or any agreement or
order relating thereto) is an issue, or to enforce or effectuate provisions of the settlement, the
Final Order and Judgment, or the Claim Form as to CytoSport, Plaintiff, or the Settlement
Class Members; or
(d)

offered by any person or received against the Plaintiff or any other class

representative as evidence or construed as or deemed to be evidence that any of their claims.
Notwithstanding the foregoing, CytoSport may file the Settlement Agreement and Release,

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17
[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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this Final Order, and/or any of the documents or statements referred to therein in support of
any defense or claim that is binding on and shall have res judicator, collateral estoppel,
and/or preclusive effect in all pending and future lawsuits or other proceedings maintained
by or on behalf of Plaintiff and/or any other Settlement Class Members, and each of them,
as well as their heirs, executors, administrators, successors, assigns, and/or any other of the
Releasing Parties.
34.

The Court has jurisdiction to enter this Final Order. Without in any way

affecting the finality of this Final Order, this Court expressly retains exclusive and
continuing jurisdiction over the Parties, including the Settlement Class, and all matters
relating to the administration, consummation, validity, enforcement and interpretation of the
Settlement Agreement and Release and of this Final Order, including, without limitation, for
the purpose of:
(a)

enforcing the terms and conditions of the Settlement Agreement and

Release and resolving any disputes, claims or causes of action that, in whole or in part, are
related to or arise out of the Settlement Agreement and Release, and/or this Final Order
(including, without limitation: whether a person or entity is or is not a Settlement Class
Member; whether claims or causes of action allegedly related to this Action are or are not
barred or released by this Final Order; and whether persons or entities are enjoined from
pursuing any claims against CytoSport);
(b)

entering such additional orders, if any, as may be necessary or

appropriate to protect or effectuate this Final Order and the Settlement Agreement and
Release (including, without limitation, orders enjoining persons or entities from pursuing
any claims against CytoSport), or to ensure the fair and orderly administration of the
settlement; and
(c)

entering any other necessary or appropriate orders to protect and

effectuate this Court’s retention of continuing jurisdiction over the Settlement Agreement
and Release, the settling Parties, and the Settlement Class Members.

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18
[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW

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35.

Without further order of the Court, the settling Parties may agree to reasonably

necessary extensions of time to carry out any of the provisions of the Settlement Agreement
and Release.
36.

This Action is hereby dismissed with prejudice and without costs as against

CytoSport and the Released Parties.
37.

In the event that the Effective Date does not occur, certification shall be

automatically vacated and this Final Order, and all other orders entered and releases delivered in
connection herewith, shall be vacated and shall become null and void.
38.

Objector Theodore Frank’s administrative motion to file a supplemental

declaration is GRANTED. The Court has reviewed the supplemental declaration and considered
it along with Mr. Frank’s other submissions.
39.

Judgment will enter separately.

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IT IS SO ORDERED, this 1st day of July, 2014.

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________________________________________
THE HONORABLE CLAUDIA WILKEN
UNITED STATES DISTRICT COURT JUDGE

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[PROPOSED] ORDER GRANTING FINAL APPROVAL TO CLASS ACTION SETTLEMENT AND APPLICATION FOR
ATTORNEYS’ FEES, COSTS AND INCENTIVE AWARDS; GRANTING OBJECTOR’S ADMINISTRATIVE MOTION
Case No.: 4:11-cv-03532-CW