Dremak v. Iovate Health Sciences Group, Inc. et al

Filing 284

ORDER Granting Request for Clarification; Denying Motion to Strike Objection to the Extent that it Argues Lack of Standing due to Failure to Submit Claim Form. Signed by Judge Barry Ted Moskowitz on 11/12/2013.(rlu)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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CASE NO. 09md2087 BTM (KSC)

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IN RE HYDROXYCUT
MARKETING AND SALES
PRACTICES LITIGATION

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____________________________

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ANDREW DREMAK, on Behalf of
Himself, All Others Similarly
Situated and the General Public,

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ORDER GRANTING REQUEST
FOR CLARIFICATION; DENYING
MOTION TO STRIKE
OBJECTION TO THE EXTENT
THAT IT ARGUES LACK OF
STANDING DUE TO FAILURE
TO SUBMIT CLAIM FORM

Plaintiff,

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CASE NO. 09cv1088 BTM(KSC)

v.
IOVATE HEALTH SCIENCES
GROUP, INC., et al.,
Defendants.

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Plaintiff Andrew Dremak has requested clarification from the Court

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regarding whether the Court has rejected Plaintiff’s argument that Objector

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Michelle Rodriguez lacks standing because she did not submit a claim form. The

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Court GRANTS Plaintiff’s request for clarification and DENIES Plaintiff’s motion

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09md2087

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to strike Rodriguez’s objection to the extent that Plaintiff relies on the argument

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that Rodriguez lacks standing due to her failure to submit a claim form.

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As pointed out by Plaintiff, the Ninth Circuit has held that an objector who

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does not participate in a settlement lacks standing to challenge class counsel’s

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attorney’s fees. See Rodriguez v. Disner, 688 F.3d 645, 660 n. 11 (9th Cir.

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2012); Knisley v. Network Assoc., Inc., 312 F.3d 1123, 1128 (9th Cir. 2002). The

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Ninth Circuit explains that such an objector lacks standing because “without a

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stake in the common fund pot, a favorable outcome would not redress their

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injury.” Rodriguez, 688 F.3d at 660, n.11.

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Here, however, Rodriguez not only challenges the attorney’s fees but also

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objects to the product component of the settlement, the monetary component of

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the settlement, the restriction to one $25 payment or one Product Bundle without

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proof of purchase, and the cy pres provisions. The Court finds that although

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Rodriguez does not have standing to object to the attorney’s fees, and may not

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have standing to object to the product component, monetary component, or the

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proof of purchase requirements, she does have standing to object to the cy pres

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distribution (if she purchased a Hydroxycut Product between May 9, 2006 and

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May 1, 2009).

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The cy pres doctrine allows a court to distribute unclaimed or non-

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distributable portions of a class action settlement fund to indirectly benefit the

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entire class. Six Mexican Workers v. Ariz.Citrus Growers, 904 F.2d 1301, 1305

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(9th Cir. 1990). When employing the cy pres doctrine, unclaimed funds should

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be put to their next best use, e.g., for “the aggregate, indirect, prospective benefit

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of the class.” Nachshin v. AOL, LLC, 663 F.3d 1034, 1038 (9th Cir. 2011)

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(quoting Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 436 (2d Cir.

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2007)). Thus, all members of the class, not just members participating in the

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settlement, have an interest in the cy pres distribution.

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09md2087

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Even though Rodriguez did not submit a claim form, she may still benefit

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from the cy pres distribution of remaining funds and has standing to object to the

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cy pres provisions if she establishes that she is a member of the Settlement

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Class. Accordingly, the Court will not strike Rodriguez’s objections on the ground

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that she did not file a claim to participate in the settlement distribution.

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IT IS SO ORDERED.
DATED: November 12, 2013
BARRY TED MOSKOWITZ, Chief Judge
United States District Court

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09md2087