Baumann Farms, LLP et al v. Yin Wall City Inc et al

Filing 66

PRELIMINARY APPROVAL ORDER FOR CLASS ACTION SETTLEMENT signed by Magistrate Judge William E Duffin on 9/14/2018 granting 62 Joint Motion Preliminary Approval of Class Action Settlement. See Decision and Order for Details. (cc: all counsel) (lz)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
BAUMANN FARMS, LLP
a Wisconsin limited liability partnership;

GLENN HEIER; and AARON KAISER,
Plaintiffs,

v.

Case No. 16-CV-605

YIN WALL CITY, INC., an Illinois
corporation; SUT I. FONG; CHEONG SAT O;
YIN WALL CITY, DALLAS, INC.,
a Texas Corporation,

Defendants.
YIN WALL CITY, INC. (Illinois),
YIN WALL CITY, INC. (Texas), and
YIN WALL CITY DALLAS, INC.,
Counterclaim and

Third-Party Plaintiffs,

v.
BAUMANN FARMS, LLP; GLENN HEIER;

and AARON KAISER,

Counterclaim Defendants
and
GINSENG BOARD OF WISCONSIN, INC.;

THOMAS HACK, JOE HEIL and KURT BAUMANN,
Third-Party Defendants.

__________________________________________________________________
DECISION AND ORDER
On August 22, 2018, the Parties filed a Joint Motion for Preliminary Approval of
Class Action Settlement. (ECF No. 62.) The court has read and considered the

Settlement Agreement, the exhibits attached thereto, and the declarations in support of
preliminary approval of the settlement.
IT IS HEREBY ORDERED:
1). The parties’ Joint Motion for Preliminary Approval of Class Action Settlement
(ECF No. 62) is granted. Resolution of class action litigation by settlement is favored by
the federal courts. Isby v. Bayh, 75 F.3d 1191, 1196 (7th Cir. 1996). Federal Rule of Civil
Procedure 23 allows a court to certify a class conditionally or provisionally, for
purposes of effectuating a settlement. In re General Motors Corp. Pick-Up Truck Fuel Tank
Prods. Liability Litig., 55 F.3d 768, 793-794 (3d Cir. 1995).
A Federal Rule of Civil Procedure 23(b)(3) class action may only be approved if:
(1) the individual class members are afforded a new opportunity to request exclusion
from the settlement; (2) a hearing has been conducted; and (3) the court finds that the
settlement is fair, reasonable, and adequate. Fed. R. Civ. P. 23(e). In making this
determination, courts “must weigh the probabilities of victory or defeat as indicated by
the legal or factual situation presented and determine whether the compromise, taken
as a whole, is in the best interests” of the class members. United Founders Life Ins. Co. v.
Consumers National Life Ins. Co., 447 F.2d 647, 655 (7th Cir. 1971) (internal quotations and
citation omitted). Other factors considered are the complexity, expense, and likely
duration of the litigation; reaction of the class to the settlement; the stage of the
proceedings and the amount of discovery complete; the risks of establishing liability;
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the risks of establishing damages; the ability of the defendants to withstand greater
judgment; and the range of reasonableness of the settlement funds to a possible
recovery in light of all the attendant risks of litigation. City of Detroit v. Grinnell Corp.,
495 F.2d 448, 463 (2d Cir. 1974).
The terms of the Stipulated Settlement Agreement and Release (“SAR”) entered
into between the parties (ECF No. 62-1) are fair and reasonable. Real disputes exist
between the parties as to whether liability exists in this case and, if liability were
proven, the extent of Plaintiffs’ damages and the proof which must be presented before
Defendants would be required to disgorge profits arising from the sales at issue.
Additionally, Defendants have raised fifteen (15) affirmative defenses to Plaintiffs’
claims, the establishment of any one of which could bar recovery to Plaintiffs, in whole
or in part. Finally, as individuals, Fong and Sat O. have limited resources from which to
satisfy any potential judgment. In light of these risks, and the costs associated with fully
litigating these issues, the court finds the overall settlement to be reasonable and fair for
all class members.
Further, upon review of the Declarations submitted by counsel for the parties
(ECF Nos. 63, 64), the court is satisfied that the settlement reached by the parties
culminated from a long negotiation process, including mediation with Magistrate Judge
Gorence, and that said negotiations were conducted on an arms-length basis
throughout, between two experienced trial counsel.
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The SAR provides a minimum payment of approximately $350 to each member
of the Settlement Class, which the court finds to be adequate and reasonable given the
claims presented and the evidence produced during discovery. To the extent
individuals opt out of the settlement, such additional funds will be divided among the
remaining members of the Settlement Class. None of the $160,000.00 in settlement funds
will revert to Defendants.
2). Consistent with the court’s prior class certification (see ECF No. 48 at 11), the
Settlement Class is defined as:
[A]ll individuals and entities engaged in the business of cultivating ginseng in
the State of Wisconsin who have registered as ginseng growers with Wisconsin’s
DATCP as mandated by Wis. Stats. § 94.50(2), during the calendar years 2010
through 2015, excluding Certified Class members who have previously asked to
be excluded from the Class, defendants, and all officers, directors, employees,
and agents of defendants. 1
3). Because of the limited and known size of the Settlement Class, and Class
Counsel’s prior experience of mailing the initial Notice of Class Action to the Certified
Class members, the settlement shall be administered by Class Counsel, Attorney
Michael T. Hopkins.
4). A Notice of Proposed Settlement (ECF No. 62-2) shall be provided to the
Settlement Class (as identified through the records obtained by Class Counsel from

Of the 288 registered growers previously provided notice of this litigation as potential Certified Class
members, 6 growers have moved with no forwarding address on file, 3 growers had opted out of class
participation, and 36 were only registered growers in 2016 or 2017, leaving a Settlement Class of 243
members.
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DATCP), via the United States Postal Service, First Class postage prepaid, on or before
October 15, 2018. The Notice of Proposed Settlement shall include reference to a “Ginseng
Class Action Settlement Webpage” (URL: www.ip-lit.us/ginseng-ywc), which shall
contain downloadable .pdf copies of this Order; the SAR; the Parties’ Joint Motion for
Approval of Settlement; Class Counsel's Motion for an Award of Attorney's Fees and
Costs; the Class Representatives’ Motion for a Participation Award; and any other
document or matter hereinafter required by the Court. Said webpage shall be operational
as of the date the Notice of Proposed Settlement is mailed.
The Notice of Proposed Settlement shall advise Settlement Class members that any
Lanham Act claims they may wish to pursue in a separate lawsuit filed after July 2018,
based upon the facts or claims alleged in this litigation, may be barred by the applicable
statutes of limitations in Illinois and Wisconsin, and that expert legal advice should be
obtained before deciding to opt-out of this settlement.
5). Class Counsel's Motion for an Award of Attorney's Fees and Costs, and the
Class Representatives’ Motion for a Participation Award shall be filed (and posted on
Ginseng Class Action Settlement Webpage) on or before October 15, 2018.
6). Any Settlement Class member wishing not to participate in the proposed
settlement may opt-out of the settlement by sending a written notice of non-participation
to Class Counsel, via U.S. Mail, email, or facsimile transmission, no later than November
14, 2018 (the “opt-out date”). Any such notice postmarked on or before the opt-out date
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shall be considered timely. Settlement Class members who timely opt out of the
Settlement: (a) will not be a part of the Settlement; (b) will have no right to receive any
benefits under the Settlement; (c) will not be bound by the terms of the Settlement; and
(d) will not have any right to object to the terms of the Settlement or be heard at the
fairness hearing. Any opt-out notice not timely received by Class Counsel shall not be
considered by the court.
7). Additionally, any Settlement Class member, on his or her own, or through an
attorney hired at his or her own expense, may object to the terms of the Settlement; and/or
may object to the proposed attorney fee or class representative participation awards.
To be effective, any such objection must be timely served on Class Counsel, via
U.S. Mail, email, or facsimile transmission, no later than November 14, 2018 (the
“objection date”). Any such notice postmarked on or before the objection date shall be
considered timely. Additionally, objections must contain all of the following information
to be considered by the court:
(a).

A reference at the beginning to this case, Baumann Farms, LLP, et al.

v. Yin Wall City, Inc., et al., Case No. 2:16-cv-605;
(b).

The objector's full name, address, and telephone number;

(c).

A written statement of all grounds for the objection, accompanied by

any legal support for such objection;

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(d).

Copies of any papers, briefs, or other documents upon which the

objection is based;
(e).

A list of all persons who will be called to testify in support of the

objection; and
(f).

A statement of whether the objector intends to appear at the fairness

hearing. If the objector intends to appear at the fairness hearing through counsel,
the objection must also state the identity of all attorneys representing the objector
who will appear at the fairness hearing.
8). The Final Fairness Hearing shall be conducted on January 23, 2018, at 9:30 am.
9). In the event the court approves this settlement on or after the Final Fairness
Hearing, net settlement proceeds will be paid to Settlement Class members on a pro rata
basis, regardless of any one member’s relative ginseng production during the period of
time (2010-2015) during which Defendants were selling ginseng in packages which
plaintiffs claim were mislabeled. This method of distribution would result in the
complete disbursement of settlement funds, mooting any discussion of potential cy pres
awardees. The court finds that this method of distribution will be fair and reasonable to
all Settlement Class members, and is in conformity with the damages claims made by
Plaintiffs in this litigation on behalf of all class members.
10). In the event the Court does not approve this settlement on or after the Final
Fairness Hearing, this case shall proceed as if no settlement had been attempted.
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SO ORDERED.
Dated at Milwaukee, Wisconsin this 14th day of September, 2018.

_________________________
WILLIAM E. DUFFIN
U.S. Magistrate Judge

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