Ang v. Bimbo Bakeries USA, Inc.

Opinion

1 2 3 6 7 ALEX ANG, et al., Case No. 13-cv-01196-HSG

8 Plaintiffs, ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR 9 v. FINAL APPROVAL OF CLASS ACTION SETTLEMENT, 10 BIMBO BAKERIES USA, INC., ATTORNEYS’ FEES, AND INCENTIVE AWARDS 11 Defendant. Re: Dkt. No. 241 12

13 14 Pending before the Court is the parties’ joint motion for final approval of class action 15 settlement and for attorneys’ fees, costs, and for an incentive award for the two named Plaintiffs. 16 See Dkt. No. 241. The Court held a final fairness hearing on August 27, 2020. See Dkt. No. 248. 17 For the reasons detailed below, the Court GRANTS final approval. The Court also GRANTS IN 18 PART and DENIES IN PART Plaintiffs’ request for attorneys’ fees, costs, and incentive awards. 20 A. Factual Background 21 Plaintiffs Alex Ang and Lynn Streit bring this consumer class action against Defendant 22 Bimbo Bakeries, Inc. alleging that Defendant misbranded its baked goods. See generally Dkt. No. 23 40 (“SAC”). Plaintiffs allege that Defendant owns and has distributed products under various 24 brands, including Arnold, Ball Park, Bimbo, Boboli, Brownberry, Earthgrains, Entenmann’s, 25 Francisco, Freihofer’s, Marinela, Mrs. Baird’s, Oroweat, Sara Lee, Stroehmann, Thomas’, and Tia 26 Rosa. See id. at ¶ 1. According to the complaint, many of Defendant’s products are sold with 27 false, misleading, and deceptive labeling. Specifically, Plaintiffs allege that they purchased food 1 Association’s “Heart-Check Mark” without acknowledging that the mark is a paid endorsement; 2 (2) labeled products as a “good” or “excellent source of whole grain”; (3) labeled products as 3 “bread,” even though they contained added coloring; and (4) labeled products as “100% Whole 4 Wheat,” even though they were made with non-whole wheat flour. See id. at ¶ 4; see also Dkt. 5 No. 58 (Order Granting in Part Motion to Dismiss Amended Complaint, narrowing products at 6 issue). 7 Based on these allegations, Plaintiffs sought injunctive relief and statutory damages, 8 alleging violations of California’s Unfair Competition Law (“UCL), Cal. Bus. & Prof. Code 9 §§ 17200 et seq.; the California False Advertising Law (“FAL”), Cal. Bus. & Prof. Code §§ 17500 10 et seq.; and the Consumers Legal Remedies Act (“CLRA”), Cal. Civil Code §§ 1750 et seq. See 11 SAC at ¶¶ 32–40. Plaintiffs also sought to represent four separate classes corresponding to these 12 violations that include all California consumers who bought the same products (or products 13 substantially similar to the products that they purchased) at any time from March 18, 2009, to the 14 present. See Dkt. No. 102. 15 B. Procedural History 16 This case has a lengthy history. Plaintiffs initially filed this action on March 18, 2013. See 17 Dkt. No. 1. Plaintiffs filed the operative second amended complaint on November 4, 2013. See 18 Dkt. No. 40. On March 13, 2014, the Court granted in part Defendant’s motion to dismiss the 19 SAC, narrowing the claims for which Plaintiffs could seek relief. See Dkt. No. 58. On March 31, 20 2016, the Court stayed this action pending the resolution of third-party appeals involving legal 21 questions at issue in this case. Dkt. No. 164. On January 5, 2018, in response to an order to show 22 cause, Dkt. No. 171, the parties jointly moved to lift the stay, Dkt. No. 172, and the Court granted 23 the request, Dkt. No. 174. On August 31, 2018, the Court granted Plaintiffs’ motion for class 24 certification as to all four classes under Federal Rule of Civil Procedure 23(b)(2). See Dkt. No. 25 186 (“Class Certification Order”). However, the Court denied certification of a damages class 26 under Rule 23(b)(3). Id. at 18, 28. The Court appointed named Plaintiffs as the Class 27 Representatives and appointed Fleischman Law Firm, PLLC and Barrett Law Group, P.A. as co- 1 29. 2 On July 31, 2019, the parties engaged in an all-day mediation. See Dkt. No. 217 at 4. 3 Through these efforts, the parties reached settlement, formally executing the settlement agreement 4 in December 2019. Id.; see also Dkt. No. 217-2, Ex. 1. Plaintiffs then filed an unopposed motion 5 for preliminary settlement approval on December 13, 2019. See Dkt. No. 217. 6 During the hearing on the motion for preliminary settlement approval, the Court raised 7 several concerns about the scope of the proposed release and the lack of notice to absent class 8 members. See Dkt. No. 225. As initially drafted, the release contained claims that the Court did 9 not certify in its Class Certification Order. See id. at §§ 1.2, 8.2. Moreover, although absent class 10 members would be giving up significant legal rights under the proposed settlement, the parties 11 argued that notice was not required because of the nature of the injunctive relief. See Dkt. No. 217 12 at 7–8. The Court provided the parties with several opportunities to address these concerns. See 13 Dkt. Nos. 223, 227, 230. However, the parties appeared reluctant to provide absent class members 14 with meaningful notice of the terms of the settlement, and the Court ultimately denied the motion 15 for preliminary approval on this basis. See Dkt. No. 232. On April 17, 2020, the parties filed a 16 renewed motion for preliminary approval, which included a revised settlement agreement and a 17 revised notice plan. See Dkt. No. 235. As discussed in more detail in Section II.A.ii.b.1 below, 18 the parties agreed to issue a press release about the settlement and provide further notice on Class 19 Counsel and Defendant’s websites. Id. The Court granted the renewed motion on April 28, 2020. 20 See Dkt. No. 236. Following the final fairness hearing, and at the Court’s request, Defendant filed 21 a supplemental declaration attaching the press release. See Dkt. No. 249. 22 C. Revised Settlement Agreement 23 In response to concerns that the Court raised regarding the scope of the release, the parties 24 entered into a revised settlement agreement. See Dkt. No. 235-2, Ex. A (“SA”). The key terms of 25 the parties’ revised settlement are as follows: 26 Class Definition: The Settlement Class mirrors the Court’s Class Certification Order, and 27 is defined as: any [Defendant] products identified in the Class Certification Order. 1 2 SA § 1.7 3 Settlement Benefits: The settlement agreement provides for injunctive relief, explaining 4 that Defendant has made the following changes to product labeling and formulations: 5 Product Name Changes Made 6 Oroweat Dark Rye Bread • Color removed 7 Oroweat Sweet Hawaiian Bread • Color removed Bimbo Original Toasted Bread • Color removed 8 Bimbo Double Fiber Toasted Bread • Color removed 9 Thomas’ Cinnamon Raisin Swirl Toasting • Color removed Bread 10 Thomas’ 100% Whole Wheat Bagels • Soy flour removed from ingredients list Thomas’ 100% Whole Wheat English Muffins • Soy flour removed from ingredients list 11 Thomas’ Plain Bagel Thins • American Heart Association (“AHA”) Heart Check Mark removed 12 Thomas’ Everything Bagel Thins • AHA Heart Check Mark removed 13 Bimbo 100% Whole Wheat Tortillas • Discontinued Sahara 100% Whole Wheat Pita Pockets • Soy flour removed from ingredients list 14 • Product discontinued 15 Thomas’ 100% Whole Wheat Mini Bagels • Soy flour removed from ingredients list • Product discontinued 16 Thomas’ 100% Whole Wheat Bagel Thins • AHA Heart Check Mark removed • Soy flour removed from ingredients list 17 • Product discontinued 18 Sara Lee 100% Whole Wheat Bread • Soy flour removed from ingredients list (Classic 100% Whole Wheat Bread) • “Good source of whole grain” claim 19 removed • Brand was divested and is no longer 20 controlled by BBUSA in California 21 Sara Lee Soft & Smooth Whole Grain White • Good source of whole grain” claim Bread removed 22 • Brand was divested and is no longer controlled by BBUSA in California 23 Sara Lee Soft & Smooth 100% Whole Wheat • “Good source of whole grain” claim 24 Bread removed • Brand was divested and is no longer 25 controlled by BBUSA in California 26 27 See id. at § 4.4. Defendant further agrees that for a period of two years from the effective date of 1 to these products’ labels as soon as practicable as they relate to: 2 • For the “Whole Grain” Products: Any labeling statement that a product is a “good source 3 of whole grain” or an “excellent source of whole grain”; 4 • For the “100% Whole Wheat” Products: Any change to the product formulation to include 5 “soy flour” as an ingredient; 6 • For the “Added Coloring” Products: Any change to the product formulation to include 7 “coloring” as an ingredient. 8 See SA at § 4.7. Class Counsel will then have 15 days from the date of the notice to inform 9 Defendant of any objection to that labeling change. Id. at § 4.8. 10 Release: The parties agree to release:

11 any and all causes of action, suits, claims, liens, demands, judgments, indebtedness, costs, damages, obligations, attorneys’ fees (except as 12 provided for in this Agreement), losses, claims, controversies, liabilities, demands and all other legal responsibilities in any form or 13 nature, whether known or unknown, asserted or unasserted, under or pursuant to any statute, regulation, common law or equity, which have 14 been brought or could have been brought, are currently pending or were pending, or are ever brought in the future (1) on behalf of the 15 Class, for injunctive, declaratory or other equitable relief that arise out of or in any way relate, directly or indirectly, to the Injunctive 16 Relief Claims1 prior to the Settlement Effective Date and/or (2) on behalf of Plaintiffs, that arise out of or in any way relate, directly or 17 indirectly, to the Individual Claims2 prior to the Settlement Effective Date. Nothing in this Agreement will be considered a waiver of any 18 claims by Plaintiffs or Class Members that arise entirely after the Effective Date. Plaintiffs and Class Counsel expressly promise and 19 warrant that they are not aware of any such claims at this time of this Settlement Agreement. 20

21 SA at § 8.1. Following entry of final judgment, all class members:

22 shall release and forever discharge [Defendant] . . . from any and all manner of action, causes of action, claims, demands, rights, suits, 23 obligations, debts, contracts, agreements, promises, liabilities, damages, charges, losses, costs, expenses and fees, of any nature 24 whatsoever, known or unknown, in law or equity, fixed or contingent, for injunctive, declaratory or other equitable relief relating to or 25 arising out of the Injunctive Relief Claims. 26 1 “‘Injunctive Relief Claims’ means any Claims for injunctive, declaratory or other equitable relief 27 that were certified for class treatment in the Class Certification Order.” SA at § 1.14. 1 SA at § 8.2. And following entry of final judgment, the named Plaintiffs:

2 shall release and forever discharge [Defendant] . . . from any and all manner of action, causes of action, claims, demands, rights, suits, 3 obligations, debts, contracts, agreements, promises, liabilities, damages, charges, losses, costs, expenses and fees, of any nature 4 whatsoever, known or unknown, in law or equity, fixed or contingent, relating to or arising out of the Individual Claims. 5 6 SA at § 8.3. In addition, the parties:

7 expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights and benefits of section 1542 of the California 8 Civil Code, and any other similar provision under federal or state law. Section 1542 provides: 9 A GENERAL RELEASE DOES NOT EXTEND TO 10 CLAIMS, THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN 11 HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR 12 HER, WOULDHAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR 14 Id. at § 8.4. 15 Settlement Payment: Defendant agrees that as part of the settlement, it shall make 16 available $325,000 that must be used, pending Court approval, to compensate Class Counsel for 17 attorneys’ fees and costs, and for incentive payments to the Class Representatives for their service 18 in this case. SA at § 4.14. No monetary relief is available to the class. 19 Incentive Award: Plaintiffs as Class Representatives may apply for incentive awards of no 20 more than $10,000 each, subject to Court approval. SA at § 4.14. 21 Attorneys’ Fees and Costs: Class Counsel may file an application for attorneys’ fees not to 22 exceed $325,000, subject to Court approval. SA at § 4.14. 24 A. Final Settlement Approval 25 i. Class Certification 26 Here, the settlement class is coextensive with the Class Certification Order, including “[a]ll 27 persons or entities who or that made purchases in California of any [Defendant] products 1 Court’s reasoning have changed since the Court’s Class Certification Order and since the Court 2 preliminarily approved the settlement on April 28, 2020, this order incorporates by reference its 3 prior analysis under Rules 23(a) and (b) as set forth in the Class Certification Order. See Dkt. No 4 186. 5 ii. The Settlement 6 a. Legal Standard 7 “The claims, issues, or defenses of a certified class may be settled . . . only with the court’s 8 approval.” Fed. R. Civ. P. 23(e). The Court may finally approve a class settlement “only after a 9 hearing and on finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2); Officers 10 for Justice v. Civil Serv. Comm’n of the City and County of San Francisco, 688 F.2d 615, 625 (9th 11 Cir. 1982) (“The district court’s role in evaluating a proposed settlement must be tailored to fulfill 12 the objectives outlined above. In other words, the court’s intrusion upon what is otherwise a 13 private consensual agreement negotiated between the parties to a lawsuit must be limited to the 14 extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or 15 overreaching by, or collusion between, the negotiating parties . . . ”). To assess whether a 16 proposed settlement comports with Rule 23(e), the Court “may consider some or all” of the 17 following factors: (1) the strength of plaintiff’s case; (2) the risk, expense, complexity, and likely 18 duration of further litigation; (3) the risk of maintaining class action status throughout the trial; 19 (4) the amount offered in settlement; (5) the extent of discovery completed, and the stage of the 20 proceedings; (6) the experience and views of counsel; (7) the presence of a governmental 21 participant; and (8) the reaction of the class members to the proposed settlement. Rodriguez v. 22 West Publ’g Corp., 563 F.3d 948, 963 (9th Cir. 2009); see also Hanlon, 150 F.3d at 1026. “The 23 relative degree of importance to be attached to any particular factor” is case specific. Officers for 24 Justice, 688 F.2d at 625. 25 In addition, “[a]dequate notice is critical to court approval of a class settlement under Rule 26 23(e).” Hanlon, 150 F.3d at 1025. As discussed below, the Court finds that the proposed 27 settlement is fair, adequate, and reasonable, and that Class Members received adequate notice. 1 b. Analysis 2 1. Adequacy of Notice 3 Under Federal Rule of Civil Procedure 23(e), the Court “must direct notice in a reasonable 4 manner to all class members who would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1). The 5 Court has “broad power and discretion vested in it by [Rule 23]” to determine the contours of 6 appropriate class notice. See Reiter v. Sonotone Corp., 442 U.S. 330, 345 (1979). Although Rule 7 23 requires that reasonable efforts be made to reach all class members, it does not require that each 8 class member actually receive notice. See Silber v. Mabon, 18 F.3d 1449, 1454 (9th Cir. 1994) 9 (noting that the standard for class notice under Rule 23(c)(2)(B) is “best practicable” notice, not 10 “actually received” notice). Moreover, “[i]f the names and addresses of class members cannot be 11 determined by reasonable efforts, notice by publication is sufficient to satisfy the requirements of 12 the due process clause and Rule 23.” Jermyn v. Best Buy Stores, L.P., No. 08 CIV. 00214 CM, 13 2010 WL 5187746, at *3 (S.D.N.Y. Dec. 6, 2010) (citing Mullane v. Cent. Hanover Bank & Trust 14 Co., 339 U.S. 306, 317–18 (1950)). 15 The Court finds that the notice and notice plan previously approved by the Court was 16 implemented and complies with Rule 23. See Dkt. No. 236 at 11–12. The Court ordered the 17 parties to: (1) issue a joint press release regarding the settlement; (2) post the proposed notice and 18 key case documents on Class Counsel’s public websites; (3) post the proposed notice on the 19 “Media Inquiries” section of Defendant’s public website, where it generally posts product recall 20 information, with links to key case documents; and (4) in accordance with the Class Action 21 Fairness Act, notify the United States and California Attorneys General of the settlement. Id. The 22 notice was published by the May 29, 2020, deadline, as anticipated. See Dkt. No. 241 at 7–8; see 23 also Dkt. No. 238. 24 The Court notes that Mr. Edward W. Orr objected to the motion for final settlement 25 approval, and suggested that the parties failed to include the requisite notice on Defendant’s 26 website. See Dkt. Nos. 244, 245. However, the Court was able to confirm independently that 27 Defendant included a working link to the notice on its website. And during the hearing, defense 1 of the notice period.3 The Court acknowledges that the placement of the link could have been 2 more conspicuous on Defendant’s website. And were this the only notice to absent Class 3 Members, the Court likely would find it insufficient. Nevertheless, the parties also issued a press 4 release regarding the settlement on May 29, 2020, through GlobeNewswire, a global press release 5 distribution service, for distribution in California. See Dkt. No. 249 at ¶ 3, & Ex. A. It provided 6 the name of the lawsuit and case number; the nature of the parties’ settlement, including how the 7 settlement may affect Class Members’ rights; an explanation that Class Members may object to 8 the settlement and the date by which they may do so; the date of the final fairness hearing; and a 9 direct link to Defendant’s website, where people could go for more information, including case 10 documents. See id., Ex. A. The press release was distributed to various news outlets throughout 11 California, and was even picked up by some out-of-state news outlets. See id. at ¶¶ 4–6, & Exs. 12 B–C. The press release is also one of the first results when searching for “Bimbo Bakeries 13 Settlement” on Google search. See id. at ¶ 7. Although the precise reach of the press release is 14 unknown, GlobeNewswire estimated the potential reach of the press release as over 121 million 15 people. See id., Ex. B. In light of these facts, the Court finds that the parties have sufficiently 16 provided the best practicable notice to the Class Members. 17 2. Fairness, Adequacy, and Reasonableness 18 Having found the notice procedures adequate under Rule 23(e), the Court next considers 19 whether the entire settlement comports with Rule 23(e). 20 a. Strength of Plaintiffs’ Case and Litigation Risk 21 Approval of a class settlement is appropriate when plaintiffs must overcome significant 22 barriers to make their case. Chun-Hoon v. McKee Foods Corp., 716 F. Supp. 2d 848, 851 (N.D. 23 Cal. 2010). Courts “may presume that through negotiation, the Parties, counsel, and mediator 24 arrived at a reasonable range of settlement by considering Plaintiff’s likelihood of recovery.” 25 Garner v. State Farm Mut. Auto. Ins. Co., No. 08-cv-1365-CW, 2010 WL 1687832, at *9 (N.D. 26

27 3 Counsel also explained during the hearing that when they learned that Mr. Orr indicated that he 1 Cal. Apr. 22, 2010). Additionally, difficulties and risks in litigating weigh in favor of approving a 2 class settlement. Rodriguez, 563 F.3d at 966. “Generally, unless the settlement is clearly 3 inadequate, its acceptance and approval are preferable to lengthy and expensive litigation with 4 uncertain results.” Ching v. Siemens Indus., Inc., No. 11-cv-04838-MEJ, 2014 WL 2926210, at *4 5 (N.D. Cal. June 27, 2014) (quotations omitted). 6 The Court finds that the settlement is reasonable in light of the substantial risk Plaintiffs 7 would face in litigating the case given the nature of the asserted claims. Plaintiffs allege that 8 certain of Defendants’ products had misleading labels, intended to increase sales by implying that 9 they were healthier or of better quality than competing products. However, Defendant disagrees 10 and intended to show that its labels were not misleading and class members did not suffer injury. 11 Additionally, Defendant intended to argue that Plaintiffs lack standing to pursue injunctive relief 12 because they did not purchase the products that contained the allegedly misleading labels. See 13 Dkt. No. 241 at 13. In reaching a settlement, however, Plaintiffs have ensured at least a 14 moderately favorable recovery for the class. See Rodriguez, 563 F.3d at 966 (finding litigation 15 risks weigh in favor of approving class settlement). Accordingly, these factors weigh in favor of 16 approving the settlement. See Ching, 2014 WL 2926210, at *4 (favoring settlement to protracted 17 litigation). 18 b. Settlement Terms 19 The terms of the settlement are another factor weighing in favor of approval. In the Class 20 Certification Order, the Court did not certify any class for monetary damages, and were the case to 21 proceed to trial, the class could only recover injunctive relief. The settlement here includes 22 changing the labels and, in some instances, the ingredients, of several of Defendant’s baked goods. 23 See SA at §§ 4.4–4.8. Class Counsel will also be notified any time within the next two years if 24 Defendant makes a relevant change to their labels. Id. Given the scope of the certified classes, 25 therefore, this settlement accomplishes much if not all of what Plaintiffs could have achieved at 26 trial. This result falls within the range of reasonableness. See, e.g., In re Ferrero Litig., No. 11- 27 CV-00205-H-KSC, 2012 WL 2802051, at *4 (S.D. Cal. July 9, 2012), aff’d, 583 F. App’x 665 1 raised in Plaintiffs’ complaint . . . .”). 2 c. Reaction of Class Members 3 The reaction of the Class Members also supports final approval. “[T]he absence of a large 4 number of objections to a proposed class action settlement raises a strong presumption that the 5 terms of a proposed class settlement action are favorable to the class members.” Nat’l Rural 6 Telecomms. Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528–29 (C.D. Cal. 2004); In re Linkedin 7 User Privacy Litig., 309 F.R.D. 573, 589 (N.D. Cal. 2015) (“A low number of opt-outs and 8 objections in comparison to class size is typically a factor that supports settlement approval.”). 9 Here, the class notice, which was served in accordance with the method approved by the 10 Court, advised Class Members of the requirements to object to the settlement. Class notice was 11 posted on the websites and the press release issued by May 29, 2020, and Class Members had until 12 July 31, 2020, to file any objections. See Dkt. Nos. 236, 238. As noted above, only Mr. Orr filed 13 an objection. See Dkt. Nos. 244, 245. The Court finds that the minimal objections in comparison 14 to the size of the class indicate overwhelming support among the Class Members and weigh in 15 favor of approval. See, e.g., Churchill Village LLC v. Gen. Elec., 361 F.3d 566, 577 (9th Cir. 16 2004) (affirming settlement where 45 of approximately 90,000 class members objected); 17 Rodriguez v. West Publ. Corp., Case No. CV05–3222 R, 2007 WL 2827379, at *10 (C.D. Cal. 18 Sept. 10, 2007) (finding favorable class reaction where 54 of 376,301 class members objected). 19 d. Objections to the Settlement 20 “In determining whether to finally approve a class action settlement, the Court considers 21 whether there are any objections to the proposed settlement and, if so, the nature of those 22 objections.” Moore v. Verizon Commc’ns Inc., No. C 09-1823 SBA, 2013 WL 4610764, at *9 23 (N.D. Cal. Aug. 28, 2013). “The mere fact that there are objections to the settlement does not 24 necessitate disapproval; instead, the Court must evaluate the objections to determine whether they 25 suggest serious reasons why the proposed settlement might be unfair.” Nwabueze v. AT & T Inc., 26 No. C 09-01529 SI, 2013 WL 6199596, at *6 (N.D. Cal. Nov. 27, 2013). 27 As noted above, Mr. Orr first argued that notice was inadequate. See Dkt. Nos. 244, 245. 1 II.A.ii.b.1. Rule 23 only requires all reasonable efforts to direct notice to absent class members, and 2 not all class members must receive notice for it to be found adequate. See, e.g., Reiter, 442 U.S. at 3 345; Silber, 18 F.3d at 1454. Here, in addition to posting notice on Class Counsel’s and Defendant’s 4 website, the parties also issued a press release regarding the settlement that is estimated to have 5 reached approximately 121 million people. See Dkt. No. 249 at ¶ 3, & Ex. A–B. Counsel also 6 appears to have gone beyond what was required under Rule 23 and the Court’s preliminary approval 7 order by sending Mr. Orr physical copies of the relevant case documents. 8 From what the Court can discern, Mr. Orr also raised concerns that under the settlement, 9 absent Class Members would release monetary claims. However, the release in the amended 10 Settlement Agreement only includes injunctive relief claims. See SA at § 8.1. Absent class 11 members still retain their right to independently pursue claims for monetary relief. Thus, having 12 considered Mr. Orr’s objections in detail, the Court denies the objections and finds that they do not 13 require rejecting the settlement. 14 * * * 15 After considering and weighing the above factors, the Court finds that the settlement 16 agreement is fair, adequate, and reasonable, and that the settlement Class Members received 17 adequate notice. Accordingly, the motion for final approval of the class action settlement is 19 B. Attorneys’ Fees and Costs 20 In the same motion, Class Counsel asks the Court to approve an award of $325,000 in 21 attorneys’ fees and costs. See Dkt. No. 241 at 17–24. 22 i. Legal Standard 23 “In a certified class action, the court may award reasonable attorney’s fees and nontaxable 24 costs that are authorized by law or by the parties’ agreement.” Fed. R. Civ. P. 23(h). Here, 25 Plaintiffs brought claims under California law, including the UCL, FAL, and CLRA. They 26 therefore also seek attorneys’ fees under California law. Under the CLRA, “the court shall award 27 court costs and attorney’s fees to a prevailing plaintiff.” Cal. Civ. Code § 1780(e). And under 1 plaintiffs is proper if “(1) plaintiffs’ action has resulted in the enforcement of an important right 2 affecting the public interest; (2) a significant benefit, whether pecuniary or nonpecuniary, has been 3 conferred on the general public or a large class of persons; and (3) the necessity and financial 4 burden of private enforcement are such as to make the award appropriate.” Press v. Lucky Stores, 5 34 Cal. 3d 311, 317–18 (1983) (quotations omitted); Cal. Code Civ. P. § 1021.5. 6 In a case like this one involving state law claims, state law also governs the calculation of 7 attorneys’ fees. See Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1047 (9th Cir. 2002). The Court 8 may also look to federal authority for guidance in awarding attorneys’ fees. See Apple Computer, 9 Inc. v. Superior Court, 126 Cal. App. 4th 1253, 1264 n.4 (2005) (“California courts may look to 10 federal authority for guidance on matters involving class action procedures.”). Courts generally 11 apply the lodestar method in class actions governed by California law. See Lealao v. Beneficial 12 California, Inc., 82 Cal. App. 4th 19, 26 (Cal. Ct. App. 2000); see Meister v. Regents of Univ. of 13 California, 67 Cal. App. 4th 437, 448–49 (Cal. Ct. App. 1998) (“[T]he California Supreme Court 14 intended its lodestar method to apply to a statutory attorney’s fee award unless the statutory 15 authorization for the award provided for another method of calculation.”). Similarly, under federal 16 law, “in injunctive relief class actions, courts often use a lodestar calculation because there is no 17 way to gauge the net value of the settlement or any percentage thereof.” Hanlon, 150 F.3d at 18 1029. “Under the lodestar method, a court need not determine the ‘value’ of particular injunctive 19 relief because fees are calculated through an assessment of time expended on the litigation, 20 counsel’s reasonable hourly rate and any multiplier factors such as contingent representation or 21 quality of work.” In re Ferrero Litigation, 583 Fed. App’x 665, 668 (9th Cir.2014). Courts may 22 then reduce or enhance the lodestar by applying a multiplier to account for the complexity of the 23 action, as well as other factors such as the quality of representation and the risk of nonpayment. 24 Hanlon, 150 F.3d at 1029. 25 ii. Analysis 26 Class Counsel asserts that Plaintiffs are prevailing parties in this action because they 27 achieved their objective of addressing what they considered Defendant’s misleading labeling 1 completed in this action would be $987,531.73, based on 2,178 hours spent by seventeen lawyers 2 and paralegals in litigating this class action multiplied by counsel’s proposed hourly rates, as of 3 December 12, 2019, when they filed the motion for preliminary approval. See id. at 19–23; see 4 also Dkt. No. 241-1 through 24-8, Exs. 1–8. They also explain that they have incurred $89,456.65 5 in expenses. See Dkt. No. 241 at 19. However, Class Counsel has agreed to accept a reduced 6 lodestar of $325,000. See id. at 22. Class Counsel submitted declarations and provided charts that 7 document their hourly rates, the number of hours claimed, and the total fee request for each 8 attorney involved in the litigation. See Dkt. Nos. 24-2 through 24-8, Exs. 1–8. Their requested 9 fees represent approximately 33% of their lodestar. See Dkt. No. 241 at 22. 10 As an initial matter, the Court finds that Class Counsel’s lodestar calculation is inflated and 11 contains duplicative and unreasonable time. See Jankey v. Poop Deck, 537 F.3d 1122, 1132 (9th 12 Cir. 2008) (directing courts to exclude from a fee request any hours that are “excessive, redundant, 13 or otherwise unnecessary”). The Court notes that it has concerns that the case was overstaffed 14 with seventeen lawyers billing time, and that this led to inefficient or duplicative work. Class 15 Counsel’s block billing, however, obscures the potential extent of any inefficiency. Still, the 16 Court has found claims in the itemized billing records for significant time spent discussing the 17 case via intraoffice and administrative meetings, emails, and phone calls with co-counsel. The 18 Ninth Circuit has indicated that the Court has discretion to discount such time. See Terry v. City 19 of San Diego, 583 Fed. Appx. 786, 790–91 (9th Cir. 2014) (permitting reductions for time counsel 20 spent conferring among themselves and co-counsel editing each other’s briefs because this time 21 could be considered duplicative). The Court therefore finds that the lodestar should be reduced by 22 ten percent to account for this duplication. 23 Moreover, having reviewed the billing records in detail, the Court finds substantial time 24 was billed for clerical tasks such as “filing, transcript, and document organization time,” which the 25 Ninth Circuit has stated are not compensable, regardless of who completes them. See Nadarajah 26 v. Holder, 569 F.3d 906, 921 (9th Cir. 2009). The Court details these entries below: 27 Dawn Garrison 7/4/2013 Save and print $100 .2 $20 1 motion to dismiss; 2 calendar Dawn Garrison 8/14/2013 Print and save $100 .2 $20 3 statement of recent decision 4 Dawn Garrison 8/15/2013 Print and save $100 .2 $20 statement of recent 5 decision 6 Pierce F. Gore 9/16/2013 Ordered transcript; $650 .3 $195 emailed with 7 counsel regarding hearing transcript 8 Tyler Van Put 2/6/2014 Printed and $350 3.00 $1,050 9 compiled binder of filings 10 Tyler Van Put 2/7/2014 Printed discovery $350 .6 $210 documents; saved to 11 system Tyler Van Put 2/10/2014 Updated binders $350 .6 $210 12 with discovery 13 materials; printed documents 14 Tyler Van Put 2/25/2014 Scanned and $350 .2 $70 emailed proof of 15 service; updated database 16 Tyler Van Put 3/13/2014 Filed and FedExed $350 .3 $105 17 courtesy copy Tyler Van Put 3/17/2014 Printed and $350 .3 $105 18 prepared courtesy copy of recent 19 filing; printed 20 document report Tyler Van Put 3/27/2014 Printed materials for $350 1.3 $455 21 review; arranged for court reporter 22 Michael Park 4/15/2014 Made binders for $350 3.5 $1,225 hearing 23 Tyler Van Put 1/7/2015 Traveled to $350 1.3 $455 24 appellate division and got certificate of 25 service Tyler Van Put 1/8/2015 Filed Pro Hac Vice $350 .6 $210 26 Motion on ECF 27 Tyler Van Put 1/30/2015 Prepared FedEx $350 .3 $105 Package; brought Michael Park 2/19/2015 Put together filing $350 3.0 $1,050 1 for courtesy copies 2 Tyler Van Put 4/1/2015 Printed and $350 2.9 $1,015 prepared exhibits; 3 compiled in folders and boxed for 4 deposition Tyler Van Put 4/7/2015 Downloaded and $350 .1 $35 5 saved files 6 Nanci-Taylor 4/8/2015 Scheduled flights $150 1 $150 Maddux and hotel 7 Nanci-Taylor 4/9/2015 Downloaded, saved, $150 .3 $45 Maddux and circulated 8 deposition and 9 exhibits Michael Park 4/14/2015 Arranged for $350 .5 $175 10 printing of latest production; loaded 11 production onto server 12 Michael Park 4/20/2015 Pulled filing $350 .5 $175 13 Nanci-Taylor 4/20/2015 Sent unredacted $150 .4 $60 Maddux documents to 14 counsel Nanci-Taylor 4/20/2015 Sent binders of $150 7 $1,050 15 Maddux courtesy copies to Judge 16 Nanci-Taylor 4/21/2015 Changed flight and $150 .3 $45 17 Maddux hotel reservation Nanci-Taylor 4/21/2015 Rescheduled hotel $150 .7 $105 18 Maddux and flight Nanci-Taylor 4/22/2015 Scheduled flight $150 .4 $60 19 Maddux 20 Tyler Van Put 7/25/2019 Printed mediation $350 1.3 $455 materials and 21 created binders; arranged to ship 22 Tyler Van Put 7/29/2019 Printed, copied, and $350 .4 $140 23 organized materials for mediation 24 Tyler Van Put 11/12/2019 Searched for $350 .3 $105 template for 25 settlement agreement motion; 26 updated database 27 Tyler Van Put 11/14/2019 Printed materials re $350 .2 $70 class certification TOTAL $9,190 1 2 Because these represent purely clerical tasks, they should not be factored into Class Counsel’s 3 lodestar. 4 Class Counsel has also block billed substantial time for travel. Courts in this district have 5 frequently reduced travel time by half to create a reasonable rate. See, e.g., In re Washington 6 Public Power Supply Sys. Sec. Lit., 19 F.3d 1291, 1298–99 (9th Cir. 1994) (finding the district 7 court did not err in reducing attorney travel time by half where the “attorneys generally billed the 8 entire duration of the time spent in transit”); see also In re Volkswagen “Clean Diesel” Mktg., 9 Sales Practices, & Prod. Liab. Litig., No. 6903, 2020 WL 2086368, at *8 (N.D. Cal. Apr. 30, 10 2020). Here, Class Counsel often block billed for travel to and participation in a hearing or 11 deposition, without differentiating between the travel and substantive components. In the absence 12 of an explanation regarding what time was spent traveling versus attending the hearing, the Court 13 finds that a reduction in this time of fifty percent is appropriate under the circumstances. 14

15 Name Date Task Rate Hours Total Brad 9/9/2013 Prepared for $550 11.50 $6,325 16 Silverman hearing; traveled to 17 California 18 Brad 9/11/2013 Prepared for $550 11 $6,050 Silverman hearing; legal 19 research; travel Pierce F. Gore 9/11/2013 Met with B. $650 5.80 $3,770 20 Silverman re 21 preparation for motion to 22 dismiss hearing and case 23 management conference; 24 attended motion 25 to dismiss hearing and 26 case management 27 conference; San Jose and 1 San Francisco; 2 email and phone calls 3 Brad 9/12/2013 Traveled to $550 8 $4,400 Silverman New York 4 Pierce F. Gore 2/12/2014 Attended $850 5.80 $3,770 hearing on 5 Defendant’s 6 second motion to dismiss; 7 meeting with B. Silverman; 8 travel between San Jose and 9 San Francisco 10 Pierce F. Gore 4/16/2014 Prepared for $850 5.80 $4,930 hearing on 11 discovery dispute joint 12 report; travel 13 between San Jose and San 14 Francisco Pierce F. Gore 5/1/2014 Prepared for $850 3.80 $3,230 15 case management 16 conference; 17 attended case management 18 conference; travel between 19 San Jose and San Francisco 20 Brian 3/20/2015 Traveled to DC; $475 9.6 $4,560 21 Herrington defended deposition; 22 traveled home Brian 3/31/2015 Traveled to $475 6.8 $3,230 23 Herrington Boston for 24 deposition Brian 4/1/2015 Defended $475 12.2 $5,795 25 Herrington deposition and traveled to 26 Jackson Brad 4/2/2015 Deposition and $550 10.5 $5,775 27 Silverman related travel Herrington Francisco for 1 class 2 certification hearing; 3 prepared for same 4 Pierce F. Gore 5/6/2015 Met with co- $850 8.5 $7,225 counsel 5 regarding prep 6 for hearing; attended class 7 certification motion; email 8 with co-counsel regarding 9 hearing; travel 10 between San Jose and San 11 Francisco Pierce F. Gore 8/20/2015 Prepared for $850 3.8 $3,230 12 hearing on defendant’s 13 spoliation; 14 attended motion hearing; travel 15 between Corte Madera and San 16 Francisco; 17 emailed and phone call with 18 co-counsel regarding 19 hearing Pierce F. Gore 2/6/2018 Attended case $850 2.8 $2,380 20 management 21 conference; travel between 22 Corte Madera and Oakland 23 Pierce F. Gore 4/12/2018 Attended class $850 2.8 $2,380 certification 24 hearing; travel 25 between Corte Madera and 26 Oakland Pierce F. Gore 10/2/2018 Attended class $850 3.8 $3,230 27 certification between Corte 1 Madera and 2 Oakland Joshua Glatter 7/29/2019 Traveled to San $550 3.00 $1,650 3 Francisco re mediation and 4 reviewed mediation 5 papers 6 TOTAL $78,295 Reduced by $39,147.50 7 50% 8 9 The Court further notes that there were some entries for time reviewing court filings after the 10 Court granted a stay in this case, at which point there were no new filings. To the extent Class 11 Counsel had new counsel who needed to get up to speed join the case, this underscores the Court’s 12 concern that having so many attorneys working on this case led to duplicative efforts. 13

14 Name Date Task Rate Hours Total Julia Sandler 4/20/2016 Reviewed court $400 2.10 $840 15 filings and motion papers 16 Julia Sandler 4/21/2016 Reviewed court $400 21.40 $560 17 filings TOTAL $1,400 18

19 The Court therefore reduces Class Counsel’s lodestar by $148,490.67, and calculates Class 20 Counsel’s lodestar as $839,041.06. 21 The Court understands that Class Counsel is not seeking to recover the full lodestar 22 amount. Still, the Court has concerns about Class Counsel’s requested fees in light of Class 23 Counsel’s role in protecting the interests of absent Class Members and the results actually 24 achieved in this settlement. As the Ninth Circuit has explained, “[t]hough the lodestar figure is 25 presumptively reasonable, the court may adjust it upward or downward by an appropriate positive 26 or negative multiplier reflecting a host of reasonableness factors, including the quality of 27 representation, the benefit obtained for the class, the complexity and novelty of the issues 1 presented, and the risk of nonpayment. In re Bluetooth Headset Prod. Liab. Litig, 654 F.3d 935, 2 941–42 (9th Cir. 2011) (quotations and internal citations omitted). “Foremost among these 3 considerations . . . is the benefit obtained for the class.” Id. “Thus, where the plaintiff has 4 achieved ‘only limited success,’ counting all hours expended on the litigation—even those 5 reasonably spent—may produce an excessive amount, and the Supreme Court has instructed 6 district courts to instead ‘award only that amount of fees that is reasonable in relation to the results 7 obtained.’” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 440 (1983)). 8 First, the Court repeatedly had to intervene to ensure that the rights of absent Class 9 Members were protected in this settlement. In the initial settlement agreement that Class Counsel 10 entered into, the release contained claims, including monetary relief claims, that the Court did not 11 certify in its Class Certification Order. See Dkt. No. 225 at §§ 1.2, 8.2 (releasing Defendant from 12 all claims, known or unknown, relating to and arising out of “all allegations, demands and 13 assertions in the SAC and any other filings or documents in the Class Action regarding the alleged 14 improper labeling of any of the Products”). Class Counsel also agreed with Defendant that notice 15 to absent Class Members was not required. See Dkt. No. 217 at 7–8. In other words, Class 16 Counsel approved a settlement in which absent Class Members would be giving up significant 17 legal rights without any notice. Only at the Court’s urging did the parties revise the settlement 18 agreement. See Dkt. No. 222-1, Ex. A. Class Counsel also continued to urge that notice was not 19 required to absent Class Members because the settlement only provided injunctive relief, and 20 Class Members would not be able to “opt out.” See Dkt. Nos. 222, 226. Yet as the Court 21 repeatedly explained, notice in this case was about giving absent Class Members the opportunity 22 to understand how their rights would be affected by the proposed settlement; object to the 23 settlement if they believed it insufficient; and weigh in on the anticipated motions for attorneys’ 24 fees and incentive awards for the named Plaintiffs. See Dkt. No. 232; see also Fed. R. Civ. P. 25 23(h)(1). The Court thus initially denied the motion for preliminary approval on this basis. See 26 Dkt. No. 232. Of course, part of the Court’s role is to protect the rights of absent Class Members, 27 but Class Counsel obviously has a similar obligation. And yet Class Counsel failed to adequately 1 Second, it is unclear how much of the results achieved here were actually motivated by this 2 litigation. Of the sixteen different products whose labels purportedly changed as part of the 3 settlement, Defendant either discontinued or divested seven of the products. See SA at § 4.4. Any 4 “change” in these labels thus has illusory value, as the products are no longer available or within 5 Defendant’s control. The labels actually only changed for four of the nine products still owned by 6 Defendant, by removing soy flour from the ingredients list for two products and by removing the 7 AHA Heart Check Mark from two others. Id. And added color was removed as an ingredient 8 from five products, although the label did not change. Id. During the final fairness hearing, 9 however, Defense counsel confirmed that some of the decisions to alter the ingredients and labels 10 on their products were based in part on Defendant’s independent business decisions, rather than on 11 this litigation. It is thus difficult for the Court to adequately assess how much of the relief owed to 12 Plaintiffs’ efforts in this case and what the actual value of the relief is to the class. See In re 13 Bluetooth, 654 F.3d at 945, & n.8 (raising concerns about the disproportionate fees where 14 injunctive relief was sought but the value of that relief was unclear, and defendant had made 15 several voluntary changes). 16 Even assuming that Defendant made all these changes based on this litigation, these nine 17 products represent less than one-third of the products that Plaintiffs identified in the operative 18 complaint. See SAC at ¶¶ 193–194, 197–198, 202–203, 225–226. 19 For all of these reasons, the Court concludes that a reduction in attorneys’ fees is 20 appropriate in light of Class Counsel’s performance and the results achieved in this case. The 21 Court reduces Class Counsel attorneys’ fees to approximately one-third of the revised lodestar 22 calculated above, and thus GRANTS IN PART attorneys’ fees and costs in the amount of 23 $225,000. 24 C. Incentive Awards 25 Lastly, Class Counsel also requests an incentive award of $5,000 for each of the Named 26 Plaintiffs. Dkt. No. 241 at 24–25. District courts have discretion to award incentive fees to named 27 class representatives. See In re Mego Fin. Corp. Secs. Litig., 213 F.3d 454, 463 (9th Cir. 2000). 1 routinely to receive special awards in addition to their share of the recovery, they may be tempted 2 to accept suboptimal settlements at the expense of the class members whose interests they are 3 appointed to guard.” See Staton v. Boeing Co., 327 F.3d 938, 975 (9th Cir. 2003); Radcliffe v. 4 Experian Information Sols. Inc., 715 F.3d 1157, 1163–64 (9th Cir. 2013) (noting that the Ninth 5 Circuit has “expressed disapproval of these incentive agreements” and that “in some cases 6 incentive awards may be proper but . . . awarding them should not become routine practice”). 7 Indeed, the Ninth Circuit has cautioned that “district courts must be vigilant in scrutinizing all 8 incentive awards to determine whether they destroy the adequacy of the class representatives . . . .” 9 Radcliffe, 715 F.3d at 1165 (quotations omitted). This is particularly true where “the proposed 10 service fees greatly exceed the payments to absent class members.” Id. 11 The Court has concerns about the requested incentive awards in a case in which absent 12 Class Members are receiving no monetary awards at all, and where the actual value of the 13 injunctive relief is questionable. Thus, if the Court were to grant the named Plaintiffs’ request for 14 incentive awards, Plaintiffs Alex Ang and Lynn Streit would be receiving drastically preferential 15 treatment as compared to the other Class Members. And as the Court noted above, the Court 16 repeatedly had to intervene to ensure that absent Class Members’ rights were protected. The Court 17 has some questions as to whether named Plaintiffs took seriously their charge to protect the 18 interests of absent Class Members, and the Court cannot sanction this grossly disproportionate 19 request, especially where the results obtained were so modest. The Court accordingly DENIES 20 the request for incentive awards in its entirety. 22 Overall, the Court is left with the firm conviction that by far the main beneficiaries of this 23 long-running yet underwhelming case were the attorneys. From the outset, the theory of the case, 24 and the named Plaintiffs’ ability to credibly articulate it, were far from impressive. And the 25 resulting relief obtained for the class is similarly unimpressive. Nevertheless, controlling 26 precedent requires approval of this settlement, and the Court accordingly GRANTS final 27 approval. For the reasons set out above, the Court further GRANTS IN PART Class Counsel’s 1 incentive awards for named Plaintiffs. The parties are directed to implement this Final Order and 2 || the settlement agreement in accordance with the terms of the settlement agreement. The parties 3 are further directed to file a stipulated final judgment within 21 days from the date of this order. 5 || Dated: 9/29/2020 6 Abpepured 5 HAYWOOD S. GILLIAM, JR. 7 United States District Judge 8 9 10 11 a 12

© 15 16

it

4 18 19 20 21 22 23 24 25 26 27 28