1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Franca Armstrong, et al., No. CV-24-02812-PHX-SHD
10 Plaintiffs, ORDER PRELIMINARILY APPROVING SETTLEMENT 11 v.
12 Bestway (USA) Incorporated,
13 Defendant. 14 15 At issue is Plaintiffs Franca Armstrong, Mandy Islam, and Danielle Harper’s 16 (“Plaintiffs”) unopposed Motion for Preliminary Approval of Class Action Settlement 17 Agreement. (Doc. 35 (“Motion” or “Mot.”.) I held a hearing on the Motion on July 10, 18 2025, (Doc. 36), and after taking the matter under advisement, ordered the parties to 19 provide supplemental briefing and supporting documentation regarding preliminary class 20 certification, (Doc. 38). Plaintiffs and Defendant Bestway (USA) Inc. (“Bestway”) filed 21 a Joint Supplemental Brief in support of the Motion and a declaration addressing my 22 questions. (Docs. 39, 41.) Based on the contents of the Motion, Joint Supplemental 23 Brief, and Declaration, as well as the information provided at the hearing, I will grant the 24 Motion. 25 I. FACTUAL AND PROCEDURAL BACKGROUND 26 In September 2024, Bestway, a manufacturer of spa pumps, together with the 27 United States Consumer Product Safety Commission, announced a recall impacting over 28 1 860,000 pumps covering nine different models.1 (Doc. 29, First Amended Complaint 2 (“FAC”) at ¶ 2.) The recall stemmed from fires involving allegedly defective spa pumps. 3 (Id.) Bestway’s recall allowed consumers who still possessed a Bestway spa pump to 4 either (a) receive a replacement spa pump, or (b) receive a credit or gift card valued at 5 $100 or $189, depending on the model spa pump they purchased; consumers who no 6 longer possessed a spa pump were left without any recourse against Bestway. (FAC ¶¶ 5, 7 43.) 8 Plaintiff Harper filed a class action suit in the United States District Court for the 9 Eastern District of Pennsylvania, while Plaintiffs Armstrong and Mandy filed similar 10 claims in this matter. (Mot. at 2.) Counsel in both actions worked cooperatively and 11 added Harper as a plaintiff in this action via the FAC, which asserts various common law 12 and statutory causes of action. (Mot. at 3; see also FAC at ¶¶ 58–192.) Bestway 13 answered and asserted various affirmative defenses. (Doc. 30.) Before filing the FAC 14 and Answer, the parties reached a settlement in principle. (Mot. at 2–3.) 15 Plaintiffs then filed the Motion, seeking certification of the class under Federal 16 Rule of Civil Procedure 23(b)(3) for purposes of settlement. (Id. at 14–15.) The parties 17 describe the executed Class Action Settlement Agreement in detail and include it as an 18 exhibit. (Id. at 3–7; Doc. 35-2 (“Settlement” or “Settlement Agreement”).) Under the 19 Settlement, Class Members who opted for a replacement spa pump under Bestway’s 20 recall automatically receive a one-year extension to Bestway’s limited warranty, with an 21 estimated value of $60. (Mot. at 3–4.) Class Members who received compensation 22 through the recall or no longer have a spa pump are eligible to receive a $75 cash 23 payment as long as they either participate in the recall or submit a valid proof of purchase 24 with their claim form if they no longer possess a covered spa pump and did not 25 previously participate in the recall. (Id. at 4.) The cash payments are capped at 26
27 1 The nine spa pump models at issue are the Bestway AirJet and HydroJet Spa Pump model numbers P05332, P05339, P05711, P05807, P07000, P07001, P05511, 28 P07034, and P07572 (collectively, the “Class Product”). (Settlement at 4.) 1 $2,000,000; thus, if the total amount of valid claims for cash payments—plus $2,500 2 incentive fees paid to each of the named Plaintiffs—exceeds $2,000,000, the cash 3 payments will be reduced pro rata. (Id. at 4–5.) 4 The Settlement also requires Bestway to pay all expenses associated with 5 distributing and administering the benefits to Class Members, independent of the cap, as 6 well as Class Counsel’s attorneys’ fees and costs, which are capped at $807,591. (Id. at 7 5.) If fees and costs are awarded in an amount below that cap, the difference between the 8 amount awarded and the fees/costs cap will be distributed pro rata to each Class Member 9 who submitted a claim for a cash payment. (Id. at 5–6.) Following execution of the 10 Settlement, Plaintiffs moved for certification of the settlement class and preliminary 11 approval of the Settlement. 12 II. LEGAL STANDARD 13 Procedurally, the class certification and settlement approval process moves 14 forward in two steps. At the first step, the court preliminarily determines whether the 15 proposed settlement class should be certified and whether the court “will likely be able 16 to” approve the settlement proposal under the “fair, reasonable, and adequate” standard 17 such that it can direct notice under Rule 23(e)(1) to all class members who would be 18 bound by the settlement. See Fed. R. Civ. P. 23(e). At the second step, the court must 19 evaluate whether to grant final approval. The Motion concerns only the first step. 20 A. Standard for Class Certification 21 Rule 23(a), Federal Rules of Civil Procedure, provides that a class action may 22 proceed only if four prerequisites are met: 23 1. Numerosity: “the class is so numerous that joinder of all members is 24 impracticable”; 25 2. Commonality: “there are questions of law or fact common to the class”; 26 3. Typicality: “the claims or defenses of the representative parties are 27 typical of the claims or defenses of the class;” and 28 4. Adequacy of Representation: “the representative parties will fairly and 1 adequately protect the interests of the class.” 2 Doyle v. Pekin Ins. Co., 2025 WL 1192752, at *2 (D. Ariz. 2025) (quoting Fed. R. Civ. P. 3 23(a)). 4 Additionally, as pertinent to the Motion, Rule 23(b)(3) allows a court to certify a 5 class action if it finds “that the questions of law or fact common to class members 6 predominate over any questions affecting only individual members, and that a class 7 action is superior to other available methods for fairly and efficiently adjudicating the 8 controversy.” In conducting the requisite inquiry, courts consider several “pertinent” 9 factors: 10 (A) the class members’ interests in individually controlling the prosecution 11 or defense of separate actions; 12 (B) the extent and nature of any litigation concerning the controversy 13 already begun by or against class members; 14 (C) the desirability or undesirability of concentrating the litigation of the 15 claims in the particular forum; and 16 (D) the likely difficulties in managing a class action. 17 Fed. R. Civ. P. 23(b)(3)(A)–(D). 18 The Supreme Court has explained that “Rule 23 does not set forth a mere pleading 19 standard. A party seeking class certification must affirmatively demonstrate his 20 compliance with the Rule—that is, he must be prepared to prove that there are in fact 21 sufficiently numerous parties, common questions of law or fact, etc.” Wal-Mart Stores, 22 Inc. v. Dukes, 564 U.S. 338, 350 (2011). Accordingly, “it may be necessary for the court 23 to probe behind the pleadings before coming to rest on the certification question.” Id. 24 (citation omitted). The analysis a district court must engage in requires a “rigorous 25 analysis” to ensure that the requirements of Rule 23(a) have been satisfied. Id. at 350–51. 26 B. Standard for Preliminary Approval of Class Settlement 27 Furthermore, Rule 23 requires approval by the district court of any class action 28 settlement. Fed R. Civ. P. 23(e) (“The claims, issues, or defenses of a certified class—or 1 a class proposed to be certified for purposes of settlement—may be settled, voluntarily 2 dismissed, or compromised only with the court’s approval.”). Approval requires the 3 court to conduct a hearing and find that a settlement is “fair, reasonable, and adequate 4 after considering” several factors. Fed. R. Civ. P. 23(e)(2) (setting forth factors). In the 5 Ninth Circuit, district courts must balance eight factors when evaluating a proposed class 6 settlement under Rule 23(e)(2): 7 (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and 8 likely duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4) the amount offered in settlement; (5) the 9 extent of discovery completed and the stage of the proceedings; (6) the 10 experience and views of counsel; (7) the presence of a governmental participant; and (8) the reaction of the class members to the proposed 11 settlement. 12 Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 575 (9th Cir. 2004). 13 Some of these factors cannot be fully assessed until the final fairness hearing; 14 therefore, 15 [a]t the preliminary approval stage, courts need only evaluate whether the 16 proposed settlement (1) appears to be the product of serious, informed, non- collusive negotiations, (2) has no obvious deficiency, (3) does not 17 improperly grant preferential treatment to class representatives or segments 18 of the class, and (4) falls within the range of possible approval. 19 Doyle, 2025 WL 1192752, at *3 (citing Horton v. USAA Cas. Ins. Co., 266 F.R.D. 360, 20 363 (D. Ariz. 2009)); see also Saliba v. KS Statebank Corp., 2021 WL 2105608, at *4 (D. 21 Ariz. 2021) (preliminary approval is evaluated simply for “whether the Settlement is 22 within the range of reasonableness”). 23 Nonetheless, for settlements reached prior to formal class certification, the Ninth 24 Circuit has recognized that “there is an even greater potential [than normal] for a breach 25 of fiduciary duty owed the class during settlement.” In re Bluetooth Headset Prods. 26 Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011). “Accordingly, such agreements must 27 withstand an even higher level of scrutiny for evidence of collusion or other conflicts of 28 interest than is ordinarily required under Rule 23(e) before securing the court's approval 1 as fair.” Id. “The district court’s approval order must show not only that it has explored 2 the Churchill factors comprehensively, but also that the settlement is not the product of 3 collusion among the negotiating parties.” Id. at 947 (citation modified); see also Staton 4 v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003) (concerns about the fairness of 5 settlement agreements “warrant special attention when the record suggests that the 6 settlement is driven by fees; that is, when counsel receive a disproportionate distribution 7 of the settlement”). Ultimately, however, there is a “strong judicial policy that favors 8 settlements, particularly where complex class action litigation is concerned.” In re 9 Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 556 (9th Cir. 2019) (citation omitted). 10 III. DISCUSSION 11 In the unopposed Motion, Plaintiffs ask that I (1) preliminarily certify a national 12 class for settlement purposes (the “Settlement Class”) and appoint Plaintiffs and their 13 counsel as the Settlement Class’s representatives and counsel; (2) preliminarily approve 14 the proposed Settlement Agreement; and (3) approve the notice plan and forms of notice 15 to the Settlement Class. (Mot. at 1–2.) I first address whether Plaintiffs have met their 16 burden of establishing that the proposed Settlement Class meets the requirements of Rule 17 23(a) and (b)(3). I then examine whether the Settlement is fair, reasonable and adequate 18 under Rule 23(e) and the pertinent Churchill factors. Finally, because I will preliminarily 19 approve the Settlement, I address whether the parties’ proposed notice plan is adequate. 20 A. Preliminary Certification of the Settlement Class 21 The parties agree to the following definition of the Settlement Class: All people 22 who purchased Class Product from May 2021 through May 2024 (the “Class Period”). 23 (Mot. at 3.) For the reasons set forth below, the parties have established that the 24 Settlement Class meets the requirements of Rule 23(a) and (b)(3). 25 1. Rule 23(a)(1)—Numerosity 26 To satisfy Rule 23(a)(1), a class must be “so numerous that joinder of all members 27 is impracticable.” Fed. R. Civ. P. 23(a)(1). “In determining whether numerosity is 28 satisfied, the Court may consider reasonable inferences drawn from the facts before it.” 1 In re Yahoo Mail Litig., 308 F.R.D. 577, 589–90 (N.D. Cal. 2015). The term 2 “impracticable” has been construed to mean that joining all claimants would be difficult 3 and inconvenient. See In re Modafinil Antitrust Litig., 837 F.3d 238, 249 (3d Cir. 2016) 4 (citing Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993)). Although there is no set 5 numerical threshold, courts presume that joining more than 40 claimants would be 6 impractical. See, e.g., id.; Rannis v. Recchia, 380 F. App’x 646, 651 (9th Cir. 2010) (“In 7 general, courts find the numerosity requirement satisfied when a class includes at least 40 8 members.”). 9 Here, the proposed Settlement Class is comprised of approximately 860,000 10 consumers. (Mot. at 12.) Accordingly, Rule 23(a)(1) is readily satisfied. 11 2. Rule 23(a)(2)—Commonality 12 Rule 23(a)(2) specifies that a class action present “questions of law or fact 13 common to the class.” Fed. R. Civ. P. 23(a)(2). There must be a minimum of one 14 common question of law or fact shared by the class to satisfy this provision. See, e.g., 15 Wal-Mart, 564 U.S. at 359 (“[F]or purposes of Rule 23(a)(2), even a single common 16 question will do.” (cleaned up)). Accordingly, Rule 23(a)(2) presents a “‘relatively light 17 burden’ that ‘does not require that all the questions of law and fact raised by the dispute 18 be common . . . or that the common questions of law or fact predominate over individual 19 issues.’” Esparza v. SmartPay Leasing, Inc., 2019 WL 2372447, at *2 (N.D. Cal. 2019) 20 (quoting Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 (11th Cir. 2009)). 21 Plaintiffs have demonstrated the existence of questions of law and fact that are 22 common to the proposed Settlement Class, such as whether Bestway knew or should have 23 known of the defect in the Class Product, whether the defect would be material to a 24 reasonable consumer, whether Bestway failed to disclose the defect from potential 25 customers, and whether Bestway violated the consumer protection laws at issue. (FAC ¶ 26 50; see also Mot. at 11–12.) 27 3. Rule 23(a)(3)—Typicality 28 Rule 23(a)(3) requires that the “claims or defenses of the representative parties are 1 typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). The inquiry 2 focuses on “whether other members have the same or similar injury as [the class 3 representatives], whether the action is based on conduct which is not unique to the 4 [representatives], and whether other class members have been injured by the same 5 conduct.” Parsons v. Ryan, 754 F.3d 657, 685 (9th Cir. 2014) (quotation marks omitted); 6 Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010). The 7 representatives’ claims “need not be substantially identical” to other class members’ 8 claims to satisfy the typicality requirement. Parsons, 754 F.3d at 685 (citation omitted). 9 Thus, if the representatives’ and other class members’ claims arise from a similar course 10 of conduct and share the same legal theory, certain factual differences or differing 11 damages may not necessarily preclude typicality. Just Film, Inc. v. Buono, 847 F.3d 12 1108, 1116–18 (9th Cir. 2017) (holding that “typicality is not defeated” when a 13 representative plaintiff’s “precise injuries are [not] identical” to the class and her 14 “damages differ[ed] from the damages of some class members”). 15 Plaintiffs’ claims and the class members’ claims are nearly identical. They all 16 arise from similar defects in the Class Product that negatively impacted the value of the 17 goods purchased and involve a similar alleged course of conduct by Bestway. (See 18 generally, FAC.) Moreover, although Plaintiffs purchased only one of the nine models of 19 spa pumps that comprise the Class Product, this does not negate typicality given that the 20 claims need not be substantially identical. See Parsons, 754 F.3d at 685. Accordingly, 21 the typicality requirement is satisfied here. 22 4. Rule 23(a)(4)—Adequacy 23 Rule 23(a)(4) requires that the “representative parties will fairly and adequately 24 protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). The inquiry under this 25 provision “serves to uncover conflicts of interest between named parties and the class 26 they seek to represent.” Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 625 (1997). As 27 the Supreme Court has explained, “a class representative must be part of the class and 28 ‘possess the same interest and suffer the same injury’ as the class members.” E. Tex. 1 Motor Freight Sys., Inc. v. Rodriguez, 431 U.S. 395, 403 (1977) (quoting Schlesinger v. 2 Reservists Comm. to Stop the War, 418 U.S. 208, 216 (1974). Courts in the Ninth Circuit 3 ask the following questions when determining whether class representatives adequately 4 represent the class: “(1) Do the representative plaintiffs and their counsel have any 5 conflicts of interest with other class members, and (2) will the representative plaintiffs 6 and their counsel prosecute the action vigorously on behalf of the class?” Evon v. L. Offs. 7 of Sidney Mickell, 688 F.3d 1015, 1031 (9th Cir. 2012). “The adequacy-of-representation 8 requirement tends to merge with the commonality and typicality criteria of Rule 23(a).” 9 Whitehead v. Amica Mut. Ins. Co., 2025 WL 870990, at *8 (D. Ariz. 2025) (finding no 10 conflict of interest “especially in light of the commonality and typicality requirements 11 being met”) (citation modified). 12 At the July 10, 2025 hearing, Plaintiffs addressed questions about whether their 13 purchase of only one of the nine models at issue rendered them inadequate 14 representatives, or created a conflict between them and class members who had 15 purchased other models. Following the hearing, the parties supplemented the Motion 16 with additional briefing pertinent to this issue. (Docs. 39, 40.) Plaintiffs have established 17 that they do not have any conflict with the other members of the proposed Settlement 18 Class and are adequate representatives. That Plaintiffs only purchased one of the nine 19 spa pump models at issue is of minimal importance in this case given their model was the 20 most commonly purchased model—comprising a significant majority of the 21 approximately 860,000 spa pumps sold, (Doc. 41 at ¶ 4)—and the defect was the same 22 across models. See Lessin v. Ford Motor Co., 756 F. Supp. 3d 885, 933–34 (S.D. Cal. 23 2024) (finding alignment between class representatives and other members, even though 24 they only owned two of the four product models at issue, given that the defect was the 25 same and they suffered similar injury). 26 Furthermore, Plaintiffs have demonstrated that the variance in price of the 27 different spa pumps, and the different compensation offered for different models during 28 the recall, does not create a conflict. First, the difference in price and compensation was 1 not so large as to raise concerns that Plaintiffs might have a conflict. (Doc. 41 at ¶¶ 2–3.) 2 Second, as Plaintiffs note, because class members were already able to obtain 3 differentiated compensation by participating in the recall, there is less of a concern with 4 treating all class members similarly for purposes of compensation under the Settlement. 5 (Doc. 39 at 4–5.) And third, Plaintiffs represent all members of the putative class with 6 respect to participation in the recall, because one availed herself of the replacement 7 option, and the other two did not participate in the recall. (Doc. 39 at 2.) 8 Likewise, Plaintiffs have demonstrated that their counsel has and will vigorously 9 pursue the interests of the Settlement Class. “Although there are no fixed standards by 10 which vigor can be assayed, considerations include competency of counsel and, in the 11 context of a settlement-only class, an assessment of the rationale for not pursuing further 12 litigation.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1021 (9th Cir. 1998) (cleaned up), 13 overruled on other grounds by Wal-Mart, 564 U.S. 338. Here, Plaintiffs have provided 14 information about counsel’s experience in similar class actions, as well as their efforts in 15 prosecuting this action, including obtaining a favorable settlement in light of litigation 16 risks. (Mot. at 13–14 (citing Doc. 35-1 at ¶¶ 5–25).) Accordingly, Plaintiffs have 17 established adequacy. 18 5. Rule 23(b)(3) 19 Plaintiffs seek class certification pursuant to Rule 23(b)(3), (Mot. at 14–15), which 20 provides for class treatment when (a) questions of law or fact common to class members 21 predominate over questions affecting individual members, and (b) a class action is 22 superior to other available methods for the fair and efficient adjudication of the 23 controversy. Fed. R. Civ. P. 23(b)(3). 24 a. Predominance 25 Although the predominance requirement is similar to Rule 23(a)(2)’s commonality 26 requirement, it is “even more demanding.” Comcast Corp. v. Behrend, 569 U.S. 27, 34 27 (2013). The predominance inquiry “focuses on the relationship between the common and 28 individual issues and tests whether proposed classes are sufficiently cohesive to warrant 1 adjudication by representation.” Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 2 944 (9th Cir. 2009) (quotation marks omitted). Thus, “courts have a duty to take a close 3 look at whether common questions predominate over individual ones to ensure that 4 individual questions do not overwhelm questions common to the class.” Senne v. Kan. 5 City Royals Baseball Corp., 934 F.3d 918, 927 (9th Cir. 2019) (quotation marks omitted). 6 “An individual question is one where ‘members of a proposed class will need to present 7 evidence that varies from member to member,’ while a common question is one where 8 ‘the same evidence will suffice for each member to make a prima facie showing [or] the 9 issue is susceptible to generalized, class-wide proof.’” Tyson Foods, Inc. v. Bouaphakeo, 10 577 U.S. 442, 453 (2016) (quoting 2 W. Rubenstein, Newberg on Class Actions § 4:50, 11 pp. 196–197 (5th ed. 2012)). “When common questions present a significant aspect of 12 the case and they can be resolved for all members of the class in a single adjudication, 13 there is clear justification for handling the dispute on a representative rather than on an 14 individual basis.” Hanlon, 150 F.3d at 1022 (quotation marks omitted). 15 Here, Plaintiffs have demonstrated that the common issues predominate over the 16 individual issues. The class members’ claims arise under the same or similar consumer 17 protection laws. (Mot. at 14–15 (citing state and federal laws supporting their claims).) 18 Moreover, the claims all relate to Bestway’s conduct in marketing its spa pumps, involve 19 the same defect across all models, and would rely on much of the same evidence. (Id.) 20 And although the different class members might theoretically have suffered different 21 damages depending on which model spa pump they purchased or whether they 22 participated in Bestway’s recall, this “does not defeat finding predominance.” Just Film, 23 847 F.3d at 1121. Put another way, there is minimal likelihood that the class members 24 have strong interests in individually controlling the prosecution of separate actions, and it 25 is unlikely that managing the class action would be difficult. See Fed. R. Civ. P. 26 23(b)(3)(A), (D). 27 b. Superiority 28 “Where classwide litigation of common issues will reduce litigation costs and 1 promote greater efficiency, a class action may be superior to other methods of litigation.” 2 Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). Here, a class 3 action will undoubtedly promote efficiency. Because each class member’s claims involve 4 substantially similar issues, filing tens or hundreds of thousands of individual cases 5 would increase litigation costs and waste both the parties’ and courts’ time and resources. 6 Additionally, although damages would theoretically vary among the class members, the 7 vast majority of their claims would be too small to make individual litigation possible. 8 See McClure v. State Farm Life Ins. Co., 341 F.R.D. 242, 254 (D. Ariz 2022) (“[B]ecause 9 the recoveries of each individual class member will be relatively small, a class action is 10 superior to other methods of adjudication.”). Additionally, it appears that the only 11 litigation to date concerning Bestway’s spa pump recall has been asserted by Plaintiffs, 12 (see Mot. at 3), suggesting that this class action is a superior method for resolving the 13 class members’ claims in this forum. See Fed. R. Civ. P. 23(b)(3)(B), (C). Thus, the 14 superiority requirement is met. 15 Because Plaintiffs’ proposed Settlement Class meets the requirements of Rules 16 23(a) and (b), the class will be certified for settlement purposes. 17 B. Preliminary Approval of the Settlement 18 Based on the Motion, including the Settlement attached to it, the parties’ Joint 19 Supplemental Brief supporting the Motion (Doc. 39), and the Declaration of Pat 20 Fumagalli, (Doc. 41 (sealed)), the Settlement will be preliminarily approved because I 21 find that I will likely be able to approve it under Rule 23(e)(2)’s “fair, reasonable and 22 adequate” standard after considering the four factors described in Horton. 266 F.R.D. at 23 363. 24 1. Non-Collusive Settlement Negotiations 25 The means and negotiations by which the parties settled the action must be 26 evaluated under the first factor. Id. at 363. Courts bear the obligation to evaluate the 27 scope and effectiveness of the investigation plaintiffs conducted prior to reaching an 28 agreement. See In re Mego Fin. Corp. Sec. Litig., 213 F.3d 454, 459 (9th Cir. 2000); see 1 also Acosta v. Trans Union, LLC, 243 F.R.D. 377, 397 (C.D. Cal. 2007) (“Federal courts 2 are inherently skeptical of pre-certification settlements, precisely because such 3 settlements tend to be reached quickly before the plaintiffs’ counsel has had the benefit of 4 the discovery necessary to make an informed evaluation of the case and, accordingly, to 5 strike a fair and adequate settlement.”); Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 6 1048 (9th Cir. 2019) (“Where . . . parties negotiate a settlement agreement before the 7 class has been certified, settlement approval requires a higher standard of fairness and a 8 more probing inquiry than may normally be required under Rule 23(e).” (quotation marks 9 omitted)). 10 In this case, the Settlement bears no indicia of collusion. It was negotiated with 11 the benefit of the services of a mediator who presided over three separate mediations, 12 (see Mot. at 8–9 (citing Doc. 35-1 at ¶¶ 8–10, 21–25)), suggesting that the Settlement was 13 the result of an adversarial, arms’ length, bargaining process, see In re Flint Water Cases, 14 571 F. Supp. 3d 746, 780 (E.D. Mich. 2021) (“There appears to be no better evidence of a 15 truly adversarial bargaining process than the presence of a neutral third party mediator.” 16 (citation modified)). And in advance of the mediations, the parties engaged in some 17 informal discovery through which Bestway produced data concerning, among other 18 things, sales of the Class Product and putative class members’ participation in the recall, 19 which was sufficient for the parties to assess their claims and defenses. (Doc. 35-1 at ¶ 20 8.) 21 Given the lack of any evidence suggesting that the Settlement was negotiated 22 collusively or in haste, I am preliminarily satisfied that it was the product of informed, 23 arms’ length negotiations. See Hanlon, 150 F.3d at 1027 (affirming settlement approval 24 when there was “no evidence to suggest that the settlement was negotiated in haste or in 25 the absence of information illuminating the value of plaintiffs’ claims”). Nonetheless, at 26 the fairness hearing the parties must be prepared to present evidence regarding the 27 adequacy of the negotiation process. 28 1 2. No Obvious Deficiency 2 For purposes of determining whether there is an obvious deficiency, the Ninth 3 Circuit has identified three particular warning signs “that class counsel have allowed 4 pursuit of their own self-interests and that of certain class members to infect the 5 negotiations”: (1) “When counsel receive a disproportionate distribution of the 6 settlement,” (2) “clear sailing” provisions requiring payment of attorneys’ fees separate 7 from class compensation and where a defendant promises not to challenge agreed-upon 8 fees, and (3) reverter provisions that result in unawarded fees reverting to defendants 9 rather than to the class. In re Bluetooth, 654 F.3d at 947; Briseño v. Henderson, 998 F.3d 10 1014, 1026–27 (9th Cir. 2021) (identifying “red flag” of a clear sailing arrangement 11 where the defendant “agreed not to challenge the agreed-upon fees for class counsel,” 12 which “signal[ed] the potential that a defendant agreed to pay class counsel excessive 13 fees in exchange for counsel accepting a lower amount for the class members”). 14 Here, none of these deficiencies identified in In re Bluetooh exists—there is no 15 clear sailing provision, no reverter of unawarded fees to Bestway, and no 16 disproportionate payment of the settlement amount to counsel. Indeed, the Settlement 17 provides that “[s]hould the Court order an award of attorneys’ fees, costs, and expenses in 18 a total amount less than [the amount sought by counsel of] $807,591.00, the difference 19 between the amount awarded to Class Counsel and $807,591.00 shall be distributed pro 20 rata to each Class Member who has submitted a valid claim for a cash payment.” 21 (Settlement at 17–18.) Moreover, it appears that the majority of the benefits of the 22 Settlement will accrue to the class members rather than counsel, given that the settlement 23 fund for cash payments is capped at $2,000,000 (plus amounts not awarded to counsel 24 below the fee cap) and class members may be entitled to an extended warranty with 25 additional value. (Settlement at 12–14.) 26 3. No Preferential Treatment 27 District courts must be “particularly vigilant” for signs that counsel has allowed 28 the “pursuit of their own self-interests and that of certain class members to infect the 1 negotiations.” In re Bluetooth., 654 F.3d at 947. Accordingly, preliminary approval of a 2 class settlement is inappropriate where the proposed agreement “improperly grant[s] 3 preferential treatment to class representatives.” In re Tableware Antitrust Litig., 484 F. 4 Supp. 2d 1078, 1079 (N.D. Cal. 2007). Class representatives are, however, “eligible for 5 reasonable incentive payments.” Staton v. Boeing Co., 327 F.3d 938, 977 (9th Cir. 2003). 6 These payments “are discretionary and are intended to compensate class representatives 7 for work done on behalf of the class, to make up for financial or reputational risk 8 undertaken in bringing the action, and, sometimes, to recognize their willingness to act as 9 a private attorney general.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958–59 (9th 10 Cir. 2009) (citation omitted). These payments, however, must be evaluated individually 11 to avoid “excessive payments to named class members” that may indicate “the agreement 12 was reached through fraud or collusion,” and this evaluation entails balancing “the 13 number of named plaintiffs receiving incentive payments, the proportion of the payments 14 relative to the settlement amount, and the size of each payment.” Staton, 327 F.3d at 975, 15 977. 16 Here, the Settlement calls for a minimal incentive fee of $2,500 for each of the 17 three Plaintiffs. (Settlement at 17.) This amount would be less than a tenth of a percent 18 of the estimated value of the Settlement, which is reasonable and raises no concerns of 19 collusion. See, e.g., In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 948 (9th Cir. 20 2015) (approving $45,000 in incentives awards, which made up “a mere .17% of the total 21 settlement fund of $27,250,000”). 22 Moreover, the parties have, at this preliminary stage, satisfied my concerns about 23 the Settlement giving preferential treatment to some members of the class over others. 24 As noted above, although the Settlement awards the same relief to all class member 25 regardless which spa pump model they purchased—which differ in cost—the parties have 26 sufficiently explained that the recall benefits sufficiently distinguish between models. 27 (Doc. 39 at 4–5, 6.) While the parties should be prepared to argue and, potentially, 28 prepare further evidence on this subject at the fairness hearing, I preliminarily find that 1 the Settlement does not improperly benefit Plaintiffs or segments of the class. 2 4. Within Range of Possible Approval 3 Finally, courts focus on “substantive fairness and adequacy” and “consider 4 plaintiffs’ expected recovery balanced against the value of the settlement offer” when 5 evaluating whether a settlement falls “within the range of possible approval.” In re 6 Tableware, 484 F. Supp. 2d at 1080. The Motion asserts that the value of the Settlement 7 exceeds “$10 million dollars” based on the cash fund of $2,000,000 for class members 8 who do not want a replacement spa pump, and an $8,000,000 estimated value of the 9 extended warranty for those who select a replacement. (Mot. at 1, 11.) At the July 10, 10 2025 hearing, Plaintiffs’ counsel indicated that maximum damages in cases like this one, 11 which are in the form of “price premium damages,” are approximately 10 to 20 percent, 12 but did not provide an actual estimated dollar value of the Settlement Class’s claim. 13 Counsel further explained that obtaining such a best case result would require more than 14 five years of litigation and, of course, the outcome would be uncertain. 15 At this stage, I preliminarily find that the value of the Settlement is within the 16 range of possible approval. The parties, however, should be prepared to present more 17 concrete evidence of the maximum value of the Settlement Class’s claims at the fairness 18 hearing to allow for a more complete understanding of the adequacy of the Settlement’s 19 value. See, e.g., Zwicky v. Diamond Resorts Mgmt. Inc., 343 F.R.D. 101, 124–25 (D. 20 Ariz. 2022) (explaining that courts need more than “vague and conclusory statements” 21 about numerical evidence to determine whether a proposed settlement’s value is 22 adequate). 23 In sum, I will preliminarily approve the proposed Settlement because it “appears 24 to be the product of serious, informed, non-collusive negotiations, has no obvious 25 deficiency, does not improperly grant preferential treatment to class representatives or 26 segments of the class and falls within the range of possible approval.” Horton, 266 27 F.R.D. at 363 (quotation marks omitted). 28 1 C. Proposed Class Notice and Notice Program 2 The parties have proposed a form of class notice, as well as a program for giving 3 that notice, to the members of the Settlement Class. Rule 23(c)(2)(B) sets forth the 4 requirements for notice to a class certified under Rule 23(b)(3): 5 6 [T]he court must direct to class members the best notice that is practicable 7 under the circumstances, including individual notice to all members who can be identified through reasonable effort . . . . The notice must clearly and 8 concisely state in plain, easily understood language: 9 (i) the nature of the action; 10 (ii) the definition of the class certified; 11 (iii) the class claims, issues, or defenses; 12 13 (iv) that a class member may enter an appearance through an attorney if the member so desires; 14 (v) that the court will exclude from the class any member who requests 15 exclusion; 16 (vi) the time and manner for requesting exclusion; and 17 (vii) the binding effect of a class judgment on members under Rule 18 23(c)(3). 19 20 Fed. R. Civ. P. 23(c)(2)(B). In addition to outlining the contents of the notice, Rule 23 21 requires that the notice be provided via “United States mail, electronic means, or other 22 appropriate means.” Id. Additionally, the Supreme Court has explained that due process 23 requires that the notice be “reasonably calculated, under all the circumstances, to apprise 24 interested parties of the pendency of the action and afford them an opportunity to present 25 their objections.” Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). 26 In this case, the Settlement includes proposed class notice forms (“Notice 27 Forms”), (see Settlement, Exhibits D (Long Form Notice), E (Summary Notice)), and a 28 proposed notice plan (“Notice Plan”), (id. at 14–17). Both Notice Forms are in an easy- 1 to-understand question-and-answer format and satisfy the requirements of Rule 2 23(c)(2)(B). The Notice Plan requires direct notice by email and United States mail and 3 email to all members of the Settlement Class whose email or home addresses are 4 available, an online advertising notice program designed to ensure that at least 80 percent 5 of the class receive action notice, and a reminder summary notice via email 60 days after 6 the date of the initial notice for all members of the class who have not yet submitted a 7 claim, objection, or opt-out notice. (Settlement at 14–15). Accordingly, the Notice Plan 8 also complies with Rule 23(c)(2)(B). See, e.g., Dale v. Travelers Property Casualty Ins. 9 Co., 2024 WL 4503808, at *10 (D. Ariz. 2024) (finding notice was appropriate where it 10 was served “by United States Mail,” and was “in the form of easily understandable 11 questions and answers” and “direc[ed] Class Members to contact Class Counsel . . . for 12 more detailed information”). Furthermore, both the form of notice and the Notice Plan 13 comport with due process because they are reasonably calculated to apprise class 14 members of the pendency of this lawsuit and afford them the opportunity to object. See 15 Mullane, 339 U.S. at 314. Thus, the proposed Notice Forms and Notice Plan will be 16 approved. 17 IV. CONCLUSION 18 Accordingly, 19 IT IS ORDERED granting Plaintiffs’ Notice of Motion and Motion for 20 Preliminary Approval of Class Action Settlement (Doc. 35). 21 IT IS FURTHER ORDERED as follows: 22 1. Defined Terms. This Order incorporates by reference the definitions in the 23 Settlement Agreement, and all terms used in this Order shall have the same meanings as 24 set forth in the Settlement Agreement. 25 2. Class Definition. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, I 26 preliminarily certify, solely for purposes of effectuating the Settlement, the following 27 Settlement Class: all people who purchased a Class Product during the Class Period. 28 Excluded from the Class are: (a) Defendant and its employees, principals, officers, 1 directors, agents, affiliated entities, legal representatives, successors and assigns; (b) the 2 judges to whom the Actions have been or are assigned and any members of their 3 immediate families; and (c) all persons who have filed a timely Request for Exclusion 4 from the Class. 5 3. Class Representatives. I preliminarily appoint Danielle Harper, Franca 6 Armstrong, and Mandy Islam as Settlement Class Representatives. 7 4. Class Counsel. I preliminarily appoint Poulin Willey Anastopoulo, LLC, Hoffman 8 Legal, LLC, and Smith Krivoshey, PC as Class Counsel for the Settlement Class. 9 5. Preliminary Class Certification of Settlement Purposes Only. I preliminarily find, 10 solely for purposes of the Settlement, that the Rule 23 criteria for certification of the 11 Settlement Class exist. 12 6. Form of Class Notice. I approve the form and content of the proposed Long Form 13 Notice and Summary Notice (Exhibits D and E to the Settlement Agreement) and Claim 14 Form (Exhibit C to the Settlement Agreement). I authorize the Parties to make non- 15 material modifications to the Settlement Class Notice and Claim Form prior to mailing if 16 they jointly agree that any such changes are appropriate. 17 7. Notice. No later than the date specified in Paragraph 20 below, the Settlement 18 Administrator shall provide notice to the Class pursuant to the terms of the Settlement 19 Agreement. The Parties shall coordinate with the Settlement Administrator to provide 20 notice to the Class pursuant to the terms set forth therein. 21 8. Administration. I appoint Simpluris, Inc. as the Settlement Claim Administrator 22 (“Settlement Administrator”). The Settlement Administrator is directed to perform all 23 settlement administration duties set forth in, and pursuant to the terms and time periods 24 of, the Settlement Agreement, including mailing of the CAFA Notice; implementing and 25 maintaining the Settlement website; disseminating the Class Notice to the Settlement 26 Class; the processing, review and determination of timely submitted and proper Claims 27 Forms under the Settlement; and the submission of any declarations and other materials 28 to counsel and the court; as well as any other duties required under the Settlement 1 Agreement. 2 9. Exclusion from the Class. Any Class Member who wishes to be excluded from the 3 Class must send to the Settlement Administrator by U.S. Mail a personally signed letter, 4 including their (a) full name, (b) current address, (c) a clear statement communicating 5 that they elect to be excluded from the Class and do not wish to be a Class Member, 6 (d) their signature, and (e) the case name and case number of the Action. A Class 7 Member can exclude only himself or herself from the Class, and shall not be allowed to 8 request that another individual or group be excluded. “Mass” or “class” opt-outs are not 9 permitted. Any such Request for Exclusion must be postmarked and sent to the 10 Settlement Administrator no later than the date specified in Paragraph 20 below (the 11 “Opt-Out Deadline”). The Settlement Administrator shall forward copies of any written 12 requests for exclusion to Plaintiffs’ Counsel and Defense Counsel. 13 10. Binding Impact. If the proposed Settlement is finally approved, any potential 14 Class Member who has not submitted a timely written Request for Exclusion on or before 15 the Opt-Out Deadline shall be bound by all terms of the Settlement Agreement and the 16 Final Order and Final Judgment, regardless of whether they have requested exclusion 17 from the Settlement, even if the potential Class Member previously initiated or 18 subsequently initiates any litigation against any or all of the Released Parties relating to 19 Released Claims. All persons or entities who properly exclude themselves from the Class 20 shall not be Class Members and shall relinquish their rights or benefits under the 21 Settlement Agreement, should it be approved, and may not file an objection to the 22 Settlement or be entitled to any settlement benefits. 23 11. Objections: Any Class Member who has not filed a timely written Request for 24 Exclusion may object to the fairness, adequacy, or reasonableness of the Settlement 25 Agreement or the Settlement, or to the requested award of attorneys’ fees and expenses, 26 or Plaintiffs’ service awards. 27 12. Copy of Objection: Any Class Member who objects to the fairness, 28 reasonableness, and/or adequacy of the Settlement must, in addition to filing the written 1 objection no later than the Objection Deadline set forth in Paragraph 20 below, provide a 2 copy of the written objection by U.S. mail or e-mail to the Settlement Administrator. The 3 Settlement Administrator shall forward copies of any objections to Plaintiffs’ Counsel 4 and Defense Counsel. 5 13. Objection Contents: Any objecting Class Member must include in the objection: 6 a. the objector’s full name, address, and telephone number; 7 b. a statement, sworn to under penalty of perjury, attesting to the fact that (i) the 8 objector purchased one or more of the Class Products during the Class Period, 9 (ii) describing the model Class Product (i.e., AirJet or HydroJet Spa Pump) and 10 model number, and (iii) the date and location of purchase and provide proof of 11 purchase of the Class Product; 12 c. proof of purchase of a Class Product, such as through a photograph of the 13 Class Product or, if you no longer have the Class Product, a receipt or email 14 confirmation of the purchase; 15 d. a written statement of all grounds for the objection accompanied by any legal 16 support for such objection; 17 e. copies of any papers, briefs, or other documents upon which the objection is 18 based and are pertinent to the objection; 19 f. the name, address and telephone number of any counsel representing said 20 objector; and 21 g. a list of all other objections submitted by the objector, or the objector’s 22 counsel, to any class action settlements submitted in any court in the United 23 States in the previous five (5) years, including the full case name, the 24 jurisdiction in which it was filed and the docket number. If the Class Member 25 or his, her, their or its counsel has not objected to any other class action 26 settlement in the United States in the previous five (5) years, the class member 27 shall affirmatively so state in the objection. 28 14. Appearance. Any objecting Class Member may appear, in person or by counsel, at 1 the Final Fairness Hearing to explain why the proposed Settlement should not be 2 approved as fair, reasonable, and adequate, or to object to any motion for Class Counsel 3 Fees and Expenses or Class representative service award. To appear, the objecting Class 4 Member must file with the Clerk of the Court a Notice of Intention to Appear at the Final 5 Fairness Hearing. The Notice of Intention to Appear must include copies of any papers, 6 exhibits or other evidence and the identity of witnesses that the objecting Class Member 7 (or the objecting Class Member’s counsel) intends to present at the Final Fairness 8 Hearing. Any Class Member who does not provide a Notice of Intention to Appear in 9 accordance with the deadline and other requirements set forth in Order shall be deemed to 10 have waived any right to appear, in person or by counsel, at the Final Fairness Hearing. 11 15. Waiver. Any Settlement Class Member who has not properly filed a timely 12 objection in accordance with the deadline and requirements set forth in this Order and the 13 Class Notice shall be deemed to have waived any objections to the Settlement and any 14 adjudication or review of the Settlement Agreement by appeal or otherwise. 15 16. Preliminary Injunction. All Class Members and/or their representatives who do 16 not timely and properly exclude themselves from the Class are barred and enjoined from 17 directly, indirectly, derivatively, in a representative capacity, or in any other capacity 18 filing, commencing, prosecuting, maintaining, intervening in, participating in, 19 conducting, or continuing any action in any forum (state or federal) as individuals, class 20 members, putative class members, or otherwise against the Released Parties (as defined 21 in the Settlement Agreement) in any court or tribunal asserting any of the Released 22 Claims (as defined in the Settlement Agreement), and/or from receiving any benefits 23 from any lawsuit, administrative or regulatory proceeding, or order in any jurisdiction, 24 arising out of, based on, or relating to the Released Claims. In addition, all such persons 25 are hereby barred and enjoined from filing, commencing, or prosecuting a lawsuit against 26 Defendant (or against any of its related parties, parents, subsidiaries, or affiliates) as a 27 class action, a separate class, or group for purposes of pursuing a putative class action 28 (including by seeking to amend a pending complaint to include class allegations or by 1 seeking class certification in a pending action in any jurisdiction) on behalf of Class 2 Members who do not timely exclude themselves from the Class, arising out of, based on, 3 or relating to the Released Claims. Pursuant to 28 U.S.C. §§ 1651(a) and 2283, I find 4 that issuance of this preliminary injunction is necessary and appropriate in aid of my 5 continuing jurisdiction and authority over the Actions. 6 17. Termination of Settlement. In the event I do not grant final approval to the 7 Settlement, or for any reason the parties fail to obtain a Final Order and Final Judgment 8 as contemplated in the Settlement Agreement, or the Settlement Agreement is terminated 9 pursuant to its terms for any reason, then the following shall apply: 10 a. All orders and findings entered in connection with the Settlement Agreement 11 shall become null and void and have no force and effect whatsoever; 12 b. The conditional certification of the Class pursuant to this Order shall be 13 vacated automatically, and the Actions shall proceed as though the Class had 14 never been certified pursuant to the Settlement Agreement and such findings 15 had never been made; 16 c. Nothing in this Order or pertaining to the Settlement Agreement, including any 17 of the documents or statements generated or received pursuant to the claims 18 administration process, shall be used as evidence in any further proceedings in 19 this case, including, but not limited to, motions or proceedings seeking 20 treatment of the Actions as class actions; 21 d. Nothing in this Order or pertaining to the Settlement Agreement is, or may be 22 construed as, a presumption, concession, or admission by or against Defendant 23 that the Actions meet the requisites for certification as a class action under 24 federal law; and 25 e. All of my prior Orders having nothing whatsoever to do with the Settlement 26 shall, subject to this Order, remain in full force and effect. 27 18. Alteration of Exhibits. Plaintiffs’ Counsel and Defense Counsel are hereby 28 authorized to use all reasonable procedures to further the administration of the 1 Settlement that are not materially inconsistent with this Order or the Agreement, 2 including making, without further approval, minor changes to the form or content of the 3 Long Form Notice, Summary Notice, Claim Form, and other exhibits that they jointly 4 agree are reasonable or necessary. 5 19. Retaining Jurisdiction. I shall maintain continuing jurisdiction over these 6 settlement proceedings to ensure the effectuation thereof for the benefit of the Class, and 7 for any other necessary purpose. 8 20. Settlement Deadlines. Based on the foregoing, I am setting the schedule below for 9 the Final Fairness Hearing and the actions which must precede it. If any deadline set 10 forth in this Order falls on a weekend or federal holiday, then such deadline shall extend 11 to the next business day. These deadlines may be extended by court order, for good 12 cause shown, without further notice to the Class. Settlement Class Members must check 13 the Settlement website regularly for updates and further details regarding this 14 Settlement: 15 Event Deadline Pursuant to Date Ordered by 16 Settlement Agreement Court 17 Notice shall be provided in 45 days after Preliminary May 18, 2026 accordance with the Notice Approval Granted 18 Plan and this Order 19 Class Counsels’ application 45 days after Notice Date July 2, 2026 for Attorneys’ Fees and 20 Expenses and service awards 21 for Plaintiffs-Settlement Class Representatives and 22 Reminder Notice shall be 60 days after Notice Date July 17, 2026 23 provided in accordance with the Notice Plan in this Order 24 Objections to the Settlement, 90 days after Notice Date August 17, 2026 25 Class Counsels’ Fee and Expense Application, and/or 26 the request for service awards 27 (“Objection Deadline”) Requests for Exclusion from 90 days after Notice Date August 17, 2026 28 the Settlement (“Opt-Out Date)
to submit Claim Forms | (“Claims Deadline” 4 || | Plaintiffs’ Motion for Final 28 days before Final Fairness | August 21, 2026 Approval of the Settlement Hearing 5 || | and response to any 6 objections Deadline to submit notices of | 28 days before Final Fairness | August 21, 2026 ee 8 Fairness Hearing Deadline for Claims 10 days before Final Fairness | September 9, 2026 9 || | Administrator to submit Hearing declaration (1) stating the 10 number of claims, requests 11 || | for exclusion, and objections to date, and (2) attesting that 12 Notice was disseminated in a 13 || | manner consistent with the Settlement Agreement or | otherwise required by court 15 || order. Final Fairness Hearing will be | 120 days after Notice Date, | Date: Friday, 161 | held at Courtroom 502, 401 or as soon thereafter as may | September 18, 2026 | W. Washington St., Suite be heard by the court 130, SPC 1 Phoenix, Time: 9:00 a.m. | AZ 85003-2118, or by video 19 || | conference as determined by court order. 20 Dated this 1st day of April, 2026. 21 22 24 / 5 H le Sharad H. Desai United States District Judge 26 27 28
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