Winters v. Two Towns Ciderhouse Inc.

CourtDistrict Court, S.D. California
DecidedSeptember 22, 2020
Docket3:20-cv-00468
StatusUnknown

This text of Winters v. Two Towns Ciderhouse Inc. (Winters v. Two Towns Ciderhouse Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Winters v. Two Towns Ciderhouse Inc., (S.D. Cal. 2020).

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE SOUTHERN DISTRICT OF CALIFORNIA 9 RICHARD WINTERS and JAKE Case No. 20-cv-00468-BAS-BGS 10 GRUBER, individually and on behalf of others similarly situated, ORDER: 11 Plaintiffs, (1) PRELIMINARILY APPROVING 12 CLASS ACTION SETTLEMENT; v. 13 TWO TOWNS CIDERHOUSE, INC., (2) CONDITIONALLY APPROVING PROPOSED SETTLEMENT 14 Defendant. CLASS; AND 15 (3) SETTING HEARING OF FINAL APPROVAL OF SETTLEMENT 16 (ECF No. 21) 17 18 On March 12, 2020, Plaintiff Richard Winters filed a putative class action complaint 19 for violations of California unfair competition law, pursuant to Calif. Bus. & Prof. Code 20 §§17200 et seq. and §§17500 et seq. against Two Towns Ciderhouse, Inc. (“2 Towns”). 21 (Compl., ECF No. 1.) Plaintiff amended that complaint twice, adding claims for a 22 violation of California Consumer Legal Remedies Act, Cal. Civ. C. §§1750 et seq., and a 23 violation of Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 24 505/1 et seq., and adding Jake Gruber as a named Plaintiff. (ECF Nos. 11, 18.) The gist 25 of the allegations is that Defendant intentionally labeled its drink products with false and 26 misleading claims that they contain no artificial flavors, when the products contained 27 artificial Malic Acid (DL-Malic Acid) instead of non-artificial L-Malic Acid. (Compl. 28 ¶1.) 1 Now pending before this Court is the Parties’ joint motion for preliminary approval 2 of class action settlement, which seeks an order conditionally certifying a proposed 3 settlement class, preliminarily approving the class action settlement, and setting a hearing 4 for final approval of the settlement. (Joint Mot., ECF No. 21.) 5 I. PROPOSED SETTLEMENT 6 The proposed settlement agreement applies to class members (“Class” or “Class 7 Members”) defined as: 8 all persons within the United States who purchased the following 2 Towns products as consumers within four years prior to the filing of the original 9 Complaint until the Class Notice Date: Bright Cider, Easy Squeezy, Pacific Pineapple, Made Marion, Ginja Ninja, or Outcider, Bad Apple, Cherried 10 Away, Cot in the Act, Sun’s Out Saison, Nice & Naughty, Rhubarbarian, Pearadise, Prickly Pearadise, Serious Scrump, and Imperial Hop & Stalk. 11 Excluded from the class are 2 Towns and its employees and agents. 12 13 (“Settlement” or “Settlement Agreement” §§ 1.7, 2.2.1, Ex. A to Decl. of Todd M. 14 Friedman (“Friedman Decl.”), ECF No. 21-1.) 15 The parties agree that the Class shall be provisionally certified (Settlement § 3), and 16 that, subject to the Court’s approval, the Law Offices of Todd M. Friedman, P.C. will be 17 appointed as Class Counsel (Id. § 1.6), Richard Winters and Jake Gruber will be appointed 18 as Class Representatives (Id. § 1.12 ), and Postlethwaite and Netterville, APAC, will be 19 appointed as Class Administrators. (Id. § 1.3.) 20 The Settlement Agreement outlines the agreed-upon injunctive relief. “No later 21 than the Preliminary approval date, 2 Towns shall cease using DL-Malic Acid in [the 22 designated class] products and shall use L-Malic acid” instead. (Settlement Agreement, § 23 2.1.1.) Additionally, “within 30 days after the effective date, 2 Towns shall cause the 24 statement ‘Nothing Artificial’ to be removed from packaging for products not already 25 introduced into the stream of commerce [and] . . . from its website.” (Id. § 2.1.2.) 26 Defendant also agrees to set up a common settlement fund of $985,000. (Settlement 27 Agreement § 2.2.1.) This settlement fund will be used to pay: (1) the costs and expense 28 of notice and administration, not to exceed $250,000 (Id.); (2) any service award to the 1 Class Representatives not to exceed $7,500 for Richard Winters and $5,000 for Jake 2 Gruber (Id. § 2.2.3); and (3) attorney’s fees, not to exceed 25% of the settlement fund, and 3 costs, not to exceed $20,000. (Id. § 2.2.2.) The Settlement Agreement is not conditioned 4 on the Court’s approval of any attorneys’ fees or costs sought by Class Counsel. (Id.) 5 Any amount remaining will be distributed pro rata to Class Members who submit 6 timely and valid claims to the Class Administrator. (Settlement Agreement, § 5.1.) Class 7 Members may make claims, either by mail or via the Class Settlement Website. (Id.) 8 Class Members will be able to select the number of each Class Product they purchased 9 during the Class Period and will receive a weighted pro rata distribution of the remaining 10 Settlement Fund, depending on the number of claims made and the total number and 11 distribution of Class Products claimed. (Id.) There will be a cap of 10 Class Products per 12 Class Member for those Class Members who do not have proof of purchase. (Id.) If any 13 Class Member wishes to make a claim for more than 10 Class Products, proof of purchase 14 will be required and must be provided to the Claims Administrator. (Id.) “The weighted 15 pro rata share will be calculated based on the purchase prices of the products claimed, the 16 number of products claimed, and the total number and distribution of products claimed by 17 all participating Class Members.” (Id.) The formula for the weight of each product is set 18 forth in a detailed table in the Settlement Agreement. (Id.) 19 Any funds remaining after payment of all settlement costs, attorneys’ fees, and 20 payments to the settlement class shall be paid to Public Justice, a non-profit organization 21 dedicated to consumer rights advocacy. (Settlement Agreement § 5.5.) Public Justice 22 advocates for accurate product labels. Since the distribution is pro-rata for those who file 23 Claims Forms, this cy pres distribution will equal the amount for those who file Claims 24 Forms and then essentially disappear or refuse to timely deposit a check. As a result, it is 25 not expected to be substantial. 26 27 28 1 II. ANALYSIS 2 A. Class Certification (for Settlement Purposes Only) 3 Here, the Parties seek to certify a class for settlement purposes only. Federal Rule 4 of Civil Procedure 23(a) provides that a class may be certified “only if (1) the class is so 5 numerous that joinder of members is impracticable; (2) there are questions of law or fact 6 common to the class; (3) the claims or defenses of the representative parties are typical of 7 the claims or defenses of the class; and (4) the representative parties will fairly and 8 adequately protect the interests of the class.” Fed. R. Civ. P. 23(a). In addition to meeting 9 the 23(a) requirements, a class action must fall into one of the categories laid out in Rule 10 23(b). Fed. R. Civ. P. 23(b). The Parties seek to certify the class under Rule 23(b)(3). 11 (Joint Mot. at 16.) Both 23(a) and 23(b) are satisfied in this case. 12 1. Fed. R. Civ. P. 23(a) 13 a. Numerosity 14 The numerosity requirement is generally satisfied when the class contains 40 or 15 more members, a threshold far exceeded in this case. Consolidated Rail Corp. v. Town of 16 Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995); Celano v. Marriott Int’l, Inc., 242 F.R.D. 17 544, 549 (N.D. Cal. 2007). An estimated one to two million consumers purchased the 18 products at issue during the class period. That number is on its face large enough that 19 individual joinder of all class members would be impracticable. Fed. R. Civ. P. 23(a)(1) 20 is therefore satisfied. 21 b.

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Winters v. Two Towns Ciderhouse Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/winters-v-two-towns-ciderhouse-inc-casd-2020.