Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-01056/USCOURTS-casd-3_11-cv-01056-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LUIS LERMA, on behalf of

himself and all other similarly

situated California residents,

Plaintiffs,

CASE NO. 11cv1056-MDD

ORDER DENYING MOTION TO

RECONSIDER RULING ON

MOTION TO STAY

SETTLEMENT APPROVAL

PROCESS

[ECF NO. 118]

v.

SCHIFF NUTRITION

INTERNATIONAL INC. , a

Delaware Corporation, and

SCHIFF NUTRITION GROUP,

INC., a Utah Corporation,

Defendants.

On December 22, 2014, the parties filed a Stipulation to Stay

Settlement Approval Process and Engage in Further Mediation. (ECF

No. 116). The Court construed the stipulation as a motion to stay and

denied the motion on January 25, 2015. (ECF No. 117). On January 30,

2015, Plaintiffs filed a “Response to Court’s January 25, 2015 Order . . .

Regarding Motion to Stay Settlement Approval Process. (ECF No. 118). 

The Court’s Order did not invite a response. Rather than reject it,

however, the Court will construe the response as a Motion to Reconsider.

As construed, the motion is DENIED. 

As in their prior Motion, which was denied by the Court, Plaintiffs

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present their concern that final approval of the settlement agreement

preliminarily approved by this Court on November 21, 2014, is rendered

doubtful as a consequence of a decision rendered by the Court of Appeals

for the Seventh Circuit in a similar case. See Pearson, et al., v. NBTY,

Inc., et al., 772 F.3d 778 (7th Cir. 2014). In its earlier Order, the Court

rejected the view that the Pearson decision required a stay of the

proceedings in this case to allow the parties to return to mediation and

consider changing their settlement agreement. On the question of

whether to continue or stay the settlement process, the Court finds that

differences between the instant settlement agreement and the

settlement agreement in Pearson, and differences in circuit law, do not

require a continuance or stay in this case. Nothing new in that regard

was presented to the Court in the instant Motion. The parties remain at

liberty to consider modifying their settlement agreement and jointly

presenting any modifications to the Court.

 In their motion for reconsideration, Plaintiffs also ask the Court to

consider the impact of a settlement agreement in a case pending in the

Southern District of New York, with different plaintiffs and different

defendants, in which the defendants agreed, as part of the stipulated

injunctive relief, to refrain from using synonyms to the language which

prompted the lawsuit. (ECF No. 118 *2 and Exh. A to ECF No. 188). 

The Court will not rule in advance of any objections regarding whether

synonyms should be included in the injunctive relief to be ordered in this

case upon final approval. That such terms were negotiated in another

case with different parties in a different court does not justify a stay or

continuance in the instant case. The parties may choose to preempt an

anticipated objection by negotiating changes and jointly moving the

Court to accept an amendment to the settlement agreement. This Court

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will not require the parties to pursue that path; it is entirely up to them. 

At the time of the settlement agreement and preliminary approval

in the instant case, the district court in Pearson already had determined

that the injunctive relief in that case had no value in terms of

considering the overall value of the agreement to the class and in

considering the appropriateness of the fee request. The Seventh Circuit

agreed. Pearson at 785-86. In this Circuit, however, as the parties

acknowledged in moving for preliminary approval, injunctive relief can

be given a value and that value can be part of the consideration of the

Court regarding the appropriateness of a fee request in this Circuit. See,

e.g., In re: Ferrero Litigation, 583 Fed. Appx. 665, 668 (9th Cir. 2014);

Carr v. Tadin, Inc., 2014 WL 7499454 *3 (S. D. Cal. December 5, 2014). 

This is particularly true when a lodestar method ultimately is used to

determine the appropriate fee. Id.

This Court expresses no view regarding how it may rule on any

objections to final approval. Nor is the Court expressing any view

regarding how it would respond to a request to continue the final

approval hearing in the event the parties agree to modify their

settlement agreement in some way and move the Court for approval of

the modification. As matters now stand, however, the motion to

continue or stay the settlement approval process and hearing, and the

motion to reconsider the denial of that motion, are and remain DENIED.

IT IS SO ORDERED.

DATED: February 2, 2015

 

 Hon. Mitchell D. Dembin

 U.S. Magistrate Judge

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