Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-02998/USCOURTS-cand-3_13-cv-02998-11/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ALETA LILLY, et al.,

Plaintiffs,

v.

JAMBA JUICE COMPANY, et al.,

Defendants.

Case No. 13-cv-02998-JST 

ORDER GRANTING PRELIMINARY 

APPROVAL

Re: ECF No. 60

In this class action, Plaintiffs allege that Defendants labeled their smoothie kits “all 

natural,” when in fact the kits contained ingredients that consumers would not have understood to 

be “natural.” ECF No. 1. On September 18, 2014, the Court certified a class of “all persons in 

California who bought one of the following Jamba Juice Smoothie Kit products: Mango-a-go-go, 

Strawberries Wild, Caribbean Passion, Orange Dream Machine, and Razzmatazz” for purposes of 

determining liability. ECF No. 54. The Court did not resolve the question of whether putative 

class plaintiffs Aleta Lilly and David Cox had standing to seek injunctive relief under Federal 

Rule 23(b)(2), an issue as to which the Court invited further briefing. ECF No. 50. Before the 

Court could rule on that question, however, the parties informed the Court at a case management 

conference that they had settled the case in principle, see ECF No. 57, and subsequently filed a 

motion for preliminary approval of a class action settlement for injunctive relief. ECF No. 60. 

The Court now considers the motion for preliminary approval of the class action 

settlement. Because the parties seek to resolve the action by stipulating to injunctive relief, the 

Court first answers the question of whether the class has standing to seek injunctive relief. 

Because the Court concludes that plaintiff has standing to seek such relief, the Court then turns to 

the merits of the proposed settlement, and grants the motion for preliminary approval. 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 1 of 15
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

I. BACKGROUND

A. Factual History

As recounted in this Court’s prior class certification order, ECF No. 54, Defendants Jamba 

Juice Company and Inventure Foods, Inc. (“Defendants”) have since 2010 produced at-home 

frozen smoothie kits for sale in retail grocery stores, big box stores, and wholesale clubs 

throughout California. Class Action Complaint (“Compl.”) ¶¶ 2-3 (ECF No. 1-1). The Smoothie 

Kits, which come in five flavors, are sold in a three-sided pouch with the words “All Natural” 

appearing prominently on the front of the package. Compl. ¶ 3; see also, Exh. 1 to Declaration of 

Rosemary M. Rivas. Plaintiffs allege that the Smoothie Kits contain ascorbic acid, xanthan gum, 

steviol glycosides, modified corn starch, and gelatin (the “challenged ingredients”). 

Plaintiff Aleta Lilly purchased the “Strawberries Wild” and “Caribbean Passion” smoothie 

kits from March 2010 to November 2012. Compl. ¶ 12. Plaintiff David Cox purchased the 

“Caribbean Passion” smoothie kits “within the last three years.” Compl. ¶ 13. Plaintiffs allege 

that, in making their purchases, they relied on the representation that the smoothie kits are “all

natural,” and they believe that because the Smoothie Kits contain the challenged ingredients, the 

kits are not “all natural.” Compl. ¶¶ 12-13. 

Plaintiff Lilly says that, although she has not purchased any Jamba Juice smoothie kits 

since she filed the lawsuit challenging the alleged mislabeling, she “would consider purchasing the 

products again if the products were honestly labeled” and she “could make an informed decision.” 

Supplemental Declaration of Aetna Lilly, ECF No. 52-1, ¶ 3 (“Lilly Supp. Decl.”). 

B. Procedural History 

Plaintiffs Lilly and Cox filed a proposed class action complaint in this action in June 2013. 

The complaint brings causes of action under the California Consumer Legal Remedies Act 

(“CLRA”), Cal. Civ. Code §§ 1750 et seq., the California False Advertising Law (“FAL”), Cal. 

Bus. & Prof. Code §§ 17500 et seq., the California Unfair Competition Law (“UCL”), Cal. Bus. & 

Prof. Code §§ 17200 et seq., and for breach of warranty pursuant to Cal. Comm. Code § 2313. ¶¶ 

42-70. In November, the Court denied Defendants’ motion to dismiss. 2013 WL 6070503 (N.D. 

Cal. Nov. 18, 2013). 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 2 of 15
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

The Plaintiffs moved to certify a class for the purposes of liability and damages. ECF No. 

29. Due to questions about whether damages could “feasibly and efficiently be calculated,” Leyva 

v. Medline Indus. Inc., 716 F.3d 510, 514 (9th Cir. 2013), the Court declined to certify a damages 

class, but certified a class for the purpose of determining liability. ECF No. 54. On August 21, 

2014, at the hearing on that motion, the Court requested supplemental briefing on the 23(b)(2) 

issue of certification for injunctive relief, which had been pleaded in the complaint but not 

otherwise briefed. ECF No. 29 at n.1. The parties submitted such briefing and Defendant 

disputed that certification for injunctive relief was appropriate. ECF No. 52, 53, 55. Nonetheless, 

the parties subsequently participated in an “in-person, half-day mediation” on October 15, 2014, 

during which they reached the material terms of the settlement currently before the Court, which 

includes injunctive relief. ECF No. 60. 

II. JURISDICTION AND CLASS CERTIFICATION

The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(d)(2) & (6), the 

Class Action Fairness Act of 2005 (“CAFA”). 

“The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, 

or compromised only with the court's approval.” Fed. R. Civ. Pro. 23(e). While no party 

currently disputes Plaintiffs’ the propriety of certifying an injunctive class for settlement purposes 

under 23(b)(2), “federal courts are required sua sponte to examine jurisdictional issues such as 

standing.” B.C. v. Plumas Unified School Dist., 192 F.3d 1260, 1264 (9th Cir. 1999).1 The 

parties have now agreed to a settlement which would provide Plaintiffs with injunctive relief, but 

Defendant previously argued that plaintiffs lacked standing to seek such relief. Standing is part of 

“the threshold requirement imposed by Article III of the Constitution” requiring plaintiffs to allege 

an “actual case or controversy.” City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983). 

Therefore, the Court must satisfy itself that it has jurisdiction over Plaintiffs’ claims for injunctive 

 

1

The Court’s prior order certifying the class for the purposes of liability determined that the 

prerequisites for certifying a class under 23(a)(1) were satisfied. Therefore, the question of 

whether the class may be certified for settlement purposes under 23(b)(2) depends on whether 

plaintiff has standing to seek injunctive relief. See ECF No. 54 at 3, n. 1. 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 3 of 15
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

relief before reaching the merits question of whether to preliminary approve the proposed 

settlement, which would provide the class with injunctive relief. 

A. Legal Standard

“To have standing to obtain injunctive relief, a plaintiff must allege that a ‘real or 

immediate threat’ exists that he will be wronged again.” Rahman v. Mott's LLP, CV 13-3482 SI, 

2014 WL 325241 at *10 (N.D. Cal. Jan. 29, 2014) (quoting Lyons, 461 U.S. at 111)). “In a class 

action, ‘[u]nless the named plaintiffs are themselves entitled to seek injunctive relief, they may not 

represent a class seeking that relief.’” Garrison v. Whole Foods Mkt. Grp., Inc., 13-CV-05222-

VC, 2014 WL 2451290 at *5 (N.D. Cal. June 2, 2014) (quoting Hodgers–Durgin v. de la Vina,

199 F.3d 1037, 1045 (9th Cir.1999)). 

B. Analysis

Courts in this District have grappled with the question of when a consumer class may be 

certified for the purposes of obtaining injunctive relief against deceptive product labeling under 

Rule 23(b)(2). Some courts have held that once a consumer is aware that a label is misleading, she 

can never have standing to seek injunctive relief, because there is no danger that she will be misled 

in the future. E.g., Ham v. Hain Celestial Grp., Inc., No. 14-CV-02044-WHO, 2014 WL 4965959, 

at *6 (N.D. Cal. Oct. 3, 2014). Other courts have found that such a consumer has standing, as 

long as she expresses the “intent to purchase [the challenged products] in the future.” Ries v. 

Arizona Beverages USA LLC, 287 F.R.D. 523, 533-34 (N.D. Cal. 2012), appeal dismissed (Jan. 

25, 2013); Jones v. ConAgra Foods, Inc., No. 12-CV-01633 CRB, 2014 WL 2702726 at *12 (N.D. 

Cal. June 13, 2014) at *12 (citing cases). 

This Court must therefore answer the question of whether a plaintiff can ever have 

standing to seek an injunction against a product she knows to be mislabeled. This Court agrees 

with those decisions that have answered this question in the affirmative. To hold otherwise would 

effectively preclude consumers from ever obtaining prospective relief against mislabeling. As 

other courts have already recognized, 

If the Court were to construe Article III standing for FAL and UCL claims as 

narrowly as the Defendant advocates, federal courts would be precluded from 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 4 of 15
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

enjoining false advertising under California consumer protection laws because a 

plaintiff who had been injured would always be deemed to avoid the cause of the 

injury thereafter (“once bitten, twice shy”) and would never have Article III 

standing.

Henderson v. Gruma Corp., 2011 U.S. Dist. LEXIS 41077 at *19-20 (C.D. Cal. Apr. 11, 2011); 

see also Koehler v. Litehouse, Inc., 2012 WL 6217635, at *16-17 (N.D. Cal. Dec. 13, 2012) (to 

deny injunctive relief “would eviscerate the intent of the California Legislature in creating 

consumer protection statutes because it would effectively bar any consumer who avoids the 

offending product from seeking injunctive relief”); Ries, 287 F.R.D. at 533 (“were the Court to 

accept the suggestion that plaintiffs’ mere recognition of the alleged deception operates to defeat 

standing for an injunction, then injunctive relief would never be available in false advertising 

cases, a wholly unrealistic result”); Cabral v. Supple, LLC, 2012 WL 4343867, at *5-6 (C.D. Cal. 

Sept. 19, 2012) (also following Henderson); Larsen v. Trader Joe’s Co., 2012 WL 5458396, at *11 

(N.D. Cal. June 14, 2012) (“Construing Article III standing as narrowly as defendant suggests in

consumer protection statutes . . . would effectively bar any consumer who avoids the offending 

product from injunctive relief.”). 

The Court is not persuaded by those courts that have reached the contrary conclusion that

injunctive relief is not available for a consumer who is aware of the misrepresentation. E.g., 

Garrison v. Whole Foods Mkt. Grp., Inc., No. 13-CV-05222-VC, 2014 WL 2451290, at *5 (N.D. 

Cal. June 2, 2014) (“The named plaintiffs in this case allege that had they known the Whole Foods 

products they purchased contained SAPP, they would not have purchased them . . . . Now they 

know. There is therefore no danger that they will be misled in the future.”); Ham, 2014 WL 

4965959 at *5 (“Consumers who were misled by deceptive food labels lack standing for injunctive 

relief because there is no danger that they will be misled in the future.’” (citations omitted)). 

These holdings misapprehend the nature of the injury suffered by the consumer. When a 

consumer discovers that a representation about a product is false, she doesn’t know that another, 

later representation by the same manufacturer is also false. She just doesn’t know whether or not 

it’s true. A material representation injures the consumer not only when it is untrue, but also when 

it is unclear whether or not is true. 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 5 of 15
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Basic economics also supports the notion that the past-purchaser plaintiff will suffer a 

potential injury in the absence of an injunction. In fact, because this consumer has already voted 

with her wallet, we know that she is the most likely to be injured in the absence of an injunction, 

not the least. 

Consumers make choices in the marketplace among the alternative goods competing for 

their dollars. “In explaining consumer behavior, economics relies on the fundamental premise that 

people choose those goods and services they value most highly.” Paul A. Samuelson & William 

D. Nordhaus, Economics 84 (19th ed. 2010). Economists “assume that each consumer maximizes 

utility, which means that the consumer chooses the most preferred bundle of goods from what is 

available.” Id. at 87. “Utility” in this context simply means “satisfaction,” and is a way of rankordering different goods and services. Id. at 84. So, when a consumer buys a certain consumer 

good, we may safely assume that she chose that item because it contained that bundle of 

characteristics most likely to provide the greatest utility. Id. (“In the theory of demand, we assume 

that people maximize their utility, which means that they choose the bundle of consumption that 

they most prefer.”); see also Robert S. Pindyk & Daniel L. Rubinfeld, Microeconomics 73 (3rd ed. 

1995) (we know that consumers will “choose goods to maximize the satisfaction they can achieve, 

given the limited budget available to them.”)

This state of affairs follows naturally from the limited resources available to most 

consumers. Because of those limits, every purchase has an opportunity cost; a dollar spent on 

coffee, for example, cannot be spent on orange juice.2 Therefore, the consumer chooses those 

goods most likely to provide satisfaction to her. Pindyk & Rubinfeld at 73. In part because of this 

condition of consumer behavior, we know which goods consumers prefer among the choices 

 

2 Remember that one of the cardinal tenets of economics is that resources are scarce. 

That means every time we choose to use a resource one way, we’ve given up the 

opportunity to utilize it another way . . . . [¶] In each of these cases, making a 

choice in effect costs us the opportunity to do something else. The value of the best 

alternative forgone is called the opportunity cost[.]

Samuelson at 139. 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 6 of 15
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

available to them ‒ because those are the goods they purchase. Id. at 81. 

Turning to the consumer who buys a mislabeled product that promises an attribute that the 

product does not in fact deliver, we know that she values most highly the product as it was 

promised to be ‒ because that’s how she spent her money. It is correct that now that she is aware 

of the misrepresentation, she knows that the product she bought was not as advertised. But the 

manufacturer may change or reconstitute its product in the future to conform to the representations 

on the label. In fact, the manufacturer has every reason to do this, since the market apparently 

values the very attribute the label promises. In that event, the product would actually become the 

product that our hypothetical consumer values most highly, and it would be labeled as such. But 

unless the manufacturer or seller has been enjoined from making the same misrepresentation, our 

hypothetical consumer won’t know whether the label is accurate. And she won’t know whether it 

makes sense to spend her money on the product, since she will suspect a continuing 

misrepresentation. In fact, knowing about the previous misrepresentation, she probably won’t buy 

it ‒ even though it is now precisely the product she wants above all others. So, while other 

consumers may purchase the (now correctly labeled) product, our consumer ‒ the person most 

likely to suffer future injury from this misrepresentation ‒ will be deprived of it.3 A rule that 

prevents this consumer from seeking an injunction doesn’t comport with traditional notions of 

standing; it prevents the person most likely to be injured in the future from seeking redress. 

For these reasons, this Court holds that a consumer is not disabled from seeking injunctive 

relief against false labeling solely because she learns, after purchasing a product, that the label is 

false. 

Defendants also previously disputed whether Lilly’s declaration of future intent to 

purchase the product was sufficient to confer standing. Defendants argued that she has failed to 

allege a sufficient future interest in purchasing the challenged smoothie kits, as she has stated only 

 

3

See Ries, 287 F.R.D. at 533 (“Should plaintiffs encounter the denomination ‘All Natural’ on an 

AriZona beverage at the grocery store today, they could not rely on that representation with any 

confidence. This is the harm California's consumer protection statutes are designed to redress.”). 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 7 of 15
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

that she “would consider purchasing the products again if the products were honestly labeled.” 

Lilly Supp. Decl. at ¶ 3 (emphasis added). Defendants contended that Lilly had no “real and 

immediate threat of future injury” because she did not claim a definite intent to purchase the 

challenged products in the future. ECF No. 53 at 6:13-15. 

While the contours of what a plaintiff must claim about a future interest in a product in 

order to have standing to represent a 23(b)(2) class have not been defined with precision,4the 

Court concludes that a willingness to consider a future purchase is sufficient. The harms Plaintiffs 

seek to avoid by bringing this litigation are not just the harms related to purchasing or consuming 

a mislabeled product, but also the harm of being a consumer in the marketplace who cannot rely 

on the representations made by Defendants on their product labels. See Ries, 287 F.R.D. at 533. 

Without injunctive relief, Lilly could never rely with confidence on product labeling when 

considering whether to purchase Defendants’ product. 

A standard that would require plaintiffs to state a definite intent to purchase a certain 

product at an unknown date in the future is inconsistent with the realities of consumer purchase 

decisions. Consumers make decisions in a dynamic marketplace, based on all the information 

available to them at the time of purchase, including the other similar products then available and 

all other potential uses of the funds available to make the purchase at issue. A plaintiff cannot 

know today what the competing uses for her money will be at an unknown date in the future. 

Perhaps someone will create a product that is more desirable than the defendant’s; perhaps the 

plaintiff’s tastes will change. Nonetheless, injunctive relief enables the Plaintiffs and other 

consumers to have confidence that the information they receive about the challenged products at 

the time of purchase is accurate. Defendants’ alleged mislabeling harms consumers by providing 

them with misleading information and depriving them of their ability to make an informed 

 

4 Compare Jones, 2014 WL 2702726 at *13 (indicating that standing would have existed if 

plaintiff had testified “that he bought the Hunt’s products in reliance on the label because he seeks 

out natural products, but that he might purchase Hunt’s products in the future if they were properly 

labeled” (emphasis added)) with Rahman, 2014 WL 325241 at *10 (concluding that “to establish 

standing, plaintiff must allege that he intends to purchase the product at issue in the future” 

(emphasis added)). 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 8 of 15
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

decision about how to best spend their money. 

Lilly’s statement that she would consider spending her money to purchase Defendants’ 

products if they were labeled correctly in the future therefore gives Plaintiffs standing to seek 

injunctive relief. 

III. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT 

A. Settlement Terms

As summarized by Plaintiffs, the terms of the stipulated injunction are as follows:

1. Defendants shall effect relabeling of all Challenged Products so that they do not 

describe the products as “all natural” on packaging or other advertising.

2. Defendants shall effect relabeling of all Challenged Products on its website 

pages so that they do not describe the Challenged Products as “all natural.”

3. Defendants shall effectuate the changes set forth above by March 31, 2015 and 

provide Plaintiffs with a declaration setting forth compliance with the above 

obligations and shall maintain records necessary to demonstrate compliance with 

the same.

4. Defendants are not required to remove or recall any of the Challenged Products 

in market, inventory, or elsewhere; nor are Defendants required to discontinue the 

use of, or destroy, any packaging inventory that was in existence prior to final 

judicial approval of this agreement. Instead, Defendants shall not print any 

Challenged Product labels after March 31, 2015 that do not comply with Paragraph 

4(A) above. However, Defendants may, now or after March 31, 2015, exhaust all 

existing packaging inventory and thereafter sell and distribute Challenged products 

bearing labeling printed on or before the final approval date of this agreement, 

without violating the terms of this agreement.

5. Plaintiffs and all members of the Settlement Class shall be forever enjoined from 

filing any action seeking injunctive relief pursuant to Rule 23(b)(2) for as long as 

the Stipulated Injunction remains in effect, against Defendants prohibiting them 

from labeling the Challenged Products containing the Challenged Ingredients as 

“all natural”. Settlement Agreement ¶ 4.F.

ECF No. 60 at 4. 

B. Legal Standard

The Ninth Circuit maintains a “strong judicial policy” that favors the settlement of class 

actions. Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992). Courts generally 

employ a two-step process in evaluating a class action settlement. First, courts make a 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 9 of 15
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

“preliminary determination” concerning the merits of the settlement and, if the class action has 

settled prior to class certification, the propriety of certifying the class. See Manual for Complex 

Litigation, Fourth (“MCL, 4th”) § 21.632 (FJC 2004). “The initial decision to approve or reject a 

settlement proposal is committed to the sound discretion of the trial judge.” Class Plaintiffs v. 

City of Seattle, 955 F.2d at 1276. Where the parties reach a class action settlement prior to class 

certification, courts apply “a higher standard of fairness and a more probing inquiry than may 

normally be required under Rule 23(e).” Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 

2012) (citation and internal quotation marks omitted). Courts “must be particularly vigilant not 

only for explicit collusion, but also for more subtle signs that class counsel have allowed pursuit of 

their own self-interests and that of certain class members to infect the negotiations.” In re 

Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011).

The Court’s task at the preliminary approval stage is to determine whether the settlement 

falls “‘within the range of possible approval.’” In re Tableware Antitrust Litig., 484 F. Supp. 2d 

1078, 1080 (N.D. Cal. 2007) (quoting Schwartz v. Dallas Cowboys Football Club, Ltd., 157 F. 

Supp. 2d 561, 570 (E.D. Pa. 2001)). See also MCL, 4th § 21.632. (courts “must make a 

preliminary determination on the fairness, reasonableness, and adequacy of the settlement terms 

and must direct the preparation of notice of the certification, proposed settlement, and date of the 

final fairness hearing.”). After preliminary approval, courts must hold a hearing pursuant to 

Federal Rule of Civil Procedure 23(e)(2) to make a final determination of whether the settlement 

is “fair, reasonable, and adequate.” Here, Plaintiff asks the Court to take the first step in granting 

preliminary approval to the proposed settlement.

Preliminary approval of a settlement is appropriate if “‘the proposed settlement appears to 

be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does 

not improperly grant preferential treatment to class representatives or segments of the class, and 

falls within the range of possible approval.’” In re Tableware, 484 F. Supp. 2d at 1079 (quoting 

Manual for Complex Litigation, Second § 30.44 (FJC 1985)). The proposed settlement need not 

be ideal, but it must be fair and free of collusion, consistent with a plaintiff’s fiduciary obligations 

to the class. Hanlon, 150 F.3d at 1027) (“Settlement is the offspring of compromise; the question 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 10 of 15
11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

we address is not whether the final product could be prettier, smarter or snazzier, but whether it is 

fair, adequate and free from collusion.”). To assess a settlement proposal, courts must balance a 

number of factors:

the strength of the plaintiffs’ case; the risk, expense, complexity, and 

likely duration of further litigation; the risk of maintaining class 

action status throughout the trial; the amount offered in settlement; 

the extent of discovery completed and the state of the proceedings; 

the experience and views of counsel; the presence of a governmental 

participant; and the reaction of the class members to the proposed 

settlement.

Hanlon, 150 F.3d at 1026 (citations omitted). The proposed settlement must be “taken as a whole, 

rather than the individual component parts” in the examination for overall fairness. Id. Courts do 

not have the ability to “delete, modify, or substitute certain provisions” because the settlement 

“must stand or fall in its entirety.” Id. 

C. Analysis

First, the Court finds that the proposed Settlement is procedurally fair. The settlement 

appears to be “the product of serious, informed, non-collusive negotiations, has no obvious 

deficiencies, does not improperly grant preferential treatment to class representatives or segments 

of the class, and falls within the range of possible approval.” In re Tableware, 484 F. Supp. 2d at 

1079. 

Nothing suggests the settlement was collusive. The parties previously disputed the 

Plaintiff’s standing to seek injunctive relief, as well as the propriety of class certification for 

determining liability and damages. Following the Court’s issuance of the initial certification order 

certifying the class for the purposes of determining liability only, ECF No. 54, the parties both had 

significantly more information about the strength of their positions. It was after the issuance of 

this order that the parties participated in an in-person, half-day mediation before a professional 

mediator and ultimately reached this settlement. 

Turning to a consideration of the substantive fairness of the settlement, the Court notes that 

its certification order indicated that Plaintiffs faced substantial obstacles to obtaining classwide 

monetary relief. The Court’s certification order indicated that Plaintiffs’ had sufficiently 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 11 of 15
12

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

demonstrated that the class was numerous, ascertainable, that the class representative satisfied the 

adequacy and typicality requirement, and that a class action was superior to other means for 

adjudicating the controversy. The Court concluded, however, that Plaintiffs had not shown that 

common questions predominated for the purposes of determining damages, as Plaintiffs had failed 

to present a damages model. See id. at 14-19. Although the Court concluded it could not certify 

the class for the purposes of ascertaining damages, the Court exercised its discretion to certify the 

class solely for determining the issue of liability under 23(c)(4).

In light of the difficulty Plaintiffs would face establishing damages on a classwide basis5

and the relatively small amount of money individual class members would be entitled to, the risk, 

expense, complexity, and likely duration of further litigation also support the conclusion that the 

settlement is substantively fair. In order to achieve this outcome in the absence of the settlement, 

Plaintiffs would first need to to succeed in establishing liability--which Defendant still contests--at 

trial. This would take a considerable amount of time and expense and Plaintiffs would not be 

certain to succeed. 

Even if Plaintiffs’ were to succeed in establishing liability and the Court were to grant 

injunctive relief, Plaintiffs would face further difficulty in obtaining monetary compensation for 

class members given the Court’s previous order declining to certify a class for the purposes of 

determining liability due to the absence of a viable damages model. It is unclear whether 

Plaintiffs would have been able to certify a class for damages at a later stage of the litigation, 

exposing Plaintiffs to a risk of losing class status at a later stage of the litigation. If such status 

were to be lost, the monetary reward individual Plaintiffs would be entitled to would likely be 

quite small. The Court noted in its prior order that “it is precisely in circumstances like these, 

where the injury to any individual consumer is small, but the cumulative injury to consumers as a 

group is substantial, that the class action mechanism provides one of its most important social 

benefits. In the absence of a class action, the injury would go unredressed.” ECF No. 54 at 7. 

 

5 Nothing in this order should be read as a comment on the ability (or lack of ability) of plaintiffs 

in other consumer cases to demonstrate classwide damages when the request is supported by an 

adequate damages model. 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 12 of 15
13

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

This purpose of the class action mechanism is partially vindicated by the terms of this settlement, 

which will serve to prevent future consumers from being injured by Defendant’s alleged 

mislabeling. 

The Court is also persuaded that the extent of discovery completed, the state of the 

proceedings, and the experience and views of counsel support approval of the settlement. This 

action was filed in June of 2013. Defendants conducted depositions of Plaintiffs and Plaintiffs 

obtained documents with information concerning the food labels, advertising, and pricing. As 

Plaintiffs’ note, counsel for both Plaintiffs and Defendant are firms with a significant amount of 

experience litigating these types of cases. Counsel for both parties advocated for their respective 

positions vigorously prior to reaching this settlement.

No governmental actor is relevant to this action, rendering that factor immaterial to the 

settlement approval process. 

The Court will wait until the final approval hearing to determine the reaction of the class 

members to the settlement. The named Plaintiffs favor approval.

Finally, the Court finds the parties’ agreement with respect to attorneys’ fees and service 

enhancement awards for named Plaintiffs Lilly and Cox falls “within the range of possible 

approval.” The Court will evaluate the requests for fees and service enhancement awards at the 

final approval hearing, after Plaintiffs’ counsel file their motion for fees and costs, and the class 

has an opportunity to object. 

IV. NOTICE TO ABSENT CLASS MEMBERS

Finally, Plaintiffs argue that notice to class members is not required because the settlement 

provides for injunctive relief only and settlement class members will not release any of their 

monetary claims for the mislabeling. ECF No. 60 at 8. Rule 23(e)(1) states that “[t]he court must 

direct notice in a reasonable manner to all class members who would be bound by the proposal.” 

Courts typically require less notice in Rule 23(b)(2) actions, as their outcomes do not truly 

bind class members. Rule 23(c)(2) provides that “[f]or any class certified under Rule 23(b)(1) or 

(b)(2), the court may direct appropriate notice to the class.” Fed. R. Civ. P. 2(c)(2) (emphasis 

added). Therefore, a Rule 23(b)(2) class is considered “mandatory,” as “[t]he Rule provides no 

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 13 of 15
14

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District 

Court to afford them notice of the action.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2558 

(2011). 

The Ninth Circuit does not appear to have directly the addressed the issue of whether class 

notice is required when a 23(b)(2) action is settled. In Jermyn v. Best Buy Stores, L.P., No. 08 

CIV. 214 CM, 2012 WL 2505644, at *12 (S.D.N.Y. June 27, 2012), Judge McMahon of the 

Southern District of New York approved a class action settlement for injunctive relief and held 

that class notice was not required. Drawing upon another case from the Southern District, Judge 

McMahon noted that “the key question in determining whether notice is required is ‘whether the 

rights of absent class members were compromised in any way.’” Id. (citing Selby v. Principal 

Mut. Life Ins. Co., No. 98 CIV. 5283(RLC), 2003 WL 22772330, at *4 (S.D.N.Y. Nov. 21, 

2003)). Because class members retained their right to sue for damages incurred from the 

challenged practice, but abandoned their ability to sue for alternative injunctive relief for the same 

challenged practice, the Court concluded that no notice was required. 

The Court finds Jermyn’s reasoning sound and adopts it here. Because, even if notified of 

the settlement, the settlement class would not have the right to opt out from the injunctive 

settlement and the settlement does not release the monetary claims of class members, the Court 

concludes that class notice is not necessary.

CONCLUSION

For the foregoing reasons, the Court hereby grants preliminary approval to the parties’ 

class action settlement. The Court will conduct a hearing on May 14, 2015 at 2:00 p.m. to 

determine whether the Court should grant final approval of the settlement and to determine the

appropriateness of Plaintiffs’ attorneys’ fees and costs and the incentive payments to the Class 

Representatives. 

/ / /

/ / /

/ / /

/ / /

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 14 of 15
15

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Class Counsel shall file their motion for attorneys’ fees and costs by no later than April 23, 

2015. 

IT IS SO ORDERED.

Dated: March 18, 2015

______________________________________

JON S. TIGAR

United States District Judge

Case 3:13-cv-02998-JST Document 65 Filed 03/18/15 Page 15 of 15