Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-04317/USCOURTS-cand-3_13-cv-04317-4/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1346 Tort Claim

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RYAN RICHARDS,

Plaintiff,

v.

SAFEWAY INC.,

Defendant.

Case No. 13-cv-04317-JD 

ORDER DISMISSING CASE

Re: Dkt. No. 67

Plaintiff Ryan Richards filed this putative class action alleging that defendant Safeway 

deceptively advertised certain products as “100% Natural” when they allegedly contained a 

synthetic ingredient known as sodium acid pyrophosphate (“SAPP”). On December 12, 2014, the 

parties filed a stipulation seeking dismissal of the case with prejudice. The Court ordered the 

parties to submit a statement regarding the fairness of the settlement to the absent putative class 

members. 

The Court has carefully reviewed the submission and approves the dismissal.

BACKGROUND

Mr. Richards filed an amended complaint on June 20, 2014, alleging eight claims for relief 

against Safeway. All claims relate to Safeway’s alleged labeling, marketing and sale of “100% 

Natural” products which, plaintiffs allege, actually contained one or more synthetic ingredients. 

Dkt. No. 45. The Safeway products at issue include Open Nature 100% Natural Multi-Grain 

Waffles and Open Nature 100% Natural Multi-Grain Waffles. Id. at 2. Mr. Richards alleges that 

both of these products are advertised and labeled as “100% Natural,” but contain SAPP. Id. He 

asserts that Safeway falsely and dishonestly induced health-conscious customers into purchasing 

these products at a premium price. Id. at 8. Mr. Richard seeks to represent national and 

California-resident classes of consumers who purchased Safeway’s food products that were 

labeled “100% Natural,” yet contained SAPP. Id. at 5. The amended complaint alleges the 

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United States District Court

Northern District of California

following claims: (1) a violation of California’s False Advertising Law, Business & Professions 

Code §§ 17500 et seq. (“FAL”), (2) a violation of California’s Consumer Legal Remedies Act 

(“CLRA”), (3) common law fraud, (4) negligent misrepresentation, (5) breach of express 

warranty, (6) breach of contract, (7) a violation of California’s Unfair Competition Law, Business 

and Professions Code §§ 17200-17208 (“UCL”), and (8) quasi-contract/unjust enrichment. Id. at 

15-25.

On December 12, 2014, the parties filed a stipulation seeking dismissal of the case with 

prejudice. See Dkt. No. 67. Because the Court was concerned about potential prejudice to absent 

class members, it ordered the parties to submit a statement discussing the fairness of the settlement 

to the absent putative class members. See Dkt. No. 68.

On January 8, 2015, the parties submitted a joint statement regarding the fairness of the 

settlement. See Dkt. No. 69. The parties stated that it is unlikely that absent class members have 

relied on the claims here, because the case has mostly been reported in the legal media. See id. at 

3. With respect to the effect of the statute of limitations on putative class members, the parties say 

that it would be impossible to calculate the time remaining for each member of the putative class, 

but point out that the statute of limitations has been tolled by plaintiff’s suit here. See id. at 4. 

Finally, the parties point out that only the plaintiff’s claims are being dismissed with prejudice; the 

missing putative class members’ rights are not being adversely affected. See id. at 4-5.

DISCUSSION

Federal Rule of Civil Procedure Rule 23(e) requires the Court to review and approve a 

proposed voluntary dismissal, settlement or other compromise of a certified class’s claims. The 

Ninth Circuit has held that Rule 23(e) also applies before certification, but in a much lighter form 

that does not entail “the kind of substantive oversight required when reviewing a settlement 

binding upon the class.” Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401, 1408 (9th Cir. 

1989). This holding pre-dates substantial amendments to Rule 23 in 2003, and courts in this 

district have noted “some uncertainty” about the continued application of Rule 23(e) to precertification settlement proposals in the wake of the 2003 amendments. See, e.g., Lyons v. Bank of 

America, NA, No. C 11-1232 CW, 2012 WL 5940846, at *1 n.1 (N.D. Cal. Nov. 27, 2012). But 

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our decisions have “generally assumed that it does” apply, id., and this Court will follow Diaz to 

evaluate the proposed settlement and dismissal here. The Court finds that this approach is 

consistent with Rule 23(e) as it exists today. It also strikes the right balance between the full-bore 

fairness review for settlement of certified class claims, and doing nothing at all to ensure that 

putative class members are protected from collusive deals and not sacrificed for convenience when 

named representatives decide to settle their claims individually.

To determine whether pre-certification settlement or dismissal is appropriate, the Court 

must assess potential prejudice to the absent putative class members from: (1) “possible reliance 

on the filing of the action if they are likely to know of it either because of publicity or other 

circumstances”; (2) “lack of adequate time for class members to file other actions, because of a 

rapidly approaching statute of limitations”; and (3) “any settlement or concession of class interests 

made by the class representative or counsel in order to further their own interests.” Diaz, 876 F.2d 

at 1408. “The central purpose of this inquiry is to ‘determine whether the proposed settlement and 

dismissal are tainted by collusion or will prejudice absent putative members.’” Lyons, 2012 WL 

5940846, at *1 (citing Mahan, 2010 WL 4916417, at *3).

The Court finds that the parties have satisfied the Diaz factors for the reasons given in the 

Background section, above. Although the parties did not provide the Court with the proposed 

settlement agreement, the parties have represented to the Court that under the settlement, Mr. 

Richards would voluntarily dismiss all his claims against Safeway with prejudice, while the 

putative class claims would be dismissed without prejudice. See Dkt. No. 69 at 1-2.

The Court therefore dismisses Mr. Richards’ individual claims with prejudice and the 

putative class claims without prejudice. The clerk is directed to enter final judgment.

IT IS SO ORDERED.

Dated: January 12, 2015

______________________________________

JAMES DONATO

United States District Judge

Case 3:13-cv-04317-JD Document 70 Filed 01/12/15 Page 3 of 3