Hartless v. Clorox Co.
2011 WL 197542
S.D. Cal.2011Background
- Plaintiffs filed on December 13, 2006 alleging CLRA, UCL, and breach of implied warranty against Clorox regarding CATBC; defendants moved to dismiss and partial denial led to an amended complaint expanding the theory of claims.
- After extensive discovery and mediation in October 2009, the parties reached a settlement in principle and filed stipulations for preliminary approval in May 2010.
- The settlement defines a nationwide class (Dec. 13, 2002 to Sept. 15, 2010) for property-damage claims related to CATBC, with Clorox agreeing to modify label language and fund at least $7 million (up to $8 million) for class payments and related administration.
- Notice was disseminated broadly (internet impressions, newspaper circulation, and direct mail); a small number of class members opted out (10) and a few objected (3), with most supportive of the settlement.
- The court preliminarily approved the settlement, certified the class for settlement, and, after final fairness hearing, granted final approval, approved attorneys’ fees up to $2.25 million, approved service awards to class representatives, and dismissed the action with prejudice; unclaimed funds may be distributed cy pres.
- The court reserved jurisdiction to implement and enforce the final settlement and stipulation and authorized allocation of the fee award among counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement class should be certified for settlement. | Hartless argues the class satisfies Rule 23(a) and (b)(3) requirements. | Clorox contends commonality and predominance exist for settlement, and the class is cohesive. | Certified for settlement purposes under Rule 23(b)(3). |
| Whether the settlement is fundamentally fair, adequate, and reasonable under Rule 23(e). | Hartless asserts the settlement provides meaningful relief and avoids costly litigation. | Clorox contends the agreement balances risk and reward given defenses. | Final approval granted; settlement deemed fair, reasonable, and adequate. |
| Whether attorneys’ fees and costs are reasonable and properly calculated. | Plaintiffs seek up to $2.25 million; lodestar and percentage checks support reasonableness. | Defendant does not oppose the fee request; objections focus on calculation method and scope. | Fees of $2.25 million and costs approved; lodestar cross-checked with percentage method accepted. |
| Whether cy pres distribution of unclaimed funds is appropriate. | Cy pres serves as fallback for unclaimed funds and furthers class interests. | Cy pres should be used only after claims are exhausted and only for beneficial recipients. | Cy pres distributions approved as appropriate after claims process; no windfall to claimants. |
| Whether incentive awards to class representatives are appropriate; and whether Newman’s request for an incentive is merited. | Hartless and Wachowski receive modest awards for service; Newman’s incentive is unsubstantiated. | Incentives align with common practice and participant service; Newman’s request lacks support. | Hartless $4,000 and Wachowski $2,000 approved; Newman’s incentive denied. |
Key Cases Cited
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (class-action settlement must be fair, adequate, and free from collusion)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (commonality and typicality standards in class actions; predominance considerations)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (factors for evaluating settlement fairness and adequacy; settlement-prior-to-certification caution)
- Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393 (U.S. 2010) (Rule 23 constitutional under Rules Enabling Act; governing substantive fee questions)
- Six (6) Mexican Workers v. Arizona Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (cy pres considerations and unclaimed funds)
- In re Consumer Privacy Cases, 175 Cal.App.4th 545 (Cal. Ct. App. 4th Dist. 2009) (California cross-check of lodestar with percentage; allocation of fund as package)
- Rodriguez v. West Publ’g Corp., 563 F.3d 948 (9th Cir. 2009) (cy pres when unclaimed funds exist; claims process important)
- Williams v. MGM-Pathe Comm’cs Co., 129 F.3d 1026 (9th Cir. 1997) (avoid basing fee on claimed funds rather than entire settlement fund)