James Keller v. Gaspari Nutrition Inc
2:11-cv-06158
C.D. Cal.Mar 20, 2012Background
- Keller sued Gaspari Nutrition in a California class action seeking relief under consumer protection laws related to Novedex XT recall.
- Settlement provides a $1,000,000 non-reversionary common fund: $750,000 cash and $250,000 in Gaspari Viridex XT product.
- No release of personal injury claims; restitutionary relief limited to monetary refunds or product substitutions for class members.
- Class members may claim $20 per bottle with proof of purchase (up to four bottles) or $10 per bottle without proof with a signed purchase declaration; alternatives include up to two Viridex XT bottles.
- Notice procedures included a settlement website, toll-free line, press outreach, and broad internet advertising; as of claims cutoff, thousands of views and hundreds of claims were submitted.
- Court preliminarily approved the settlement; the current motion requests final approval and approval of attorneys’ fees, costs, and an incentive award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether final approval is appropriate | Class recovery is fair given risks and costs of continued litigation. | Settlement is fair but merits further scrutiny of terms and class viability. | Final approval granted; terms fair, adequate, and reasonable. |
| Whether attorney fees are reasonable | Fees at 25% of the common fund reflect customary benchmark and work performed. | Fees may be excessive given size of fund and objections. | 25% fee approved as reasonable and consistent with the benchmark. |
| Whether the named plaintiff's incentive award is appropriate | Keller contributed time and effort protecting the class; award justified. | Incentive awards should be limited to ensure funds favor class members. | Incentive award of $3,000 approved. |
| Whether costs are reasonable and properly allocated | Costs align with standard practice and reflect actual expenditures. | Costs should be scrutinized to ensure reasonableness. | Costs of $9,004.27 approved. |
| Whether class certification for settlement purposes remains appropriate | Class satisfies Rule 23(a) and 23(b)(3) for settlement purposes. | Certification could be challenged at trial; court should certify for settlement only. | Court reaffirmed prior certification for settlement purposes. |
Key Cases Cited
- Torrisi v. Tucson Electric Power Co., 8 F.3d 1375 (9th Cir. 1993) (multi-factor test for settlement fairness; one factor may drive outcome)
- Linney v. Cellular Alaska Partnership, 151 F.3d 1234 (9th Cir. 1998) (courts may grant settlement approval with adequate information and discovery)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standard for evaluating class action settlements and fairness)
- National Rural Telecommunications Cooperative v. DirectTV, Inc., 221 F.R.D. 523 (C.D. Cal. 2004) (presumption of fairness when aggressive arm's-length negotiations and counsel experience)
- In re Mego Financial Corp. Sec. Litig., 213 F.3d 454 (9th Cir. 2000) (counsel experience and absence of collusion support approval)
- In re Omnivision Technologies, Inc., 559 F. Supp. 2d 1036 (N.D. Cal. 2008) (considerations for evaluating settlement in complex actions)
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (proper cy pres distribution considerations and factors)
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (incentive awards must be reasonable and tied to class benefit)
