Paulson v. Dynamic Pet Prods., LLC
560 S.W.3d 583
Mo. Ct. App.2018Background
- Multiple class actions challenged Dynamic Pet Products' “Real Ham Bone for Dogs” as deceptively advertised and dangerous; plaintiffs filed in Missouri (Taylor) and objectors filed in California (Reed and related cases).
- Plaintiffs and Defendants participated in two court-ordered mediations; Objectors' counsel was invited, attended, and participated in mediation sessions but did not appear at the preliminary approval hearing.
- Parties executed a term sheet for a nationwide settlement: $2.4M gross, with a common fund and separate caps for injury claims and purchase refunds; attorneys’ fees/administration/incentives up to $1,050,000; unclaimed funds revert to Defendants.
- Trial court gave preliminary approval, ordered notice and objection deadlines, denied Objectors’ motion to intervene, later granted final approval and entered judgment; mediator Phillips submitted a declaration that negotiations were arm’s-length.
- Objectors appealed, arguing (1) settlement was collusive/reverse auction and violated due process/is unfair, (2) the mediator’s declaration violated mediator impartiality and should be stricken, and (3) the court erred by denying intervention. Appellate court affirmed.
Issues
| Issue | Objectors' Argument | Plaintiffs/Defendants' Argument | Held |
|---|---|---|---|
| Standing / Intervention | Objectors needed to intervene to preserve right to appeal; denial was erroneous | Timely objections at fairness hearing suffice; intervention unnecessary | Denied — timely objections gave appellate standing; denial of intervention not error |
| Mediator Declaration | Declaration violated mediator impartiality and should be stricken; court erred by relying on it | Objectors abandoned strike request by not pursuing it at final hearing; declaration was cumulative | Denied — strike waived/abandoned; record shows court did not rely on it and any duplication was cumulative |
| Reverse auction / collusion; fairness of settlement | Settlement was product of collusion/reverse auction; many due-process and fairness defects making settlement inadequate | Objectors participated in mediation and had full opportunity to raise issues; many appellate points are multifarious, waived, or sandbagged | Denied — points were procedurally defective (Rule 84.04), many waived by sandbagging; settlement approval supported by record |
| Attorneys’ fees & notice sufficiency | Fee award and notice procedures were improper and unknown at prelim. approval | Fee cap disclosed in term sheet; actual fee request below cap; notice plan and administration approved | Denied — fee amount was within disclosed cap and objection to fees not properly preserved in point relied on |
Key Cases Cited
- Marino v. Ortiz, 484 U.S. 301 (U.S. 1988) (only parties or proper intervenors may normally appeal)
- Devlin v. Scardelletti, 536 U.S. 1 (U.S. 2002) (non-named class members who timely object at fairness hearing may appeal without intervening)
- Puckett v. United States, 556 U.S. 129 (U.S. 2009) (contemporaneous-objection rule bars sandbagging on appeal)
- Tech. Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692 (11th Cir. 2017) (defines “reverse auction” in class-settlement context)
- Vermillion v. Burlington N. R.R. Co., 813 S.W.2d 947 (Mo. App. E.D. 1991) (motions may be waived or abandoned by failing to pursue them)