Schneider v. Chipotle Mexican Grill, Inc., 4:16-cv-02200

Background

Plaintiffs sued Chipotle alleging its "non-GMO" and "GMO free" marketing was false because meat/dairy came from animals fed GMO feed and some beverages contained GMO corn syrup; they sought consumer-protection, false-advertising, unjust-enrichment, and related claims.
The court previously granted in part/denied in part motions to dismiss, certified state-based classes (California, Maryland, New York) for purchases in Chipotle restaurants during April 27, 2015–June 30, 2016, and later the parties negotiated a nationwide class settlement.
After mediation, parties agreed to a settlement: $6.5 million non-reversionary fund to pay claims, administration, incentive awards (up to $5,000 each), and attorneys’ fees (request up to 30% + costs); individual claims capped ($10–$20 depending on proof) and household claim caps apply.
Settlement releases are broad (releasing claims related to purchase of Food Products marketed as non-GMO during the Class Period); uncashed checks revert to two cy pres recipients (Public Justice and Public Counsel).
The Court provisionally certified the proposed nationwide Settlement Class for settlement purposes, found Rule 23(b)(3) predominance and superiority satisfied for settlement, and granted preliminary approval of the settlement and leave to file the amended complaint.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to provisionally certify a nationwide settlement class under Rule 23(b)(3) (predominance/superiority)	Nationwide class appropriate because class members were exposed to uniform non-GMO representations and common proof predominates; manageability concerns are reduced for settlement classes.	Defendant highlighted prior state-limited certification and litigated class-definition issues; opposed overbroad notice proposals.	Court provisionally certified nationwide Settlement Class for settlement purposes, finding common questions predominate and class action is superior.
Whether the settlement merits preliminary approval (fair, adequate, reasonable) given heightened scrutiny for pre-certification settlements and potential collusion	Settlement is the product of arm’s-length mediation, is non-reversionary, compensates class members, and reflects litigation risks so it is within the range of possible approval.	(Implicit) Concerns over clear-sailing fee provision and whether attorney fees and incentives are commensurate with class recovery.	Court granted preliminary approval, finding no signs of collusion that preclude preliminary approval; will scrutinize fees and incentives at final approval.
Whether the clear‑sailing fee arrangement and requested fees/costs raise conflict/collusion concerns	Counsel contends fee request (up to 30%) is supported by lodestar cross-check and contingencies; fee is not disproportionate to class recovery.	Defense agreed not to oppose fees up to the cap (clear sailing).	Court noted clear-sailing is a warning sign but found here the fee request would not be disproportionate; will perform close review at final approval.
Adequacy of notice plan (digital campaign + publication versus direct notice)	Plaintiffs argued direct notice lists unavailable; proposed programmatic digital campaign and publication in People and East Bay Times to reach estimated target audience.	Defendant previously opposed direct email to online purchasers as overly broad and misdefining class membership.	Court approved the proposed digital/publication notice plan as reasonably calculated to reach class members under Rule 23(c)(2)(B).

Key Cases Cited

Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (Rule 23(a) commonality/typicality framework)
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (distinguishing common vs. individualized questions and class‑wide proof)
In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) (heightened attention to settlement‑class definition; differing treatment of settlement vs. litigation classes)
Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035 (9th Cir. 2019) (heightened scrutiny for pre‑certification settlements and signs of collusion)
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (2011) (clear‑sailing provisions and warning signs of collusion)
Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012) (cy pres constraints and nexus to the class)
In re Heritage Bond Litig., 546 F.3d 667 (9th Cir. 2008) (standard: settlement must be fundamentally fair, adequate, and reasonable)
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) (requirements for individual notice to identifiable class members)
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due process notice standards)
Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (percentage‑of‑recovery benchmark and lodestar cross‑check for fee awards)