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Rikos v. Procter & Gamble Co.

United States District Court, S.D. Ohio, Western Division

April 30, 2018

DINO RIKOS, TRACEY BURNS, and LEO JARZEMBROWSKI, On behalf of themselves and all others similarly situated, Plaintiffs,


          Timothy S. Black United States District Judge.

         This civil case is before the Court on the motion of Defendant, The Proctor & Gamble Company, for final approval of class action settlement (Doc. 169), the motion of Plaintiffs for final approval of class action settlement and request for award of attorneys' fees and expenses (Doc. 170), and the oral arguments presented by counsel at the fairness hearing on April 16, 2018.

         I. BACKGROUND

         A. Litigation History.

         This case concerns Defendant's labeling and advertising of Align, an over-the-counter probiotic supplement. Align is promoted as helping to build and maintain a healthy digestive system, restore natural digestive balance, and protect against occasional digestive upsets. (Doc. 165 at ¶ 1).

         Plaintiffs allege Align does not deliver the advertised benefits. (Doc. 165 at ¶¶ 1-3). On September 21, 2010, Plaintiff Dino Rikos filed a class action complaint challenging Align's labeling and advertising. (Doc. 1). On August 17, 2012, Plaintiff Rikos filed a Second Amended Class Action Complaint that added Tracey Burns and Leo Jarzembowski as named Plaintiffs and proposed Class Representatives. (Doc. 85). Plaintiffs alleged five single-state classes consisting of consumers who purchased Align in California, Florida, Illinois, New Hampshire, and North Carolina.

         On January 13, 2014, Plaintiffs moved to certify five classes pursuant to Rules 23(a) and 23(b)(3) and to appoint Plaintiff Dino Rikos as Class Representative of the California and Illinois classes, Plaintiff Tracey Burns as Class Representative of Florida and North Carolina classes, and Plaintiff Leo Jarzembowski as Class Representative of a New Hampshire class. (Docs. 108, 110). On June 19, 2014, the Court granted Plaintiffs' motion for certification. (Doc. 140).

         Defendant appealed the certification order to the United States Court of Appeals for the Sixth Circuit, which affirmed this Court's order. See Rikos v. P&G, 799 F.3d 497 (6th Cir. 2015). Defendant petitioned the Supreme Court for writ of certiorari. Plaintiffs opposed the petition, which the Supreme Court denied. (Doc. 166-1 at ¶¶ 17-19).

         The litigation in this case was contentious and extensive. Counsel negotiated confidentiality and ESI protocols. (Doc. 166-1 at ¶ 25). Plaintiffs' counsel obtained, reviewed and analyzed approximately 752, 341 pages of hard-copy and electronic documents produced by Defendant and an additional 20, 280 pages of documents produced in response to over 30 subpoenas served by Plaintiffs on third-parties. (Id. at ¶¶ 24, 27-31). The parties deposed 19 witnesses, including Defendant's scientists and marketing personnel, third-party scientists, and two of Defendant's primary scientific experts. (Id. at ¶¶ 30-32). Defendant deposed each of the named Plaintiffs. (Id. at ¶ 32). The parties exchanged 21 reports from 14 retained experts on issues relating to advertising, marketing, gastroenterology, microbiology, biostatistics, FDA regulations, and damages. (Id. at ¶¶ 22, 34-37).

         B. Mediation Efforts.

         The parties have participated in multiple mediations over the course of this lawsuit. On September 19, 2011, the parties participated in an all-day mediation with Mark D. Peterson of Farella Braun & Martel LLP. (Doc. 166-1 at ¶ 40). No settlement was reached.

         The parties participated in a second mediation with mediator David P. Kamp in Cincinnati, Ohio. (Doc. 166-1 at ¶ 41). Following this mediation, Mr. Kamp met with the parties separately in Cincinnati and San Diego. (Id.)

         On March 13, 2017, the parties participated in an all-day mediation in San Francisco, California, conducted by Antonino Piazza. (Doc. 166-1 at ¶ 42). Although no settlement was reached, the parties continued discussing settlement including with the assistance of Mr. Piazza. (Id.) The parties' settlement discussions occurred over telephone and electronic mail and were numerous, lengthy, and complex. (Id.) On May 1, 2017, the parties agreed to a settlement term sheet. (Id.) The proposed attorneys' fees and expenses were negotiated after the parties agreed on the principal terms of the settlement and with the assistance of the mediator. (Id.). Over the course of the next four months, the parties negotiated all aspects of the settlement (“Settlement”) and eventually executed the settlement agreement (“Settlement Agreement”). (Id. at ¶ 43).[1]

         C. The Settlement Agreement.

         Under the Settlement Agreement, Defendant will pay up to about $30.3 million in settlement benefits, with a minimum of $20.3 million in benefits. (Doc. 170 at 18).

         First, under the Settlement, Settlement Class Members may receive a Cash Refund of up to $49.26 for three purchases of Align. (Settlement Agreement, § IV(A)(2)). The Cash Refund amount represents 50% of Align's average retail price. (Doc. 170 at 20). Defendant will pay out up to $15 million in Cash Refunds. (Settlement Agreement, § IV(A)(2)).

         Second, in addition to Cash Refunds, Defendant will contribute a minimum of $5 million and up to $10 million worth of Digestive Health Improvement Contributions (“DHIC”). (Doc. 170 at 21; Settlement Agreement, § IV(A)). The DHIC are in addition to and do not reduce the $15 million available for Cash Refunds. (Settlement Agreement, § IV(A)(1)(b)). The DHIC will be in the form of: (1) intellectual property and/or know-how; (2) research and/or education grant(s); and/or (3) product donations to research and/or educational institutions and/or programs working to improve digestive heath. (Settlement Agreement, § IV(A)(1)(a)). Defendant will have discretion to select the recipients, and form, of the DHIC subject to prior review and approval by Class Counsel. (Id.)

         Third, the Settlement Agreement provides injunctive relief by prohibiting Defendant from making the “clinically proven” five symptom relief claims contained on the Align packaging sold to consumers from approximately March 1, 2009 through October 31, 2009, absent new supporting clinical data and/or analysis or a change in product formula. (Settlement Agreement at § IV(B)(1)).

         Fourth, Defendant agrees to pay all Notice and Claim Administration Expenses separate and apart from any other consideration paid under the Settlement. (Settlement Agreement, § VI(A)(1)).

         Fifth, Class Counsel, on behalf of all Plaintiffs' Counsel, will apply for an award of Attorneys' Fees and Expenses not to exceed $4.5 million. (Settlement Agreement, § IX(A)). Defendant agrees not to oppose an application for these amounts (the “Clear Sailing” provision). (Id.)

         Sixth, Class Counsel will apply for service awards of $2, 500 each for the Class Representatives for their time invested in connection with this case. (Settlement Agreement, § IX(C)).

         Finally, in consideration for the foregoing, the Settlement Class Members release Defendant from the following claims:

[W]ith the exception of claims for personal injury, all claims, demands, actions, suits, and/or causes of action that have been brought or could have been brought, are currently pending or were pending, or are ever brought in the future, by any Settlement class Member against P&G or any Released Party, in any forum in the United States and its territories, whether known or unknown, asserted or unasserted, under or pursuant to any statute, regulation, common law or equity, that relate in any way, directly or indirectly, to facts, acts, events, transactions, occurrences, courses of conduct, representations, omissions, circumstances or other matters related to or referenced in any claim raised (including, but not limited to, any claim that was raised against any Released Party) in this Action, including damages, costs, expenses, penalties, and attorneys' fees.

(Settlement Agreement, §§ II(A)(28), VIII).

         D. Class Notice Program.

         The Settlement Agreement provides for notice primarily through print and digital publication. (Settlement Agreement, § VI(C)(1)). This is because Align was sold over-the-counter at retail stores and Defendant does not have contact information for Settlement Class Members. (See Doc. 166 at 24).

         Specifically, notice was provided in the following print publications: Cooking Light, Men's Health, People, and Woman's Day. (Doc. 170-9 at ¶ 5). These particular print publications were chosen because of the likelihood they will reach probiotics consumers. (Doc. 166-5 at ¶ 20).

         On January 10, 2018, a settlement website ( was established. (Doc. 170-9 at ¶ 16). The website provides notice of the Settlement, the Settlement Agreement, answers to frequently asked questions, the Third Amended Class Action Complaint, the Order Preliminarily Approving Class Action Settlement, Plaintiffs' Motion for Preliminary Approval, and Claim Form Instructions. (Id.) The website also allows Settlement Class Members to submit a Claim Form online. (Id.)

         Additionally, notice was provided via internet banner ads, sponsored advertising in the “Top Class Actions” website and newsletter, paid search efforts, and internet “lookalike” targeting efforts. (Doc. 170-9 at ¶¶ 12-15).

         Under the Class Notice Program, notice reached more than 80% of Settlement Class Members, on average, 2.7 times. (Doc. 170-9 at ¶ 25). As of March 1, 2018, the Claims Administrator had not received any requests for exclusion. (Doc. 170-9 at ¶ 19). Five individuals filed written objections to the Settlement. (Docs. 171, 173, 174, 175).[2]The deadline for Settlement Class Members to submit or file a claim form is May 16, 2018; as of February 28, 2018, the Claims Administrator had processed 151, 445 Claim Forms. (Doc. 170-9 at ¶ 21).

         II. ANALYSIS

         A. The Settlement Class is appropriate for Rule 23 certification.

         Plaintiff's motion for final approval asks the Court to certify the Settlement Class pursuant to Federal Rule of Civil Procedure 23. (Doc. 170 at 32-36). The Settlement Class is defined as:

all persons who purchased within the United States and its territories P&G's Align, other than solely for purposes of resale, from March 1, 2009 to June 6, 2016. Excluded from the Settlement Class are: (i) Defendant and its officers, directors, and employees; (ii) any person who files a valid and timely Request for Exclusion; and (iii) judicial officers and their immediate family members and associated court staff assigned to the case.

(Settlement Agreement, § II(34)).

         The benefits of a settlement can be realized only through the final certification of a settlement class. Wess v. Storey, Case No. 2:08-cv-623, 2011 U.S. Dist. LEXIS 41050, at * 17 (S.D. Ohio Apr. 14, 2011). The Court maintains broad discretion in deciding whether to certify a class. Id.

         The Settlement Class is substantially similar to the five single-state classes already certified by this Court and affirmed by the Sixth Circuit, with the exception that it is expanded to a nationwide class. Upon an additional consideration of the Rule 23 factors, the Court finds it appropriate to certify the Settlement Class for reasons similar to those stated in its previous certification order. See In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., Case No. 1:08-WP-65000 (MDL 2001), 2016 U.S. Dist. LEXIS 130467, at * 23 (N.D. Ohio Sept. 23, 2016) (certifying a nationwide class for settlement purposes because “[t]hat the settlement class is modestly broader than the certified litigation does not undermine the fundamental cohesion” among the class).

         1. Numerosity.

         Rule 23(a)(1) requires a plaintiff to demonstrate that “the class is so numerous that joinder of all members is impracticable.” While no specific number of class members is required to maintain a class action, “[w]hen class size reaches substantial proportions . . . the impracticability requirement is usually satisfied by the numbers alone.” In re Am. Med. Sys. Inc., 75 F.3d 1069, 1079 (6th Cir. 1996) (citation omitted).

         The Settlement Class is substantial. Between 2009 and 2013, Defendant sold over 9.5 million packages of Align. (Doc. 140 at 16). The Court finds the size of the Settlement Class in this case easily satisfies the numerosity requirement.

         2. Commonality.

         Rule 23(a)(2) requires “questions of law or fact common to the class.” This requirement is interdependent with the impracticability of joinder requirement. In re Am. Med. Sys., Inc., 75 F.3d at 1080. Together, these tests form the conceptual basis for class actions. Id. The Sixth Circuit has explained:

The class-action was designed as an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only. Class relief is particularly appropriate when the issues involved are common to the class as a whole and when they turn on questions of law applicable in the same manner to each member of the class. In such cases, the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every class member to be litigated in an economical fashion under Rule 23.

Id. at 1076 (quoting General Telephone v. Falcon, 457 U.S. 147, 155 (1982)).

         Here, the commonality requirement is easily met. Determining whether Align provides any digestive health benefit is a common question that will advance the litigation. See Wiener v. Dannon Co., 255 F.R.D. 658, 667 (C.D. Cal. 2009) (proposed class members in a consumer protection claim regarding digestive health benefits of probiotics “clearly share common legal issues regarding [Defendant's] alleged deception and misrepresentations in its advertising and promotion of the Products”); see also Fitzpatrick v. General Mills, Inc., 635 F.3d 687, 696 (S.D. Fla. 2010) (“Whether General Mills' claim that YoPlus aids in the promotion of digestive health is ‘deceptive' is a mixed question of law and fact common to every class member”).

         3. Typicality.

         Rule 23(a)(3) provides that “the claims or defenses of the representative parties [shall be] typical of the claims or defenses of the class.” The typicality element is designed to assess “whether a sufficient relationship exists between the injury to the named plaintiff and the conduct affecting the class, so that the court may properly attribute a collective nature to the challenged conduct.” Sprague v. General Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998). A plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if the named plaintiff's claims are based on the same legal theory. In re Am. Med. Sys., Inc., 75 F.3d at 1082.

         Here, Plaintiffs and the proposed class assert the same claims, premised on the same legal theories, arising from the same course of conduct-Defendant's representations about the digestive health benefits of Align. For each class member to recover under the claims at issue, each must prove the same elements as the named Plaintiffs. Accordingly the typicality element is satisfied.

         4. Adequacy of Representation.

         Rule 23(a)(4) requires that “the representative parties will fairly and adequately protect the interest of the class.” The Sixth Circuit has counseled that there are two criteria for determining this element: (1) the representatives must have common interests with the unnamed class members, and (2) it must appear that the representatives will vigorously prosecute the class action through qualified counsel. See Senter v. Gen. Motors Corp., 532 F.2d 511, 524-25 (6th Cir. 1976) (citation omitted).

         Here, Plaintiffs and the Class Members possess the same interest and suffered the same injury: each of them purchased Align and were subject to the same allegedly false advertising. Accordingly, Plaintiffs are adequate Class Representatives and satisfy the first prong of the adequacy requirement. See Int'l Union, United Auto., Aerospace & Agr. Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615, 626 (6th Cir. 2007) (“Class representatives are adequate when it appears that they will vigorously prosecute the interest of the class through qualified counsel . . . which ...

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