Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 1 of 17
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`STEPHEN HADLEY, et al.,
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`Plaintiffs,
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`v.
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`KELLOGG SALES COMPANY,
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`Defendant.
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`Case No. 16-CV-04955-LHK
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`ORDER DENYING WITHOUT
`PREJUDICE MOTION FOR
`PRELIMINARY APPROVAL
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`Re: Dkt. No. 325
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`Plaintiffs Stephen Hadley, Melody DiGregorio, Eric Fishon, Kerry Austin, and Nafeesha
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`Madyun (“Plaintiffs”) bring a putative class action against Kellogg Sales Company (“Kellogg”)
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`for violations of California and New York law that arise from allegedly misleading statements on
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`Kellogg’s food product packaging. Before the Court is Plaintiffs’ motion for preliminary approval
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`of class action settlement. ECF No. 325. The Court held a hearing on this motion on February 6,
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`2020. Having considered Plaintiffs’ motion, the arguments of counsel at the February 6, 2020
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`hearing, and the record in this case, the Court DENIES without prejudice Plaintiffs’ motion for
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`preliminary approval of class action settlement.
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`I. LEGAL STANDARD
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`Federal Rule of Civil Procedure 23(e) provides that “[t]he claims, issues, or defenses of a
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 2 of 17
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`certified class may be settled . . . only with the court’s approval.” Fed. R. Civ. P. 23(e). “The
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`purpose of Rule 23(e) is to protect the unnamed members of the class from unjust or unfair
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`settlements affecting their rights.” In re Syncor ERISA Litig., 516 F.3d 1095, 1100 (9th Cir.
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`2008). Accordingly, in order to approve a class action settlement under Rule 23, a district court
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`must conclude that the settlement is “fundamentally fair, adequate, and reasonable.” Hanlon v.
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`Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).
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`Where “the parties negotiate a settlement before the class has been certified, settlement
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`approval requires a higher standard of fairness and a more probing inquiry than may normally be
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`required under Rule 23(e).” Roes, 1–2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1048 (9th Cir.
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`2019) (internal quotation marks and citations omitted). In such cases, the Court must apply “an
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`even higher level of scrutiny for evidence of collusion or other conflicts of interest than is
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`ordinarily required under Rule 23(e) before securing the court’s approval as fair.” In re Bluetooth
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`Headset Prods. Liab. Litig., 654 F.3d 935, 946 (9th Cir. 2011). Signs of potential collusion
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`include:
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`(1) “when counsel receive a disproportionate distribution of the settlement”; (2)
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`“when the parties negotiate a ‘clear sailing’ arrangement” (i.e., an arrangement where
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`defendant will not object to a certain fee request by class counsel); and (3) when the
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`parties create a reverter that returns unclaimed fees to the defendant.
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`Allen v. Bedolla, 787 F.3d 1218, 1224 (9th Cir. 2015) (quoting In re Bluetooth, 654 F.3d at
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`947).
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`II. DISCUSSION
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`In the instant case, Plaintiffs allege violations of California and New York law that arise
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`from allegedly misleading statements on Kellogg’s food product packaging. ECF No. 324
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`(“TAC”). Plaintiffs seek preliminary approval of the settlement on behalf of a settlement class of
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`“all persons in the United States who, between August 29, 2012 and the date a motion for
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`preliminary approval is filed [i.e., October 21, 2019], purchased in the United States, for
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`household use and not for resale or distribution, one of the Class Products.” ECF No. 325-1 Ex. A
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 3 of 17
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`(“Settlement Agmt.”) ¶ 4. Plaintiffs define the “Class Products,” in turn, as various sizes and
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`varieties of six different Kellogg products: Raisin Bran, Krave, Frosted Mini-Wheats, Smart Start,
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`Crunchy Nut, and Nutri-Grain Bars. Id. at Appx. 1.
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`The Court DENIES without prejudice the motion for preliminary approval of class action
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`settlement on several bases. First, the release of the claims is overbroad. Second, it is unclear
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`whether certification of the settlement class is appropriate under Federal Rule of Civil Procedure
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`23(b)(3). Third, the parties fail to provide sufficient information to justify a proposed reversion to
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`Kellogg. Fourth, the claim form, opt-out form, and notice forms contain numerous errors that
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`result in inadequate disclosure of various aspects of the settlement to class members. Fifth, the
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`settlement structure is currently inconsistent with the fact that the voucher portion of the
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`settlement constitutes a coupon settlement under the Class Action Fairness Act (“CAFA”), 28
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`U.S.C. § 1712.
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`Any of these bases would be sufficient to deny the motion for preliminary approval. The
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`Court discusses each in turn.
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`A. The Proposed Release Is Overbroad.
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`The Court concludes that the release contained within the proposed settlement agreement
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`conflicts with Ninth Circuit precedent, which only allows release of claims “where the released
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`claim[s] [are] based on the identical factual predicate as that underlying the claims in the settled
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`class action.” Hesse v. Sprint Corp., 598 F.3d 581, 590 (9th Cir. 2010) (internal quotation marks
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`and citation omitted); see also Chavez v. PVH Corp., No. 13-CV-01797-LHK, 2015 WL 581382,
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`at *5 (N.D. Cal. Feb. 11, 2015) (“District courts in this Circuit have declined to approve settlement
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`agreements where such agreements would release claims that are ‘factually related’ to the claims
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`in the instant litigation.”).
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`Under the settlement agreement, when class members decline to opt out of the settlement,
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`the class members release “any and all claims, demands, rights, suits, liabilities, injunctive and/or
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`declaratory relief, and causes of action of every nature and description whatsoever, including
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`costs, expenses, penalties, and attorneys’ fees, whether known or unknown, matured or
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 4 of 17
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`unmatured, at law or in equity, existing under federal or state law, that any Class member has or
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`may have against the Released Kellogg Persons arising out of or related in any way to the
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`transactions, occurrences, events, behaviors, conduct, practices, and policies alleged in the Actions
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`regarding the Class Products, which have been, or which could have been asserted in the Actions,
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`and in connection with the conduct of the Actions, that have been brought, could have been
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`brought, or are currently pending in any forum in the United States.” ECF No. 325 (“Mot.”) at 8
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`(emphasis added).
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`In light of this sweeping language, the settlement releases claims that are not “based on the
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`identical factual predicate as that underlying the claims in the settled class action.” Hesse, 598
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`F.3d at 590. The parties must narrow the scope of the release consistent with Ninth Circuit law in
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`any future settlement.
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`B. The Court Is Unable to Determine Whether the Settlement Class Satisfies Rule
`23(b)(3).
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`“In deciding whether to certify a settlement class, a district court must give heightened
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`attention to the definition of the class or subclasses.” In re Hyundai and Kia Fuel Economy Litig.,
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`926 F.3d 539 (9th Cir. 2019) (en banc). This is especially so where, as here, the parties seek to
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`certify a settlement class that was not previously certified by the Court. See SFBSC Mgmt., 944
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`F.3d at 1048 (holding that where “the parties negotiate a settlement before the class has been
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`certified, settlement approval requires a higher standard of fairness and a more probing inquiry
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`than may normally be required under Rule 23(e)”); Schneider v. Chipotle Mex. Grill, No. 16-cv-
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`02200-HSG, 2020 WL 511953, at *8 (N.D. Cal. Jan. 31, 2020) (“Because the parties seek to
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`certify a nationwide Settlement Class that is broader than the certified class, the Court applies the
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`heightened standard in assessing whether to grant preliminary approval of the class settlement.”).
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`“[C]ertification is proper only if ‘the trial court is satisfied, after a rigorous analysis, that the
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`prerequisites of Rule 23[] have been satisfied.’” Comcast v. Behrend, 569 U.S. 27, 33 (2013)
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`(quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350–51 (2011)).
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`Here, the Court cannot determine whether the settlement class satisfies the predominance
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 5 of 17
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`requirement of Federal Rule of Civil Procedure 23(b)(3). The predominance “inquiry tests
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`whether the proposed classes are sufficiently cohesive to warrant adjudication by representation.”
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`Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (internal quotation marks and
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`citation omitted).
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`In the instant case, Plaintiff Stephen Hadley previously moved to certify a class that
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`consisted of the following four subclasses:
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`[A]ll persons in California who, on or after August 29, 2012, purchased for household
`use and not for resale or distribution:
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`Raisin Bran Subclass: Kellogg’s Raisin Bran (including Omega-3) or Kellogg’s
`Raisin Bran Crunch Cereals in a 13.7 oz., 14.3 oz., 18.2 oz., 18.7 oz., 23.5 oz., 24.8
`oz., 29 oz., 30.3 oz., 43.3 oz., 56.6 oz., or 76.5 oz. package stating “heart healthy.”
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`Smart Start Subclass: Kellogg’s Smart Start Original Antioxidants cereal in a 17.3
`oz. package.
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`Frosted Mini-Wheats Subclass: Kellogg’s Frosted Mini-Wheats Bite Size
`(Original, Maple Brown Sugar, Strawberry, or Blueberry varieties), Big Bites
`(Original variety), Little Bites (Chocolate or Cinnamon Roll varieties), or Touch of
`Fruit in the Middle (Mixed Berry and Raspberry varieties) cereals in a 15.2 oz., 15.5
`oz., 15.8 oz., 16.5 oz., 18 oz., 21 oz., or 24 oz. package.
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`Nutri-Grain Soft-Baked Breakfast Bar Subclass: Kellogg’s Nutri-Grain Soft-
`Baked Breakfast Bars (Blueberry, Strawberry, Cherry, Raspberry, and Variety Pack
`varieties), in 8-bar, 9-bar, 16-bar, or 24-bar counts with packaging stating, “the
`wholesome goodness you need to shine your brightest!”
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`ECF No. 129.
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`Kellogg argued in opposition that many of the challenged statements in the instant
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`case “did not appear on the packaging for a substantial portion of the class period.” ECF
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`No. 208 at 11. (internal quotation marks and alterations omitted). The Court noted,
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`however, that Rule 23(b)(3)’s predominance requirement was met because the proposed
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`subclass definitions contained “only those individuals who purchased versions of the
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`products that included the challenged statements on the packaging.” ECF No. 208 at 12
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`(internal quotation marks omitted). Hence, the Court was assured that class certification
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`would “avoid the individualized issues that would have otherwise arisen from the
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`variations in packaging” of the relevant products. Id. at 14. Even on the foregoing narrow
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`definition, however, the Court declined to certify the Nutri-Grain subclass because the
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`challenged statement on the product’s packaging “was not sufficiently ‘prominently
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`displayed’ to warrant an inference of class-wide exposure.” Id. at 17 (quoting Zakaria v.
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`Gerber Prods. Co., No. LA CV15-00200 JAK (Ex), 2016 WL 6662723, at *8 (C.D. Cal.
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`Mar. 23, 2016)). Therefore, the Court granted in part and denied in part the motion to
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`certify.
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`The settlement class is significantly broader than the classes the Court previously
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`certified. The class definition in the settlement agreement consists of “all persons in the
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`United States who, between August 29, 2012 and the date a motion for preliminary
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`approval is filed [i.e., October 21, 2019], purchased in the United States, for household use
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`and not for resale or distribution, one of the Class Products.” ECF No. 325-1 Ex. A
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`(“Settlement Agmt.”) ¶ 4. Plaintiffs define the “Class Products,” in turn, as various sizes
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`and varieties of six different Kellogg products: Raisin Bran, Krave, Frosted Mini-Wheats,
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`Smart Start, Crunchy Nut, and Nutri-Grain Bars. Id. at Appx. 1.
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`The settlement class is thus no longer limited to individuals who purchased
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`products that contain the challenged statements. On the contrary, the Class Products are
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`defined more broadly to include even more packaging sizes that were not included in the
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`previous motion to certify. ECF No. 325-1 (“Fitzgerald Decl.”) ¶ 80. At the hearing, the
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`parties represented to the Court that the statements on these additional packaging sizes
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`varied across the more than seven year class period, like the statements on the packaging of
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`the products included in Plaintiff Stephen Hadley’s motion to certify.
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`Accordingly, the Court cannot conclude that the settlement class satisfies the
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`predominance requirement of Federal Rule of Civil Procedure 23(b)(3). Plaintiffs cite the
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`Ninth Circuit’s recent decision in In re Hyundai and Kia Fuel Economy Litig., 926 F.3d
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`539 (9th Cir. 2019), for the proposition that issues associated with consumer fraud claims,
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`“which turn on a common course of conduct by the defendant, can establish predominance
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`in nationwide class actions.” 926 F.3d at 559. However, in In re Hyundai, the Ninth
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`Circuit explained that “class members were exposed to uniform fuel-economy
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`misrepresentations and suffered identical injuries.” Id. Indeed, the Ninth Circuit
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`emphasized the district court’s finding “that the alleged misrepresentations were
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`‘uniformly’ made via ‘Monroney stickers and nationwide advertising.’” Id.
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`In the instant case, by contrast, the Court did not find that the alleged
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`misrepresentations were “uniformly” made to settlement class members. On the contrary,
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`the Court found that Plaintiff Stephen Hadley’s earlier subclass definitions had been
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`defined “narrowly in order to avoid the individualized issue that would have otherwise
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`arisen from the packaging” of the relevant products. ECF No. 208 at 14 (emphasis added).
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`Further, even with the narrower subclass definitions, the Court had previously
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`denied the motion to certify the Nutri-Grain Bars subclass because the Court concluded
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`that “class-wide exposure to the ‘wholesome goodness’ phrase on Nutri-Grain packaging
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`cannot be inferred.” Id. at 17. Plaintiffs do nothing to reconcile the settlement class
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`definition with the Court’s previous decision. Yet the purported value of the injunctive
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`relief that corresponds to the use of the word “wholesome” on Nutri-Grain Bars comprises
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`nearly half of the total value of injunctive relief that Plaintiffs purport to have secured for
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`the class. Mot. at 6.
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`In light of Plaintiffs’ and Kellogg’s representations about variations of the
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`packaging of the Class Products over the course of the more than seven year class period,
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`the Court’s previous decisions on predominance, and the increased breadth of the
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`settlement class, the Court cannot conclude that the settlement class satisfies the
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`predominance requirement of Federal Rule of Civil Procedure 23(b)(3). In any subsequent
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`motion for preliminary approval, the parties must more clearly explain how the settlement
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`class satisfies the predominance requirement of Federal Rule of Civil Procedure 23(b)(3),
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`or define the settlement class more narrowly.
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`C. The Settlement Fails to Comply with Northern District Procedural Guidance on
`Reversions.
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`Ninth Circuit case law demands heightened scrutiny of reversionary clauses in settlements
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`“because they create perverse incentives” for the parties. SFBSC Mgmt., LLC, 944 F.3d at 1058.
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`Accordingly, the Northern District of California’s guidance for class action settlements requires
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`parties to provide courts with sufficient information to assess whether a reversionary clause is
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`justified. Procedural Guidance for Class Action Settlements, N.D. Cal.,
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`https://cand.uscourts.gov/ClassActionSettlementGuidance (last updated Dec. 5, 2018) (hereinafter
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`“N.D. Cal. Proc. Guidance for Class Action Settlements”). The parties fail to do so here.
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`The settlement in the instant case contains reversionary aspects. Specifically, the
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`settlement secures an $8,250,000 “voucher component” for the class. Mot. at 3. Each voucher
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`that makes up this component of the settlement expires after four months. Settlement Agmt. ¶
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`30.2. When a voucher expires, the value of the voucher effectively “reverts” to Kellogg, as
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`Kellogg is then under no obligation to make any payment. Indeed, the Ninth Circuit has held that
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`arrangements of this kind, in a case that involved vouchers that expired after two years, and not
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`just four months, are reversionary in nature. See SFBSC Mgmt., 944 F.3d at 1041 (“The dance fee
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`payment vouchers were set to expire in two years, at which time the ‘value’ of any unredeemed
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`claims . . . would revert to the defendant nightclubs.”).
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`Although the Ninth Circuit does not disallow reversionary settlements outright, the Ninth
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`Circuit does “generally disfavor them because they create perverse incentives.” Id. at 1058. “This
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`cautionary approach to reversionary clauses is also reflected in the Northern District of
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`California’s own guidance for class action settlements.” Id. at 1059 n.22. In particular, and “[i]n
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`light of Ninth Circuit case law disfavoring reversions,” the Northern District of California’s
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`procedural guidance dictates that parties should state in their motion for preliminary approval
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`“whether and under what circumstances money originally designated for class recovery will revert
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`to any defendant, the potential amount or range of amounts of any such reversion, and an
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`explanation as to why a reversion is appropriate in the instant case.” Id. (emphasis added and
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`internal quotation marks omitted) (quoting N.D. Cal. Proc. Guidance for Class Action
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`Settlements).
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`In the instant motion for preliminary approval, Plaintiffs do not include any estimate of the
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`amount of unclaimed vouchers that will expire after four months and thereby revert to Kellogg,
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`nor do Plaintiffs provide any explanation as to why a reversion is appropriate in the instant case.
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`Accordingly, the Court is unable to “satisfy its procedural obligation to probe more closely the
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`reversionary clauses, by investigating whether those clauses are justified by unique benefits to the
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`class and supported by provisions that ameliorate concerns about perverse incentives.” SFBSC
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`Mgmt., 944 F.3d at 1060. In any subsequent motion for preliminary approval, in order to allow
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`the Court to determine whether the instant settlement is “fundamentally fair, adequate, and
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`reasonable,” Hanlon, 150 F.3d at 1026, the parties must provide the reversion information outlined
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`in the Northern District of California’s procedural guidance.
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`D. The Claim Form, Opt-Out Form, and Notice Forms Provide Inadequate Notice to
`Class Members.
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`The Court also concludes that the proposed claim form, opt-out form, and notice forms
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`provide inadequate notice to class members. Federal Rule of Civil Procedure 23(e)(1) requires a
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`court to “direct notice [of a proposed settlement] in a reasonable manner to all class members who
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`would be bound by the proposal.” Fed. R. Civ. P. 23(e)(1). Rule 23(e) requires notice that
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`describes “the terms of the settlement in sufficient detail to alert those with adverse viewpoints to
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`investigate and to come forward and be heard.” Lane v. Facebook, Inc., 696 F.3d 811, 826 (9th
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`Cir. 2012) (internal quotation marks omitted). Notice is inadequate if it misleads potential class
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`members. Molski v. Gleich, 318 F.3d 937, 952 (9th Cir. 2003), overruled on other grounds by
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`Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010). The Court appreciates the parties’
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`efforts to secure relief for the class members in the instant case. However, here, numerous errors
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`in the proposed claim form, opt-out form, and notice forms render the proposed notice to class
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`members misleading.
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`First, the Court discusses numerous inconsistencies across the various forms. The Court
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`then turns to certain issues with the proposed claim form. Finally, for the sake of completeness,
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 10 of 17
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`the Court discusses various remaining notice-related issues.
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`First, there are numerous inconsistencies between the various forms that render the notice
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`to class members inadequate. Specifically, the opt-out form notifies class members that those who
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`submit the opt-out form “will not be eligible to receive any money that may result from any trial
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`or settlement of this lawsuit, if there is one.” Settlement Agmt. Ex. 3 (“Opt-Out Form”) (emphasis
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`added). The opt-out form further indicates that class members who submit the opt-out form “do
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`not wish to receive compensation under the terms of any judgment or settlement or to otherwise
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`participate in this Class Action.” Id. (emphasis added). By contrast, the settlement agreement
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`indicates that class members who submit an opt-out form only “opt out of and [are] excluded from
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`the Settlement.” Settlement Agmt. ¶ 46 (emphasis added). Thus, the settlement agreement states
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`that submission of the opt-out form results in exclusion from the settlement only, but the opt-out
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`form states that submission results in exclusion from “participat[ion] in this Class Action” more
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`broadly. Opt-Out Form. In light of these conflicting statements, the impact of the opt-out form is
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`unclear to class members.
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`Similarly, the requirements for objecting to the settlement are inconsistent across forms.
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`The settlement agreement contemplates that “[a]ny objection to the Settlement must be in writing,
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`filed with the Court, with a copy served on Class Counsel and counsel for Kellogg.” Settlement
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`Agmt. ¶ 47.1 (emphasis added). Yet neither the long-form nor short-form notice contains any
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`mention of the requirement that class members who wish to object must serve a copy of the
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`objection on all counsel. See Settlement Agmt. Ex. 2 (“Long-Form Notice”) at 1; Short-Form
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`Notice. Instead, the short-form notice form simply directs class members to the long-form notice.
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`Id. (“You may also object to any part of this Settlement. Details about how to object are available
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`at www.CerealClaims.com.”). The long-form notice, meanwhile, suggests to class members that
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`no such service is necessary: “If you wish to object, you must, no later than [Objection Deadline],
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`electronically file via the Court’s ECF system, or deliver to the Clerk of the Court by mail, express
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`mail, or personal delivery, a written objection.” Long-Form Notice ¶ 20. Thus, the notice forms
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`mislead class members about how objections may be made. More generally, the Court notes that
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 11 of 17
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`requiring objectors to file their objections and to serve their objections on all counsel imposes an
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`unnecessary burden on class members who wish to object.1
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`Further, the settlement agreement contemplates that “[o]bjecting Class Members may
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`appear at the Final Approval Hearing and be heard. Such Class Members are requested, but not
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`required to file a Notice of Intent to Appear.” Settlement Agmt. ¶ 47.6. By contrast, the long-
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`form notice suggests that class members should also serve a Notice of Intent to Appear “on Class
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`Counsel and Defense Counsel” if the class members wish to appear at the final approval hearing.
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`Long-Form Notice ¶ 20. Thus, the long-form notice does not provide adequate notice to class
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`members about the procedure to appear at the final approval hearing . Further, as with objections,
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`requiring filing and service on all counsel imposes an unnecessary burden on class members who
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`wish to appear at the final approval hearing.
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`Second, the claim form presents a misleading choice between vouchers and cash to class
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`members. As an initial matter, Plaintiffs propose that class members submit a claim form online.
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`Mot. at 3. The proposed online claim form asks each class member to select which of the Class
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`Products the class member purchased since August 2012, and estimate how many of the Class
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`Products the class member purchased within the preceding three months. Id. An equation then
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`places the class member into one of four “buckets,” which depends on the extrapolated frequency
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`of the class member’s Class Product purchases:
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`Base Refund
`Range
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`$0 - $10.00
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`$10.01 - $32.50
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`$32.51 - $55.00
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`$55.01+
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`Voucher Offer
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`$5
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`Cash Refund
`Offer
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`$2.50
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`$10
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`$5
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`$15
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`$7.50
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`$20
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`$10
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`The voucher offer thus suggests that class members that select vouchers will receive a
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`1 Further, it is not clear that a lay person would understand how to file and serve his or her
`objection.
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`voucher with twice the value of cash. Plaintiffs assume, based on their expert’s calculations, that
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`roughly 78% or 79% of class members will select the voucher offer when presented with the
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`preceding options. Mot. at 7; Fitzgerald Decl. ¶ 57.
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`Plaintiffs further assume a 10% claims rate, which Plaintiffs describe as “an unusually
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`robust, but not unheard-of claims rate in such a case.” Id. ¶ 61. Plaintiffs’ assumption about the
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`10% claims rate derives from an unknown source. Plaintiffs merely state that “a 10% claims rate
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`is an unusually robust, but not unheard-of claims rate in such a case.” Fitzgerald Decl. ¶ 61. The
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`Northern District of California’s procedural guidance dictates that the estimate of the claims rate
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`should derive “from other recent settlements of similar cases,” and the parties should supply “the
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`identity of the examples used for the estimate, and the reason for the selection of those examples.”
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`N.D. Cal. Proc. Guidance for Class Action Settlements ¶ 1(g). The sole example of a claims rate
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`in a similar case that Plaintiffs provide is for Boswell v. Costco Wholesale Corp., 16-CV-278-
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`DOC (C.D. Cal.), in which the claims rate was only 2.9 %. Fitzgerald Decl. ¶ 79. Thus, Plaintiffs
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`have failed to provide the claims rate information required by the Northern District of California’s
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`procedural guidance.
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`Moreover, the parties’ own documents show that if Plaintiffs’ assumptions are correct,
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`then based on the availability of funds, the class members that select the cash refund will in fact
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`receive a cash sum that is higher than the value of the corresponding voucher. See id. ¶ 63.
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`Specifically, Plaintiffs’ assumptions result in the following distribution:
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`Bucket
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`Initial Cash
`Offer
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`Actual Cash
`Received
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`Initial Voucher
`Offer
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`Actual Voucher
`Received
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`$2.50
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`$5.00
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`$7.50
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`$10.00
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`$6.68
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`$13.36
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`$20.03
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`$26.71
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`12
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`$5.00
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`$10.00
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`$15.00
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`$20.00
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`$5.29
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`$10.58
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`$15.87
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`$21.15
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`Case No. 16-CV-04955-LHK
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`Case 5:16-cv-04955-LHK Document 339 Filed 02/20/20 Page 13 of 17
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`Id. Plaintiffs attempt to remedy this issue by proposing that the short-form notice and the claim
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`form explain that “[t]he actual value of the Voucher or Cash Refund may be more or less than the
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`initial offer amount depending on the final number of claims approved.” Settlement Agmt. Ex. 2
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`(“Short-Form Notice”); Fitzgerald Decl. Ex. C (“Claim Form”). However, the clear implication of
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`the proposed claim form, which requires class members to repeatedly choose between cash and a
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`voucher that is twice the value of the cash, is that the choice of cash will result in receipt of a 50%
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`lower amount than the choice of a voucher. To the extent that the opposite is in fact true, the
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`claim form is misleading to class members.
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`Third, the Court notes several other flaws in the proposed claim form, opt-out form, and
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`notice forms render notice to class members inadequate. Specifically, the short-form notice fails
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`to inform class members of the $12,000,000 “cash component” of the settlement, and the short-
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`form notice also fails to disclose the amount of attorney’s fees, expenses, and administrative and
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`notice costs that counsel will seek from the cash component of the settlement. The long-form
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`notice discloses the amount of attorney’s fees and expenses, but fails to disclose administrative
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`and notice costs. Additionally, the long-form notice fails to clearly disclose the identity of the
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`individual Plaintiffs.
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`The procedure for submission of the opt-out form is also needlessly burdensome for class
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`members. Specifically, the long-form notice provides that class members who wish to submit an
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`opt-out