Case 3:18-cv-00395-L-BLM Document 61 Filed 06/04/21 PageID.1356 Page 1 of 14
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`CRYSTAL HILSLEY, et al.,
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`Plaintiffs,
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`v.
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`GENERAL MILLS, INC. et al.,
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`Defendants.
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` Case No.: 3:18-cv-00395-L-BLM
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`CLASS ACTION
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`ORDER DENYING PLAINTIFFS’
`MOTION FOR PRELIMINARY
`APPROVAL OF CLASS ACTION
`SETTLEMENT AND GRANTING
`MOTION TO INTERVENE
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`[ECF Nos. 45, 52]
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`In this putative class action alleging deceptive food labeling, Plaintiffs filed an
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`unopposed motion for preliminary settlement approval. (ECF No. 45, “Prelim. Approval
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`Mot.”). David Hayes, a named plaintiff in a related putative class action pending in the
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`Northern District of Illinois, filed a motion to intervene, which Plaintiffs opposed. (ECF
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`No. 52.) The Court decides these matters on the briefs without oral argument. See Civ.
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`L. R. 7.1(d)(1). For the reasons stated below, the Preliminary Approval Motion is denied
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`and the motion to intervene is granted.
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`I.
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`BACKGROUND
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`Plaintiffs, consumers who purchased fruit flavored snacks manufactured by
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`Defendant General Mills, Inc. (“General Mills”), brought this putative class action
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`Case 3:18-cv-00395-L-BLM Document 61 Filed 06/04/21 PageID.1357 Page 2 of 14
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`alleging that the product label was misleading because it falsely claimed that the snacks
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`had "no artificial flavors" and were "naturally flavored," although they contained d-l
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`malic acid as an artificial flavoring. (ECF no. 1-2, Class Action Compl. (“Compl.”) ¶¶
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`46, 47, 53.) According to the complaint, d-l malic acid is a "synthetic petrochemical.”
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`(Id. ¶ 50.) Plaintiff claimed that it "simulates, resembles, and reinforces the
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`characterizing fruit flavor of the Products.” (Id. ¶ 72; see also id. ¶52.) Specifically, d-l
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`malic acid “confers a tart, fruit-like flavor" to "help[] make the Products – which are over
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`50% corn syrup and sugar – taste more like fruit." (Id. ¶¶ 50 (internal quotation marks
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`omitted), 59.)
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`The initial complaint alleged violations of California Unfair Competition Law,
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`California False Advertising Law, and California Consumer Legal Remedies Act, as well
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`as breach of express and implied warranties. Plaintiff filed the complaint in State court.
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`Defendants removed the action to federal court. The court has subject matter jurisdiction
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`pursuant to 28 U.S.C. §1332.
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`Defendants filed a motion to dismiss for failure to state a claim under Federal Rule
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`of Civil Procedure 12(b)(6). They argued that General Mills used d-l malic acid as a pH
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`control agent and not as an artificial flavor. (See generally ECF no. 13-1 (Defs’ mot. to
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`dismiss).) At the pleading stage, the court did not resolve the factual dispute whether
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`malic acid in the fruit snacks was used as a flavoring ingredient or a pH balancing agent.
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`(ECF no. 17 (order) at 4.) See Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997, 999
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`n.3 (9th Cir. 2006) (the court must assume the truth of the factual allegations in the
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`complaint and construe them most favorably to the moving party). Defendants’ motion
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`was denied insofar as Plaintiff’s theory of liability was based on the contention that the
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`products were mislabeled because the packaging falsely stated they were “naturally
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`flavored” and had “no artificial flavors.”
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`Defendants answered the complaint, the parties participated in an early neutral
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`evaluation conference, and commenced discovery. (ECF no. 45-2, Decl. of Ronald A.
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`Marron (“Marron Dec.”) at 2.) During discovery, the parties entered settlement
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`Case 3:18-cv-00395-L-BLM Document 61 Filed 06/04/21 PageID.1358 Page 3 of 14
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`negotiations and mediation. (Id. at 3.) The negotiations included a related action,
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`prosecuted by the same counsel who represent Plaintiffs herein, pending in the Central
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`District of California, Morris et al. v. Motts LLP at al., case no. 18cv1799 (the “Morris
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`Action”). (Id.) The Morris Action alleged essentially the same claims about fruit
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`flavored snacks manufactured by General Mills which were sold under the Motts brand.
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`(Id. at 2.) General Mills was one of the named defendants. (Id at 3.) On March 9, 2020,
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`the parties “finalized the terms of the settlement.” (Id. at 4.)
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`As a part of the settlement, the Morris Action was dismissed and incorporated into
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`the amended complaint filed in this action. (See ECF no. 45-3, Marron Dec. Ex. 1
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`(“Settlement Agreement”) ¶¶ 1.6, 1.7.) Consistent with the Settlement Agreement, the
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`amended complaint expanded what was previously a class of California consumers to a
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`nationwide class action.1 (Cf. Compl. ¶ 116 with ECF no. 41, First Am. Compl. (“FAC”
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`or “amended complaint”)2 ¶ 88; see also Settlement Agreement ¶ 2.3.)
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`Under the proposed settlement, Defendants promised to change the product
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`packaging to “display an asterisk or a similar reference immediately following or
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`adjacent to the ‘No Artificial Flavors’ claim that directs the consumer to the statement
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`‘*Learn More at [the General Mills website].’” (Settlement Agreement ¶ 5.2.b.) In this
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`regard, the General Mills website would
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`disclose[] in substance the following points: (1) that . . . the flavors in the
`Products bearing the Challenged Claims come from all natural sources; (2)
`that General Mills identifies “natural flavors” in the ingredient list in
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`The amended complaint also added David Cook as a plaintiff residing in
`Minnesota, omitted the breach of warranty claims, added certain fraud and unjust
`enrichment claims, added a claim under a Minnesota consumer fraud statute, and
`included additional products. (Cf. Compl. at 5, 11, 17-24 with FAC at 3-4, 19-27 and Ex.
`1.)
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`Plaintiffs neglected to accompany the amended complaint with a redlined version
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`showing the variances between the initial and first amended complaints. See Civ. L. R.
`15.1(c).
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`Case 3:18-cv-00395-L-BLM Document 61 Filed 06/04/21 PageID.1359 Page 4 of 14
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`accordance with FDA regulations; and (3) that . . . the Products may also
`contain synthetic malic acid or other acidulants. Malic acid is intended for
`use not as a flavor or to impart the characterizing flavor of these Products,
`but is a substance the FDA approves for multiple uses including a flavor
`enhancer, a flavoring agent or adjuvant, or as a pH control agent. 21 C.F.R.
`§ 184.1069.
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`(Settlement Agreement ¶ 5.2.a.) These statements would be provided on General Mills
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`website for four years. (Id. ¶ 5.2.b.) In addition, General Mills promised not to object to
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`Plaintiffs’ application for $725,000 in attorneys’ fees, costs and expenses, and a $5,000
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`incentive award to each of the four named Plaintiffs. (Id. ¶ 10.1.) Finally, Defendants
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`agreed to pay the costs of notice and settlement administration. (Id. ¶ 6.1.) In exchange,
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`the nationwide class would broadly release all of its claims against Defendants, including
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`the claims for monetary relief pled in the amended complaint.3 (Cf. id. ¶ 7.1 with FAC at
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`29.)
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`II. DISCUSSION
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`A. Motion for Preliminary Approval
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`According to the terms of the settlement, Plaintiffs filed the pending Settlement
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`Approval Motion. (See Settlement Agreement ¶ 9.1.) Defendants filed a non-opposition,
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`together with three expert reports. (ECF no. 46 (“Non-Opp’n”).) For the reasons stated
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`below, the motion is denied.
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`To order notice to the putative class of the proposed settlement, the court must find
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`that it
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`will likely be able to
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`approve the proposal under Rule 23(e)(2); and
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`certify the class for purposes of judgment on the proposal.
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`Fed. R. Civ. Proc. 23(e)(1)(B).
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`The release also appears to exceed the permissible scope. See Hesse v. Sprint
`Corp.598 F.3d 581, 590 (9th Cir. 2010).
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`If, as here, the proposed settlement “would bind the class members, the court may
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`approve it . . . only on finding that it is fair, reasonable, and adequate.” Fed. R. Civ. Proc.
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`23(e)(2). “[S]ettlement of class actions present[s] unique due process concerns for absent
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`class members [in part because] class counsel may collude with the defendants, tacitly
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`reducing the overall settlement in return for a higher attorney's fee." In re Bluetooth
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`Headset Prod. Liability Litig., 654 F.3d 935, 946 (9th Cir. 2011);4 see also Evans v. Jeff
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`D., 475 U.S. 717, 733 (1986) (noting the possibility of tradeoff between merits relief and
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`attorneys' fees often implicit in class action settlement negotiations.) The court's role in
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`reviewing class action settlements "is to police the inherent tensions among class
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`representation, defendant's interests in minimizing the cost of the total settlement
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`package, and class counsel's interest in fees." Staton v. Boeing Co., 327 F.3d 938, 972
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`n.22 (9th Cir. 2003); see also Bluetooth, 654 F.3d at 946.
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`In this regard, the court considers whether:
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`the class representatives and class counsel have adequately
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`represented the class;
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`the proposal was negotiated at arm's length;
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`the relief provided for the class is adequate, taking into account:
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`the costs, risks, and delay of trial and appeal;
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`the effectiveness of any proposed method of distributing relief
`to the class, including the method of processing class-member
`claims;
`the terms of any proposed award of attorney's fees, including
`timing of payment; and
`(iv) any agreement required to be identified under Rule 23(e)(3);
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`the proposal treats class members equitably relative to each other.
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`(iii)
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`(D)
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`Fed. R. Civ. Proc. 23(e)(2).
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`Unless otherwise noted, internal quotation marks, citations, brackets, and footnotes
`are omitted from citations.
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`Where, as here,
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`a settlement agreement is negotiated prior to formal class certification,
`. . . [¶] . . . such agreements must withstand an even higher level of scrutiny
`for evidence of collusion or other conflicts of interest than is ordinarily
`required under Rule 23(e) before securing the court's approval as fair.
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`Bluetooth, 654 F.3d at 946. The court has a duty to look for any "subtle signs that class
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`counsel have allowed pursuit of their own self-interests and that of certain class members
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`to infect the negotiations." Id. at 947. Examples of such subtle signs are
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`(1) when counsel receive a disproportionate distribution of the settlement ...;
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`(2) when the parties negotiate a “clear sailing” arrangement providing for the
`payment of attorneys' fees separate and apart from class funds ...; and
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`(3) when the parties arrange for fees not awarded to revert to defendants
`rather than be added to the class fund.
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`The Settlement Agreement here includes all three features. First, the class receives
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`no monetary award while the counsel receives $725,000 for fees and costs, and each
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`named Plaintiff receives $5,000.
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`Second, the settlement includes a “clear sailing” arrangement (see Settlement
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`Agreement ¶ 10.1) whereby "the defendant agrees not to oppose a petition for a fee award
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`up to a specified maximum value." Bluetooth, 654 F.3d at 940 n.6. This "carries the
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`potential of enabling a defendant to pay class counsel excessive fees and costs in
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`exchange for counsel accepting an unfair settlement on behalf of the class." Id. at 947.
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`Finally, the settlement includes an implied "kicker," whereby "all fees not awarded
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`would revert to defendants rather than be added to the cy pres fund or otherwise benefit
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`the class." Bluetooth, 654 F.3d at 947. The kicker is implicit in that Defendants agreed
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`to pay without objection up to $725,000 for attorneys' fees, costs, and litigation expenses
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`but the Settlement Agreement does not provide for any funds to be applied for the benefit
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`of the class should the court award less.
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`Although the $725,000 sum was negotiated with a mediator's assistance (Marron
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`Dec. at 3-4), this, by itself, is not sufficient to assure that the attorneys' fee amount was
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`the product of collusion-free negotiations in light of the clear sailing and kicker
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`provisions. Bluetooth, 654 F.3d at 948.
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`[W]hen confronted with a clear sailing provision, the district court has a
`heightened duty to peer into the provision and scrutinize closely the
`relationship between attorneys' fees and benefit to the class, being careful to
`avoid awarding “unreasonably high” fees simply because they are
`uncontested.
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`Id. at 948.
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`For this same reason, a kicker arrangement reverting unpaid attorneys' fees
`to the defendant rather than to the class amplifies the danger of collusion
`already suggested by a clear sailing provision. If the defendant is willing to
`pay a certain sum in attorneys' fees as part of the settlement package, but the
`full fee award would be unreasonable, there is no apparent reason the class
`should not benefit from the excess allotted for fees. The clear sailing
`provision reveals the defendant's willingness to pay, but the kicker deprives
`the class of that full potential benefit if class counsel negotiates too much for
`its fees.
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`Id. at 949.
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`The request for $725,000 in fees and expenses appears excessive on its face. The
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`legal work in this action consisted of investigating and drafting an initial complaint,
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`defending a motion to dismiss, written discovery without depositions, and settlement
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`negotiations.
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`On the other hand, the Settlement Agreement provides no meaningful benefit to the
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`class. On behalf of a nationwide class, the Settlement Agreement abandons the monetary
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`relief requested in the amended complaint. Plaintiffs do not address the aggregate
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`amount of monetary relief they would recover had they prevailed on the merits, raising
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`the question whether the settlement is based on a substantive analysis of Plaintiffs’ case.
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`Plaintiffs cite Littlejohn v. Copland, 819 Fed. App’x. 491 (9th Cir. 2020), for the
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`proposition that the Settlement Agreement should be approved notwithstanding lack of
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`monetary relief. In addition, Defendants filed a declaration of Ran Keivetz, Ph.D., a
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`marketing professor at Columbia University Business School. (Non-Opp’n at 10-11 &
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`Ex. A.) He opined that the proposed asterisk on the product packaging is likely to benefit
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`the consumers because, in his opinion, consumers do not assign any value to a claim of
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`no artificial flavors, and the few who do would be willing to visit a website for more
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`information. Neither Littlejohn nor the Keivetz opinion assist Plaintiffs.
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`In Littlejohn, the Court of Appeals affirmed a consumer class action settlement
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`where the class members received only injunctive relief. The case involved a similar
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`claim as this action. The plaintiff alleged a representation that SweetTARTS candy
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`contained “no artificial flavors” was false and misleading because the candy contained dl
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`malic acid. Id. at 492. The same counsel who represents Plaintiffs here settled Littlejohn
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`for $272,000 in attorneys’ fees and injunctive relief requiring the defendant “to remove
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`the phrase ‘no artificial flavors’ from SweetTARTS packages and to identify dl malic
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`acid as an ingredient.” Id. (emphasis added). The court found the settlement adequate
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`because “modification of SweetTARTS packaging and advertising adequately addresses
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`the very claims raised in Plaintiff’s Complaint, providing value to the Class.” Id. at 493.
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`By contrast, Defendants here have not agreed to remove the allegedly misleading
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`statements but propose only to embellish them with an asterisk.
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`Littlejohn is consistent with relevant California law. Under California consumer
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`protection statutes alleged in the amended complaint, an asterisk would not alleviate the
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`misleading nature of false representations. See Williams v. Gerber Prods. Co., 552 F.3d
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`934, 939 (9th Cir. 2008) (“We disagree with the district court that reasonable consumers
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`should be expected to look beyond misleading representations on the front of the box to
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`discover the truth from the ingredient list in small print on the side of the box,” even
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`when the ingredient list complies with FDA regulations.) Accordingly, Keivetz’
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`declaration notwithstanding, the proposed injunctive relief provides very little value to
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`the class, if any.
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`Although Plaintiffs’ counsel asserts that the settlement provides “exceptional
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`results” (Marron Dec. at 4), Plaintiffs provide no discussion of the weaknesses in their
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`case to justify the extent of compromise reflected in the Settlement Agreement. The
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`counsel notes that settlement was reached after discovery and provides a wholly generic
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`explanation -- the uncertainty and delay inherent in litigation. (Marron Dec. at 4 (“I
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`conclude that the Settlement provides exceptional results for the Class while sparing the
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`Class from the uncertainties of continued and protracted litigation.”).)
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`Defendants filed two expert declarations to argue weaknesses in Plaintiffs’ case --
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`reports by Dolf DeRovira, B.S., a highly experienced flavor chemist, and Marianne
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`Gillette, M.S., a food scientist with a high level of expertise in sensory science. (Non-
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`Opp’n at 6-9 & Exs. B (Expert Dec. of Dolf DeRovira (“DeRovira Dec.”)), C (Expert
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`Dec. of Marianne Gillette (“Gillette Dec.”)).)5
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`DeRovira opined that malic acid is not a flavor in part because in 40 years none of
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`his clients has “requested a malic acid flavor.” (DeRovira Dec. at 6.) More specifically,
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`DeRovira relied on the food industry definition of “flavor,” which is distinct from “taste.”
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`(Id. at 6, 9-12.) According to this definition a taste is sensed only on the tongue and is
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`limited to five taste sensations – salty, sweet, bitter, sour, and umami, while flavor
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`includes an aroma which is sensed in the nose. He reasoned that although malic acid has
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`a sour taste, it is not a flavor because it lacks aroma. He conceded that malic acid, due to
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`its sour taste, is sometimes used as a flavor enhancer. (Id. at 2.) DeRovira’s opinion that
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`The expert reports were filed in partially redacted form. Defendants’ motion to
`seal was denied indicating that the unredacted versions of the reports, which had been
`lodged to facilitate the court’s review of the motion to seal, would not be considered on
`the merits of Defendants’ Non-Opposition. (See ECF no. 49.) Although Defendants
`were granted leave to renew their motion to make the showing necessary for sealing (see
`id.), they have not done so.
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`malic acid was not used a flavor in General Mills’ Scooby Doo Snacks is based on the
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`industry definition of “flavor” and Gillette’s report, discussed below. (Id. at 9, 12.)
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`Gillette conducted sensory testing to determine the flavor impact of malic acid as
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`formulated in General Mills fruit flavored snacks. (Gillette Dec. at 2.) After testing she
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`opined that malic acid “does not impart or reinforce a characterizing flavor in the cherry
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`and grape flavored snacks.” (Id. at 16-24) She did not test any other flavors of the
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`relevant products. (See id.) Based on the industry definition of “flavor,” which requires
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`aroma, she opined that malic acid does not function as a flavor in the fruit flavored
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`snacks. (Id. at 2, 24.) Like DeRovira, she allowed that malic acid imparts “a tart
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`sourness,” “a basic taste,” and can be used as a flavor enhancing ingredient. (Id. at 24-
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`25.)
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`Plaintiffs designated Dr. Laszlo Somogyi as an expert who opined that malic acid
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`is used as a flavoring ingredient in the products at issue. (Marron Dec. at 2.) Plaintiffs
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`provided no further information about these opinions or why they would or would not
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`support their’ case.
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`As relevant to California consumer protection claims alleged in the amended
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`complaint, the representations on General Mills’ fruit snacks that they have “no artificial
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`flavors” and are "naturally flavored," are considered misleading if they had the “capacity,
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`likelihood, or tendency to deceive or confuse” the “reasonable consumer.” Williams,
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`552 F.3d at 938. Neither Gillette nor DeRovira opined that a reasonable consumer would
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`interpret “no artificial flavors” using the food industry definition rather than a lay
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`definition of “flavor.” They conceded that malic acid imparts a sour taste and can be
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`used as a flavor enhancer. On this record, the court cannot conclude that Plaintiffs’ case
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`was so weak as to justify accepting the terms of the Settlement Agreement. The court
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`therefore cannot find it is likely ultimately to approve the settlement as fair, reasonable,
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`and adequate.
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`Finally, for the foregoing reasons, the court also cannot conclude that Plaintiffs and
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`their counsel adequately represented the interests of the class either for purposes of
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`settlement or class certification. See Fed. R. Civ. Proc. 23(a)(4), (e)(2)(A). Accordingly,
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`Plaintiffs’ Preliminary Approval Motion is denied.
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`B. Motion to Intervene
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`Approximately a month after Plaintiffs filed their Preliminary Approval Motion,
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`David Hayes filed a motion to intervene. Hayes is a named plaintiff in a related putative
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`class action pending in the Northern District of Illinois, Hayes v. General Mills et al.,
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`case no. 19cv5626 (“Hayes Action”). It is undisputed that his action asserts essentially
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`the same claims as the action pending in this court. He intends to “protect the class
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`members from a facially unfair settlement,” request consolidation of the actions, and
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`move for appointment of interim lead counsel.” (ECF no. 52-1 (“Mot. to Intervene”) at
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`3.) Plaintiffs opposed the motion claiming that Hayes filed a “copy-cat case.” (ECF no.
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`53 (“Opp’n”) at 1.)
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`“On timely motion, the court may permit anyone to intervene who: [¶] has a claim
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`or defense that shares with the main action a common question of law or fact.” Fed. R.
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`Civ. Proc. 24(b)(1). “In exercising its discretion, the court must consider whether the
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`intervention will unduly delay or prejudice the adjudication of the original parties'
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`rights.” Id. 24(b)(3). Accordingly,
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`An applicant who seeks permissive intervention must prove that it meets
`three threshold requirements: (1) it shares a common question of law or fact
`with the main action; (2) its motion is timely; and (3) the court has an
`independent basis for jurisdiction over the applicant's claims. Even if an
`applicant satisfies those threshold requirements, the district court has
`discretion to deny permissive intervention. In exercising its discretion, the
`district court must consider whether intervention will unduly delay the main
`action or will unfairly prejudice the existing parties.
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`Donnelly v. Glickman, 159 F.3d 405, 412 (9th Cir. 1998).6 Although the movant bears
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`the burden of showing that he meets these requirements, they are broadly interpreted in
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`Hayes initially argued for intervention as of right under Rule 24(a). Nevertheless,
`in their opposition Plaintiffs thoroughly briefed permissive intervention under Rule 24(b).
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`favor of intervention. Smith v. Los Angeles Unif. Sch. Dist., 830 F.3d 843, 853 (9th Cir.
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`2016).
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`The Hayes Action widely overlaps with this action. (Cf. ECF no. 20, “Hayes
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`FAC,” filed in Hayes Action 10/8/2019 with FAC filed in this action 8/27/20; see also
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`Opp’n at 1 (“copy-cat case”).) The actions name the same defendants, relate to
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`essentially the same products manufactured by General Mills, are based on the same false
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`advertising contention, seek monetary and injunctive relief, and allege a putative
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`nationwide class. The actions therefore share common questions or law and fact.
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`This court can exercise federal jurisdiction over Hayes’ claims independently of
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`Plaintiffs’ pending action. Hayes is an Illinois citizen. He alleges that Defendants are
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`citizens of Delaware and Minnesota. (Hayes FAC at 2.) He also alleges that the matter in
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`controversy exceeds $ 5 million as required by 28 U.S.C. § 1332(d). (Id.)
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`Plaintiffs claim the motion should be denied as untimely because Hayes knew
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`about this action over a year ago. (Opp’n at 3.)
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`While the length of time that has passed since a suit was filed is not, in and
`of itself, determinative of timeliness, a party seeking to intervene must act as
`soon as he knows or has reason to know that his interests might be adversely
`affected by the outcome of the litigation.
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`Cal. Dept. of Toxic Substances Control v. Comm. Realty Projects, Inc., 309 F.3d 1113,
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`1120 (9th Cir. 2002). Accordingly, Plaintiffs’ argument is not determinative of
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`timeliness.
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`Hayes argues his motion is timely because it was triggered by Plaintiffs’
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`settlement. Plaintiffs do not dispute Hayes’ explanation for the timing of his decision to
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`(Opp’n at 9-10.) In the reply brief, Hayes argued for permissive intervention as an
`alternative to his request for intervention as of right. (ECF no. 55 (“Reply”) at 9-10.)
`Because the motion is granted under Rule 24(b), the court need not consider whether it
`could also be granted under Rule 24(a).
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`intervene. (See Opp’n at 3 (citing Mot. to Intervene at 2 n.1).) Defendants had made
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`multiple attempts to settle with Hayes individually. (Mot. to Intervene at 2.) When he
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`insisted that the settlement include class-wide relief, Defendants redirected their
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`settlement efforts to this action. (Id at 2-3.) Hayes’ counsel Adrian R. Bacon held
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`multiple calls with Ron Marron, Plaintiffs’ counsel in this action. (Id. at 2 n.1.) Marron
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`does not deny he told Bacon that Defendants wanted to settle for injunctive relief only,
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`and “wanted to engage in a reverse auction by pitting both pending lawsuits’ counsel
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`against one another in a race to the bottom.” (Id.) Bacon urged Marron to resist because
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`any such settlement “would be detrimental to class members.” (Id.) “Mr. Marron
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`assured him he would not do so under any circumstances and would not settle without
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`including Hayes’ counsel in the discussion.” (Id.) However, Marron “apparently did not
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`keep his word.” (Id.)
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`As is evident from the pending Preliminary Approval Motion, Marron agreed to a
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`class-wide settlement for injunctive relief only. Hayes contends the proposed settlement
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`“fails to protect the significant interest of the Class in obtaining monetary relief.” (Mot.
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`to Intervene at 3.) Because of the overlap in the claims and class membership there is a
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`significant possibility that the settlement of this action would release the claims asserted
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`in the Hayes Action. Based on Marron’s prior assurances that he would not settle for
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`injunctive relief only, it was reasonable for Hayes to forego intervention until Plaintiffs
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`filed their Preliminary Approval Motion.
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`Plaintiffs’ Preliminary Approval Motion was filed September 4, 2020. Hayes filed
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`his Motion to Intervene on October 16, 2020. Because it was the Preliminary Approval
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`Motion that put Hayes on notice that his interests and the interests of the class might be
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`adversely affected, his Motion to Intervene was timely filed.
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`Plaintiffs’ argument that the settlement would not adversely affect Hayes’ or class
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`members’ interests because they could opt out or object, see Fed. R. Civ. Proc.
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`23(c)(2)(B)(v)-(vi), (e)(5), is rejected. As discussed in the context of the Preliminary
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`Approval Motion, the proposed settlement falls short of the likelihood it could be found
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`fair, reasonable, and adequate, and raises questions of adequacy of representation. (Cf.
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`Opp’n at 8.) Accordingly, the proposed settlement would adversely affect consumer
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`interests implicated both in the Hayes Action as well as in this action.
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`Finally, Plaintiffs maintain that granting the Motion to Intervene after this action
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`had settled would unduly delay and prejudice the adjudication of the parties’ rights in this
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`action. This argument lost its potency with the denial of Plaintiffs’ Preliminary Approval
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`Motion. Furthermore, this action is not significantly more advanced than the Hayes
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`Action. The complaints have survived pleading challenges, no class certification or
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`summary judgment motions have been filed, and neither Plaintiffs nor Hayes have been
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`deposed. To the extent discovery is more advanced in this action, it is equally relevant to
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`the Hayes Action. (See Hayes Action current docket sheet.) Accordingly, Hayes’
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`intervention would not cause undue delay or prejudice to the adjudication of the parties’
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`rights in this action. The Motion to Intervene is granted.
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`III. CONCLUSION
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`For the reasons stated above, it is ordered as follows:
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`1.
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`Plaintiffs’ motion for preliminary approval of class action settlement (ECF
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`no. 45) is denied.
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`2. Motion filed by David Hayes to intervene in this action (ECF no. 52) is
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`granted pursuant to Federal Rule of Civil Procedure 24(b).
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`3.
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`The parties, including Hayes, shall forthwith contact the chambers of
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`Magistrate Judge Barbara L. Major to schedule a case management conference.
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`4.
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`Any further motion for preliminary class action settlement approval shall be
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`filed no later than July 7, 2021.
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`IT IS SO ORDERED.