Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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District Court Judge Gonzalo Curiel recently considered and rejected—for the second time—a proposed class action settlement involving false advertising claims a

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Third Time’s the Charm?  Court Rejects Parties’ Second Settlement Agreement for Failure to Provide Sufficient Value to Class Members

Third Time’s the Charm?  Court Rejects Parties’ Second Settlement Agreement for Failure to Provide Sufficient Value to Class Members | Class Dismissed

District Court Judge Gonzalo Curiel recently considered and rejected—for the second time—a proposed class action settlement involving false advertising claims against a defendant jeans manufacturer.  Hofmann v. Dutch, LLC, No. 3:14-cv-02418-GPC-JLB (S.D. Cal. Aug. 16, 2016).  The court initially rejected the proposed settlement because of its coupon offer, charitable award unrelated to the issues of the case, and attorneys’ fee provision, which the Court found excessive.  The court rejected the parties’ renewed attempt to secure settlement approval because the problematic provisions remained unchanged and the sole addition – a free denim tote bag – did not adequately address the Court’s concerns.On September 5, 2014, plaintiff Sonia Hofmann sued defendant Dutch, LLC, alleging the denim company manufactured and sold jeans labeled “Made in the USA” that contained foreign-made components (buttons, rivets, zipper assembly, thread, and fabric).  Plaintiff alleged four causes of action under California law:  violations of the Unfair Competition Law (UCL); violations of the Business and Professions Code § 17533.7 (relating to manufacturers’ and retailers’ use of the label “Made in the USA”); violations of the Consumer Legal Remedies Act (CLRA); and negligent representation.Settlement Reached.  After litigating the case for just over a year, the parties agreed to a settlement.  On October 26, 2015, Plaintiff filed an unopposed motion requesting the court’s approval of a settlement agreement including the following terms:<ul><li>an injunction requiring Dutch to change its labels to reflect the country-of-origin of its jeans’ component parts;</li><li>$20 e-gift certificates for participating class members;</li><li>an award of $250,000 over five years to charities that benefit women; and</li><li>attorneys’ fees and costs not to exceed $175,000.</li></ul>Initial Settlement Rejected.  On April 26, 2016, Judge Curiel rejected the proposed settlement.  While the Court had no issue with the injunction, it rejected the $20 gift card offer, charitable award, and attorneys’ fees provisions, finding that the first two provisions did not provide sufficient value to potential class members, and the third suggested collusion between the parties.$20 Gift Card.  The parties argued that a $20 gift card was appropriate restitution for class members in light of the risk that they would receive nothing if the case went to trial.  The Court disagreed, noting that the average price of a pair of Dutch jeans is $205.  Therefore, the $20 offer was merely a coupon or discount requiring class members to spend more money to buy a Dutch product.  The Court reasoned that this was an inadequate offer to class members because it would require them to spend additional money on Dutch products, which would result in a net benefit to Dutch.Charitable Award.  The Court also rejected the cy pres provision whereby Dutch would pay $250,000 to various charities that purportedly benefit women, including breast cancer research and juvenile diabetes charities.  The Court noted that charitable awards may be acceptable when they benefit a cause related to the litigation and therefore provide an indirect benefit to class members.  The parties argued that there was a link between class members, who tended to be women, and charities that benefit women.  The Court rejected this argument as too tenuous, finding no link between women-focused charities and a “Made in the USA” class action.Attorneys’ Fees and Costs.  The settlement included a “clear sailing” term, whereby Dutch agreed not to contest any attorneys’ fees or cost awards that did not exceed $175,000.  The Court noted that such provisions create a danger of collusion, because they may encourage plaintiff’s counsel to accept an inadequate settlement on behalf of class members in exchange for an excessive fee award, and therefore require close scrutiny.  The Court rejected the fee award, reasoning that it was too high in light of the fact that class members received no value from the settlement apart from the $20 discount.Second Settlement Fails.  On June 23, 2016, the parties submitted a second settlement agreement to Judge Curiel.  The terms of the agreement remained the same, with one addition: class members were entitled to a denim tote bag valued at $128.  Judge Curiel rejected this settlement in short order, sharply noting that none of the problematic terms in the initial agreement had been remedied.  The Court reiterated its concerns regarding the coupon provision, charitable award, and fee provision, and was unpersuaded by Dutch’s tote bag offer.  As before, the Court denied approval, but permitted an additional 60 days for the parties to submit an improved settlement.Takeaway.  Hofmann offers yet another reminder that courts today strictly scrutinize class action settlements to ensure that they provide real value to settlement class members, do not appear collusive, provide sufficient notice, and treat all members of the class fairly.  See, e.g., Cotter v. Lyft, No. 13-cv-04065-VC, 2016 U.S. Dist. LEXIS 50579 (N.D. Cal. Apr. 7, 2016) (denying settlement agreement that short-changed members of the class by offering less than half the reimbursement to which they were entitled); Deatrick v. Securitas Sec. Servs., No. 13-cv-050160-JST U.S. Dist. LEXIS 22597 (N.D. Cal. Feb. 24, 2016) (settlement failed to provide clear notice procedures to class members); Thomas v. MagnaChip Semiconductor, Inc., No. 14-cv-01160-JST (N.D. Cal. Apr. 7, 2016) (settlement denied in part for distributing class funds to a charitable recipient without a sufficient nexus to the interests of the class members).  Parties submitting a settlement agreement for court approval need to carefully evaluate whether the proposed terms are consistent with current case law in their jurisdiction.