Bayol v. Health-Ade LLC

Background

Gabriela Bayol and Bruce Verbeck sued Health-Ade LLC and Whole Foods Market California, Inc. on behalf of themselves and a proposed class. The opinion concerns final approval of a settlement in this action and a related action. The court had preliminarily approved the proposed settlement, preliminarily certified a class for settlement purposes, approved notice procedures, and scheduled a fairness hearing.

Class Certification and Notice

The court finally certified the class for settlement purposes only under Federal Rule of Civil Procedure 23. The class includes people in the United States and United States territories who purchased one or more of the specified Health-Ade kombucha products at retail during the class period. The order excludes the defendants and specified related people and entities, judges assigned to the action and their immediate families, people who bought the products for resale, and consumers who timely requested exclusion.

The court found that the notice was the best practicable notice under the circumstances and adequately informed class members about the action, the settlement, their rights, the ability to opt out or object, and the binding effect of the orders and judgment. The court found that no class members submitted timely and valid requests for exclusion and that there were no timely or valid objections.

Settlement Approval

The court approved the settlement agreement and its amendments and exhibits as fair, reasonable, and adequate and in the best interests of the parties and class members. It found, among other things, that the settlement resulted from extensive arm’s-length negotiations without fraud or collusion; that the complexity, expense, and likely duration of the litigation favored settlement; that the parties had enough investigation and discovery to evaluate their positions; and that the settlement provided meaningful relief, including cash and injunctive relief.

Settlement Terms

The defendants’ maximum financial commitment was $3,997,500. That amount includes court-ordered attorneys’ fees and expenses, incentive awards for the representative plaintiffs, settlement-administration expenses, and cash awards to class members. Whole Foods had no obligation to contribute funds to that total commitment.

Health-Ade was required to maintain a specified warning statement on the product labels for 365 days after the agreement was executed, subject to changes reasonably necessary or permitted by law or product changes. Health-Ade also was required to make a formulation change within 120 days after the effective date to control variability in sugar and alcohol content and to test product samples from every subject-product line every 120 days using third-party laboratories. If testing showed excessive variation, Health-Ade was required to repeat testing and, if the variation continued, make formulation or label adjustments.

Release, Injunction, and Dismissal

The order made the settlement binding on the parties and class members and gave it preclusive effect for claims covered by the agreement’s release. The release discharged covered claims, including claims known or unknown, but did not release personal-injury claims. The court permanently barred class members and certain people acting with them from pursuing proceedings covered by the release, while preserving their ability to contact government agencies and receive benefits obtained by those agencies.

The order states that the action, including all individual and class claims presented in it, was dismissed on the merits and with prejudice, without fees or costs except as otherwise provided in the settlement-related orders and agreement. The order also states that the settlement and dismissal were not admissions of liability or wrongdoing by the defendants. A separate order addressed attorneys’ fees, expenses, and incentive awards. The court retained jurisdiction to administer, interpret, and enforce the settlement and related orders. If the settlement’s effective date did not occur, the order provided that the certification, judgment, releases, and related orders would be vacated and become null and void.

Disposition

Judge Maxine M. Chesney approved the class action settlement, finally certified the class for settlement purposes only, directed implementation of the agreement, and dismissed the action on the merits and with prejudice.