United States: Ninth Circuit Affirms Approval Of Settlement In Olive Oil Labeling Suit Where Class Counsel Would Receive 80% Of Monetary Component Of Settlement Fund

The US Court of Appeals for the Ninth Circuit on September 11, 2018, affirmed a decision of the US District Court for the Northern District of California approving a US$1 million nationwide mislabeling class action settlement between a class of purchasers of Filippo Berio olive oil and the olive oil's manufacturer, Salov North America Corp. The appeal was brought by Theodore Frank, a non-participating class member and objector. Rohini Kumar v. Salov North America Corp. v. Theodore H. Frank, No. 17-16405; N.D. Cal., No. 4:14-cv-02411. 

Lead plaintiff Rohini Kumar filed the suit in May 2014, arguing that the front of the label on Salov's olive oil made claims that the product was "Imported from Italy," but small print on the back of the label said that some olives are grown and pressed in other countries before being shipped to Italy for blending and bottling. Under the January 2017 deal, class counsel received about $985,000 in fees from the US$1.2 million deal, while consumers that purchased the allegedly misleading olive oil would receive between two and five dollars each, or 50 cents per bottle of olive oil.  As a result of the litigation, Salov removed the phrase "Imported from Italy" from its products imported into the United States, and it replaced that phrase with the word "Imported." As part of the settlement agreement, Salov agreed to maintain these practices for at least three years after the effective date of the settlement agreement. Plaintiff's economics expert estimated the value of these practice changes to be approximately $19.9 million using a hedonic regression model.  Frank, who happened to be a class member, objected to the deal at the time, and then appealed after the deal was approved over his objection.

In a brief memorandum decision, the circuit court found that the district court did not abuse its discretion in approving the settlement agreement, citing In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 940 (9th Cir. 2011), and properly considered and applied the relevant Hanlon factors in its determination that the settlement was fair, reasonable, and adequate, citing Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998).

Further, the district court properly "considered the strength of the plaintiffs' case and the risk involved with further litigation, noting that Salov North America Corp. had a legitimate defense and that this "was [not] the strongest case [she] ha[d] ever seen," quoting District Judge Yvonne Gonzalez Rogers.

The court went on to note that the district court had also noted that proceeding to trial would be costly "given the need for expert testimony, and that the best potential outcome at trial would not exceed the recovery per bottle offered by the settlement."

In addition, the circuit court noted the lower court's recognition that the litigation was "hard fought" and that class counsel reached an "excellent result," including achieving the class's non-monetary goal of "get[ting] the defendants to improve their practices." Finding that there was no strong showing that the district court's decision was a clear abuse of discretion, the circuit court affirmed.

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