Schneider v. Chipotle Mexican Grill, Inc., 013120 CANDC, 16-cv-02200-HSG

Docket Nº:16-cv-02200-HSG
Opinion Judge:HAYWOOD S GILLIAM, JR., United States District Judge
Party Name:MARTIN SCHNEIDER, et al., Plaintiffs, v. CHIPOTLE MEXICAN GRILL, INC., Defendant.
Case Date:January 31, 2020
Court:United States District Courts, 9th Circuit, Northern District of California
 
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MARTIN SCHNEIDER, et al., Plaintiffs,

v.

CHIPOTLE MEXICAN GRILL, INC., Defendant.

No. 16-cv-02200-HSG

United States District Court, N.D. California

January 31, 2020

ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT RE: DKT. NO. 205

HAYWOOD S GILLIAM, JR., United States District Judge

Pending before the Court is the unopposed motion for preliminary approval of class action settlement filed by Plaintiffs.1 Dkt. No. 205. The parties have reached a settlement regarding Plaintiffs' claims and now seek the required court approval. For the reasons set forth below, the Court GRANTS Plaintiffs' motion for preliminary approval of class action settlement.

I. BACKGROUND

A. Factual Background

Plaintiffs bring this consumer class action against Defendant Chipotle Mexican Grill, Inc. alleging that Defendant's “non-GMO” claims about its food products were false and misleading. See generally Dkt. No. 1 (“Compl.”). According to Plaintiffs, Chipotle consistently advertised its food products as “non-GMO” and “GMO free.” Id. ¶¶ 31-40. However, these claims were purportedly false, because as alleged, the meat and dairy products “are all sourced from animals that are fed with a genetically engineered or GMO derived feed, ” and the soft drinks contain corn syrup, a GMO. Id. ¶¶ 41-43. Plaintiffs contend that had they known of the “true character and quality of the ingredients, ” they would not have purchased, or would have paid less for, Chipotle's food products. Id. ¶ 49.

Based on those facts, the complaint asserts the following ten causes of action: (1) California's Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq.; (2) California's False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq.; (3) California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; (4) Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq.; (5) Maryland's Consumer Protection Act, MD. Code Ann. § 13-101 et seq.; (6) New York's Consumer Protection Statute, N.Y. Gen. Bus. Law § 349; (7) New York's False Advertising Law, N.Y. Gen. Bus. Law § 350 et seq.; (8) unjust enrichment; (9) misrepresentation; and (10) declaratory relief. Id. ¶¶ 69-146.

B. Procedural History

Plaintiffs Martin Schneider, Sarah Deigert, Theresa Gamage, Nadia Parikka, Laurie Reese, and Tiffanie Zangwill initially filed this action on April 22, 2016.2 See generally Compl. Defendant moved to dismiss the complaint, and the Court granted the motion in part and denied it in part on November 4, 2016. Dkt. No. 36. The Court granted Defendant's motion to dismiss Plaintiffs' claims for injunctive relief, but otherwise denied the motion. Id. Plaintiffs filed a motion seeking reconsideration of the Court's order dismissing injunctive relief, Dkt. No. 87, which the Court granted, Dkt. No. 136. The Court amended its previous ruling and denied Defendant's motion to dismiss Plaintiffs' claims for injunctive relief. Dkt. No. 136.

On November 17, 2017, Chipotle filed a motion for summary judgment and Plaintiffs filed a motion for class certification. Dkt. Nos. 92, 95. The parties also filed their Daubert motions. Dkt. Nos. 100, 101, 117. On September 29, 2018, the Court denied Defendant's motion for summary judgment, granted Plaintiffs' motion for class certification, and denied both parties' Daubert motions. Dkt. No. 136. The Court certified the following three classes of consumers who purchased Defendant's products between April 27, 2015 and June 30, 2016 (the “Class Period”):

California: All persons in California who purchased Chipotle's Food Products containing meat and/or dairy ingredients during the Class Period.

Maryland: All persons in Maryland who purchased Chipotle's Food Products containing meat and/or dairy ingredients during the Class Period.

New York: All persons in New York who purchased Chipotle's Food Products containing meat and/or dairy ingredients during the Class Period.

Id. at 14, 30. The Court appointed Named Plaintiffs Schneider, Deigert, Gamage, and Parikka to represent the class and appointed their attorneys at Kaplan Fox as Class Counsel. Id. On October 15, 2018, Defendant filed a petition in the Court of Appeals for permission to appeal the Court's class certification order, and the petition was denied. Dkt. Nos. 137, 167.

Plaintiffs filed an administrative motion to approve the notice administrator, class notice plan, and schedule on January 9, 2019. Dkt. No. 150. Defendant opposed the motion and alleged that the notice plan was “too vague” and misrepresented the class definitions. Dkt. No. 151. Consistent with the Court's recommendation, and in an apparent effort to address Defendant's concerns, Plaintiffs moved to modify the class definitions. Dkt. No. 159. The Court granted in part and denied in part Plaintiffs' motion to modify the class definitions and certified the following classes:

California: All persons in California who purchased Chipotle's Food Products containing meat and/or dairy ingredients in its restaurants during the Class Period.

Maryland: All persons in Maryland who purchased Chipotle's Food Products containing meat and/or dairy ingredients in its restaurants during the Class Period.

New York: All persons in New York who purchased Chipotle's Food Products containing meat and/or dairy ingredients in its restaurants during the Class Period.

Dkt. No. 164 at 4. The language “in its restaurants” was added to each class definition. Id. The Court also held that it did not need to add the standard language excluding various categories of people to the class definition itself. Id. at 2 n.1.

The Court then directed the parties to file either a joint notice plan or competing proposals if they could not agree on a notice plan. Dkt. No. 168. The parties filed their competing proposals, and Plaintiffs filed an amended motion to approve notice administrator and class notice plan. Dkt. No. 177. On April 8, 2019, the Court granted in part and denied in part the amended administrative motion to approve notice administrator and class notice plan. Dkt. No. 180. Specifically, the Court denied Plaintiffs' motion to provide direct email notice to the approximately 550, 000 individuals in California, Maryland, and New York who purchased food from Chipotle in those states from online or app menus. Id. at 7. It also found Plaintiffs' proposal to issue a press release unwarranted under Rule 23. Id. at 8.

Defendant filed a motion to decertify the class on April 25, 2019, briefing for which was completed on May 15, 2019. Dkt. Nos. 184, 191, 192. The parties participated in a second mediation session before the Honorable Jay C. Gandhi (Ret.) of JAMS on July 2, 2019.3 Dkt. No. 146. They were able to reach an agreement in principle to settle the case on a classwide basis, and agreed to stay any pending dates, including the hearing on Defendant's motion to decertify the classes. Id. Plaintiffs moved for preliminary approval on September 11, 2019. Dkt. No. 205.

C. Settlement Agreement

Following extensive formal discovery and with the assistance of a mediator, the parties entered into a settlement agreement on September 11, 2019. Dkt. No. 205-2 (“SA”). The key terms are as follows:

Class Definition: The Settlement Class is defined as:

[A]ll persons in the United States who purchased Chipotle's Food Products in its restaurants during the Class Period.

SA § I.AA. Excluded from the Class are all persons who validly opt out of the Settlement in a timely manner; governmental entities; counsel of record for the parties; Defendant and any of its parents, affiliates, subsidiaries, independent service providers and all of its respective employees, officers, and directors; any Judge or judicial officer presiding over the matter, and all of their immediate families and judicial staff; and any natural person or entity that entered into a release with Defendant prior to the Effective Date concerning the Food Products. Id.

Settlement Benefits: Defendant will make a $6, 500, 000 non-reversionary payment. Id. § I.EE. The settlement payment includes payments to Class Members, settlement administrative expenses estimated at around $400, 000-$600, 000, incentive awards, and any attorneys' fees and costs awards. Id. §§ III.D, III.G; Dkt. No. 205-12 at ¶ 31. Individual claims are capped at $2.00 each and subject to a pro rata decrease. Dkt. No. 205-3, Ex. A. Each class member may only submit five (5) valid claims without proof or purchase, and ten (10) valid claims with proof of purchase. Id. Each household is capped at fifteen (15) claims. Id.

Cy Pres Distribution: Settlement checks that are not cashed within 120 days of mailing will be void and those funds will be donated to Public Justice, a non-profit legal organization, and Public Counsel, a pro bono law...

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