Class Action Settlement Agreement
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Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 1 of 162 PageID #: 522 EXECUTION VERSION CLASS ACTION SETTLEMENT AGREEMENT LESLIE FROHBERG, et al. vs. CUMBERLAND PACKING CORP. Court File No. 14-00748-KAM-RLM Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 2 of 162 PageID #: 523 TABLE OF CONTENTS TABLE OF EXHIBITS ................................................................................................................. iii CLASS ACTION SETTLEMENT AGREEMENT.........................................................................1 I. RECITALS ..........................................................................................................................1 II. DEFINITIONS .....................................................................................................................6 III. CERTIFICATION OF THE SETTLEMENT CLASS AND PRELIMINARY APPROVAL ......................................................................................................................13 IV. SETTLEMENT CONSIDERATION ................................................................................14 4.1 Payments by Cumberland ......................................................................................14 4.2 Additional Benefits ................................................................................................15 4.3 Administration .......................................................................................................15 4.4 Eligibility and Process for Obtaining a Cash Payment ..........................................16 4.5 Submission of Claims to the Class Action Settlement Administrator ...................20 4.6 Claim Form Review ...............................................................................................20 4.7 Payment of Claims .................................................................................................22 V. NOTICE TO CLASS AND ADMINISTRATION OF PROPOSED SETTLEMENT ..................................................................................................................23 5.1 Duties and Responsibilities of the Settlement Administrator ................................23 VI. OBJECTIONS AND REQUESTS FOR EXCLUSION ....................................................29 VII. RELEASES ........................................................................................................................33 VIII. ATTORNEYS’ FEES AND EXPENSES AND CLASS REPRESENTATIVE INCENTIVE AWARDS ....................................................................................................35 IX. NO ADMISSION OF LIABILITY ....................................................................................36 X. ADDITIONAL PROVISIONS ..........................................................................................37 ii Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 3 of 162 PageID #: 524 EXECUTION VERSION TABLE OF EXHIBITS Exhibit A: Claim Form Exhibit B: Class Notice or Long Form Notice Exhibit C: Notice Plan Exhibit D: Summary Class Notice or Short Form Notice Exhibit E: Escrow Agreement iii Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 4 of 162 PageID #: 525 EXECUTION VERSION CLASS ACTION SETTLEMENT AGREEMENT This 9th day of October, 2015, Plaintiffs Leslie Frohberg and Nancy Harding, individually and on behalf of the Settlement Class Members, and Defendant Cumberland Packing Corp. hereby enter into this Class Action Settlement Agreement (“Agreement”). The Parties intend this Agreement to fully, finally, and forever resolve, discharge, and settle all claims and potential claims of any class members that relate to or arise from the allegations in the Complaints in this case and/or any labeling, advertising or marketing of Stevia In The Raw. I. RECITALS 1.1 On July 8, 2013, Plaintiffs’ Counsel sent a letter and draft complaint to Cumberland on behalf of Plaintiff Nancy Harding. The letter and draft complaint alleged Cumberland represented that the Stevia in the Raw Consumer Products were “natural” through labeling, marketing, and advertising and that the Stevia in the Raw Consumer Products were not, in fact, natural because they contained non-natural and/or synthetic ingredients. The letter and draft complaint alleged the stevia leaf extract within the Stevia in the Raw Consumer Products was so highly processed that no reasonable consumer would deem it natural and that the dextrose and maltodextrin in the Stevia in the Raw Products were highly processed and derived from genetically modified corn, neither of which reasonable consumers would deem to be natural. The letter and draft complaint set out claims against Cumberland for violation of Minnesota’s Prevention of Consumer Fraud Act, Minn. Stat. § 325F.68 et seq., Unlawful Trade Practices Act, Minn. Stat. § 325D.09 et seq., Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43 et seq., and False Statement in Advertisement Act, Minn. Stat. § 325F.67, breach of express warranty under the laws of 44 states, and unjust enrichment, on behalf of Ms. Harding and putative Minnesota and nationwide classes of similarly situated consumers. 1 Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 5 of 162 PageID #: 526 1.2 Plaintiffs Leslie Frohberg and Nancy Harding originally filed the Action in the United States District Court for the Eastern District of New York on February 3, 2014, challenging the labeling, marketing, and advertising of Cumberland’s Stevia in the Raw Consumer Products. The original complaint alleged Cumberland falsely and deceptively represented the Stevia in the Raw Consumer Products as “natural” when they, in fact, contained non-natural ingredients. The original complaint alleged that the ingredients dextrose and maltodextrin were highly processed and contained genetically modified ingredients and, as a result, were unnatural, and that these ingredients constituted the bulk of the Stevia in the Raw Consumer Products. The original complaint also alleged the stevia leaf extract in the Stevia in the Raw Consumer Products was highly processed and/or synthetic. Plaintiffs brought claims on behalf of New York, Minnesota, and nationwide classes for violation of sections 349 and 350 of New York’s Consumer Protection for Deceptive Acts and Practices Law, N.Y. Gen. Bus. Law § 349 et seq., violation of Minnesota’s Prevention of Consumer Fraud Act, Minn. Stat. § 325F.68 et seq., Unlawful Trade Practices Act, Minn. Stat. § 325D.09 et seq., Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43 et seq., and False Statement in Advertisement Act, Minn. Stat. § 325F.67, breach of express warranty under the laws of 44 states, and unjust enrichment. 1.3 Cumberland and Plaintiff’s Counsel mediated the claims in Plaintiff’s Complaint on December 11, 2013, before David Geronemus, Esquire, of JAMS, in New York, York. As part of the mediation process, Plaintiffs’ Counsel obtained information and documents from Cumberland through confidential, pre-mediation discovery, including information concerning marketing, label design, product formulation, and sales information for the Stevia in the Raw Consumer Products. The Parties reached an impasse in their negotiations and did not settle the Action at this time. 2 Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 6 of 162 PageID #: 527 1.4 From December 2013 through May 2014, Cumberland and Plaintiffs’ Counsel continued hard-fought negotiations for a settlement agreement with an in-person meeting, phone conferences, written exchanges of information, and additional informal discovery. 1.5 On June 13, 2014, the Parties attended a settlement conference with Magistrate Judge Roanne L. Mann. The Court made a settlement proposal to the Parties, which was not accepted by the Court’s deadline of June 16, 2014. 1.6 Plaintiff Nancy Harding voluntarily dismissed her claims in the Action without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) on June 23, 2014. (Notice Voluntary Dismissal Pl. Harding, ECF No. 22.) 1.7 Plaintiff Leslie Frohberg filed an Amended Complaint on June 23, 2014. (Am. Compl., ECF No. 23.) The Amended Complaint made allegations similar to the original Complaint, and alleged violations of sections 349 and 350 of New York’s Consumer Protection for Deceptive Acts and Practices Law, N.Y. Gen. Bus. Law § 349 et seq., breach of express warranty under the laws of 44 states, negligent misrepresentation, fraud, and unjust enrichment. Plaintiff seeks injunctive and monetary relief on behalf of herself and the putative classes. 1.8 The Parties continued discussing possible resolution of this matter, while litigating the merits of the claims. A fully briefed Motion to Dismiss the Amended Complaint was filed with the Court on December 17, 2014. As a result of continued settlement discussions, the Parties requested a stay on the ruling of the Motion to Dismiss on June 18, 2015. 1.9 After approximately one-and-a-half years of hard-fought negotiations, the Parties were able to reach this Settlement. 1.10 In response to this Action, Cumberland has removed the natural claim from the packaging and labeling of its Stevia In The Raw Products. 3 Case 1:14-cv-00748-RLM Document 46-2 Filed 10/09/15 Page 7 of 162 PageID #: 528 1.11 In accordance with this Settlement Agreement, Plaintiffs will file a Second Amended Complaint on behalf of New York, Minnesota, and nationwide classes for violation of sections 349 and 350 of New York’s Consumer Protection for Deceptive Acts and Practices Law, N.Y. Gen.