On Monday evening, the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) filed its opening appeal brief in a class action where the plaintiffs claim Filippo Berio olive oil was falsely marketed as “Imported from Italy,” when the olives used actually came from other countries.
In Kumar v. Salov North America Corp., CCAF appeals the approval of a grossly unfair settlement that allows class counsel to walk away with nearly $1 million in fees and expenses—more than 80 percent of the settlement fund—or more than four times the value of the cash delivered to class members. The settlement also provides worthless injunctive relief—changes to the bottle labels that Filippo Berio made more than a year before this settlement.
“Class attorneys claimed a million-dollar payday for themselves, while they left their clients with a fraction of that amount and redundant injunctive relief,” said CCAF senior attorney Melissa Holyoak. “An injunction that does not require a defendant to change its behavior is worth nothing to the class.”
CCAF argues that the district court wrongly approved the settlement based on the fiction that the settlement was worth the maximum possible payout to the class, when in reality, there were only 53,030 claims submitted for a total value of $210,985. In doing so, the district court ignored Ninth Circuit law requiring it to look at the economic reality of a settlement. The district court also placed a fictive multi-million dollar value on an injunction barring the defendant from using the phrase “Imported from Italy” on the product labels, when the defendant had voluntarily stopped using that phrase in mid-2015.
ABOUT: The Competitive Enterprise Institute’s Center for Class Action Fairness represents class members against unfair class action procedures and settlements. Originally founded by Ted Frank in 2009, the center has won millions of dollars for consumers and shareholders and won landmark precedents that safeguard consumers, investors, courts, and the general public.
Unfair settlements generally serve self-interested lawyers and third parties at the expense of absent class members, the group of people whose rights are traded away to settle a class action. Lawyers have an interest in their fees, defendants have an interest in cheaply disposing of a lawsuit, and the class’s interests can take a back seat in the process. CEI seeks to solve these problems by representing such class members pro bono and presenting judges with the other side of the argument.