NOTICE OF MOTION AND MOTION BY NATUREX FOR DETERMINATION OF GOOD FAITH SETTLEMENT 5:16-CV-00189-JGB-SP 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4147-3004-9818.1 STACY W. HARRISON (STATE BAR NO. 175028) [email protected]DAVID P. FUAD (STATE BAR NO. 265193) [email protected]ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street Suite 3200 Los Angeles, California 90017 Telephone: +1-213-629-2020 Facsimile: +1-213-612-2499 Attorneys for Defendant NATUREX, INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA – EASTERN DIVISION VEDA WOODARD, TERESA RIZZO- MARINO, and DIANE MORRISON, on behalf of themselves, all others similarly situated, and the general public, Plaintiffs, v. LEE LABRADA; LABRADA BODYBUILDING NUTRITION, INC.; LABRADA NUTRITIONAL SYSTEMS, INC.; DR. MEHMET C. OZ, M.D.; ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZ MEDIA; ZOCO PRODUCTIONS, LLC; HARPO PRODUCTIONS, INC.; SONY PICTURES TELEVISION, INC.; NATUREX, INC.; and INTERHEALTH NUTRACEUTICALS, INC., Defendants. Case No. 5:16-cv-00189-JGB (SPx) NOTICE OF MOTION AND MOTION BY DEFENDANT NATUREX, INC. FOR DETERMINATION OF GOOD FAITH SETTLEMENT Hearing Date: March 18, 2019 Hearing Time: 9:00 a.m. Courtroom: 1 Action Filed: February 2, 2016 Trial Date: None Set Case 5:16-cv-00189-JGB-SP Document 283 Filed 02/15/19 Page 1 of 5 Page ID #:5698
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STACY W. HARRISON (STATE BAR NO. 175028) DAVID P. FUAD ... · DAVID P. FUAD ORRICK, HERRINGTON & SUTCLIFFE LLP By: /s/ Stacy W. Harrison STACY W. HARRISON Attorneys for Defendant
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NOTICE OF MOTION AND MOTION BY
NATUREX FOR DETERMINATION
OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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STACY W. HARRISON (STATE BAR NO. 175028)[email protected] DAVID P. FUAD (STATE BAR NO. 265193) [email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street Suite 3200 Los Angeles, California 90017 Telephone: +1-213-629-2020 Facsimile: +1-213-612-2499
Attorneys for Defendant NATUREX, INC.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA – EASTERN DIVISION
VEDA WOODARD, TERESA RIZZO-MARINO, and DIANE MORRISON, on behalf of themselves, all others similarly situated, and the general public,
Plaintiffs, v.
LEE LABRADA; LABRADA BODYBUILDING NUTRITION, INC.; LABRADA NUTRITIONAL SYSTEMS, INC.; DR. MEHMET C. OZ, M.D.; ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZ MEDIA; ZOCO PRODUCTIONS, LLC; HARPO PRODUCTIONS, INC.; SONY PICTURES TELEVISION, INC.; NATUREX, INC.; and INTERHEALTH NUTRACEUTICALS, INC.,
Defendants.
Case No. 5:16-cv-00189-JGB (SPx)
NOTICE OF MOTION AND MOTION BY DEFENDANT NATUREX, INC. FOR DETERMINATION OF GOOD FAITH SETTLEMENT
605 C Street, Suite 200 San Diego, California 92101 (619) 595-3001 (telephone) (619) 595-3000 (facsimile)
Attorneys for Defendant INTERHEALTH NUTRACEUTICALS, INC.: Matthew L. Marshall (SBN 168013) [email protected] CLARK HILL LLP 1055 West Seventh Street, 24th Floor Los Angeles, California 90017-2503 (213) 891-9000 (telephone) (213) 488-1178 (facsimile)
Adam P. O’Connor (SBN 261685) [email protected] CLARK HILL LLP 600 West Broadway, Suite 500 San Diego, California 92101 (619) 557-0404 (telephone) (619) 557-0460 (facsimile)
Case 5:16-cv-00189-JGB-SP Document 283 Filed 02/15/19 Page 3 of 5 Page ID #:5700
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NOTICE OF MOTION AND MOTION BY
NATUREX FOR DETERMINATION
OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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Attorneys for Defendants LEE LABRADA, LABRADA BODYBUILDING NUTRITION, INC., and LABRADA NUTRITIONAL SYSTEMS, INC.:James G. Munisteri (pro hac vice) [email protected] Philip J. Morgan [email protected] GARDERE WYNNE SEWELL LLP 2000 Wells Fargo Plaza 1000 Louisiana Street Houston, Texas 77002 (713) 276-5500 (telephone) (713) 276-5555 (facsimile)
Craig S. Hubble, Esq. (SBN 200789) [email protected] LAW OFFICES OF CRAIG HUBBLE
1500 Rosecrans Avenue, Suite 500 PMB464 Manhattan Beach, California 90266 (310) 684-3027 (telephone) (310) 446-2598 (facsimile)
Attorneys for Defendants HARPO PRODUCTIONS, INC., ZOCO PRODUCTIONS, LLC and DR. MEHMET C. OZ, M.D., and ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZMEDIA: Charles L. Babcock, Lead Attorney (pro hac vice) Texas State Bar No. 01478500 William A.I. McDonald, III (pro hac vice) Texas State Bar No. 24071360 John K. Edwards (pro hac vice) Texas State Bar No. 24002040 JACKSON WALKER L.L.P. 1401 McKinney, Suite 1900 Houston, Texas 77010 (713) 752-4200 (telephone) (713) 752-4221 (facsimile)
Case 5:16-cv-00189-JGB-SP Document 283 Filed 02/15/19 Page 4 of 5 Page ID #:5701
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NOTICE OF MOTION AND MOTION BY
NATUREX FOR DETERMINATION
OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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Katherine M. Harwood, Esq. (Bar #225202) [email protected] FORD, WALKER, HAGGERTY & BEHAR
One World Trade Center, 27th Floor Long Beach, California 90831-2700 (562) 983-2500 (telephone) (562) 590-3546 (facsimile)
Attorneys for Defendant NATUREX, INC.: Stacy W. Harrison (Bar No. 175028) David P. Fuad (Bar No. 265193) ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street, Suite 3200 Los Angeles, California 90017 (213) 629-2020 (telephone) (213) 612-2499 (facsimile)
This Motion is based on this Notice, the concurrently-filed Memorandum of
Points and Authorities, the Declaration of Stacy W. Harrison and exhibits thereto,
upon all the pleadings, papers and files in this matter, and upon such oral or
documentary evidence as may be produced or heard at the hearing on this motion.
Dated: February 15, 2019 STACY W. HARRISONDAVID P. FUAD ORRICK, HERRINGTON & SUTCLIFFE LLP
By: /s/ Stacy W. HarrisonSTACY W. HARRISON Attorneys for Defendant
NATUREX, INC.
Case 5:16-cv-00189-JGB-SP Document 283 Filed 02/15/19 Page 5 of 5 Page ID #:5702
MEMO OF P&AS ISO NATUREX’S MOTION FOR
DETERMINATION OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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STACY W. HARRISON (STATE BAR NO. 175028)[email protected] DAVID P. FUAD (STATE BAR NO. 265193) [email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street Suite 3200 Los Angeles, California 90017 Telephone: +1-213-629-2020 Facsimile: +1-213-612-2499
Attorneys for Defendant NATUREX, INC.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA – EASTERN DIVISION
VEDA WOODARD, TERESA RIZZO-MARINO, and DIANE MORRISON, on behalf of themselves, all others similarly situated, and the general public,
Plaintiffs, v.
LEE LABRADA; LABRADA BODYBUILDING NUTRITION, INC.; LABRADA NUTRITIONAL SYSTEMS, INC.; DR. MEHMET C. OZ, M.D.; ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZ MEDIA; ZOCO PRODUCTIONS, LLC; HARPO PRODUCTIONS, INC.; SONY PICTURES TELEVISION, INC.; NATUREX, INC.; and INTERHEALTH NUTRACEUTICALS, INC.,
Defendants.
Case No. 5:16-cv-00189-JGB (SPx)
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT NATUREX, INC.’S MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
Bad faith is not established simply by “showing that a settling defendant paid
less than his theoretical proportionate or fair share.” Tech-Bilt, 38 Cal.3d. at 497
(citation omitted). The objecting party must demonstrate that “the settlement is so
far ‘out of the ballpark’ in relation to these factors as to be inconsistent with the
equitable objectives of the statute.” Abbott Ford, Inc. v. Superior Court 43 Cal.3d
858, 874 (1987) (citation omitted). This evaluation, in turn, must be made on the
basis of information available at the time of the settlement. Id.
In Tech-Bilt, the California Supreme Court set forth various factors to be
considered by a trial court in determining whether a settlement has been made “in
good faith” within the meaning of Section 877.6:
1. A rough approximation of plaintiffs' total recovery and the settlor's
proportionate liability;
2. The amount paid in settlement;
Case 5:16-cv-00189-JGB-SP Document 283-1 Filed 02/15/19 Page 6 of 10 Page ID #:5708
- - 6 - - MEMO OF P&AS ISO NATUREX’S MOTION FOR
DETERMINATION OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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3. The allocation of settlement proceeds among plaintiffs;
4. A recognition that a settlor should pay less in settlement than he would
if he were found liable after a trial;
5. The financial conditions and insurance policy limits of settling
defendants; and
6. The existence of collusion, fraud, or tortious conduct aimed to injure
the interests of nonsettling defendants.
Tech-Bilt, 38 Cal.3d. at 499. When evaluating the plaintiff’s total recovery, the
amount is not based on what plaintiff claims to be entitled to, but instead is based
on what the plaintiff could actually recover. Horton v. Superior Court, 194 Cal.
App. 3d 727, 735-36 (1987).
IV. THIS SETTLEMENT WAS MADE IN GOOD FAITH
Naturex requests that the Court find that its settlement was made in good
faith. As a threshold matter, Naturex has met its burden of establishing that a
settlement was reached. Accordingly, the burden is on any objector to show a lack
of good faith. Cal. Civ. Proc. § 877(d).
A. Rough Approximation of Plaintiffs’ Total Recovery and Naturex’s Proportionate Liability
Naturex strongly disputes any liability in this case. Plaintiffs do not have any
evidence that the Naturex Ingredient is ineffective at promoting weight loss, or that
any of Naturex’s representations regarding the Naturex Ingredient are untrue. In
addition, Naturex merely manufactures the Ingredient at issue. The Naturex
Ingredient is then incorporated into other manufacturers’ products, some with many
other ingredients, which are then sold by distributors and retailers. Accordingly,
there are many representations and statements that are made regarding the end
products sold to consumers that are not reviewed or approved by Naturex, or that
apply to other ingredients in those end products. Thus, because there are many other
entities involved in producing, distributing, and marketing the end products, there
Case 5:16-cv-00189-JGB-SP Document 283-1 Filed 02/15/19 Page 7 of 10 Page ID #:5709
- - 7 - - MEMO OF P&AS ISO NATUREX’S MOTION FOR
DETERMINATION OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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4126-8098-3578.3
are many other defendants from whom Plaintiffs can seek contribution. Moreover,
the total sales of the Naturex Ingredient at issue in this action is only $90,250.
Harrison Decl., ¶ 2, Ex. A.
All of these factors minimize or eliminate any potential liability for Naturex.
Nevertheless, to avoid the burden and uncertainty of continued litigation and trial,
Naturex has agreed to resolve this action for $1,300,000. This settlement amount is
a significant concession by Naturex given its limited or nonexistent liability, and an
indicator that this settlement was made in good faith. Naturex has also agreed to
make the representations described above regarding the Naturex Ingredient’s
effects.
B. Amount Paid in Settlement
Naturex has agreed to pay a non-reversionary sum of $1,300,000, plus the
non-monetary relief described above.
C. The Allocation Of Settlement Proceeds Among Plaintiffs
The settlement amount will benefit all Plaintiffs and the proposed Class.
D. Recognition That Naturex Should Pay Less In Settlement Than If Found Liable After A Trial
As described above, Naturex has significant defenses to Plaintiffs’ claims.
Indeed, as the parties’ Motion for Preliminary Approval acknowledges:
Plaintiffs would have to prove that Naturex was responsible for misleading representations and that the Svetol ingredient produced by Naturex is inefficacious for weight loss. This inquiry would like devolve into an expensive and uncertain “battle of experts.” Moreover, Plaintiffs would face a strong hurdle at class certification and summary judgment to establish damages against Naturex. Naturex vigorously denies Plaintiffs’ allegations and asserts that neither Plaintiffs nor the Class suffered any harm or damages. In addition, Naturex would no doubt present a vigorous defense at trial, and there is no assurance that the Class would prevail – or even if they did, that they would be able to obtain an award of damages significantly higher than achieved here absent such risks.
Plaintiffs’ Motion for Preliminary Approval at 12-13.
Case 5:16-cv-00189-JGB-SP Document 283-1 Filed 02/15/19 Page 8 of 10 Page ID #:5710
- - 8 - - MEMO OF P&AS ISO NATUREX’S MOTION FOR
DETERMINATION OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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Accordingly, this settlement amount recognizes that Naturex should pay less
in settlement than at trial.
E. Naturex’s Financial Condition Supports a Good Faith Determination
Given that only $90,250 of the Naturex Ingredient was sold to manufacture
the products at issue in this case, the $1,300,000 settlement amount easily supports
a finding that this settlement was made in good faith. Naturex does not have
insurance contributing to the cost of this settlement. See Rule 26(f) Joint
Scheduling Report at 14:20-22 [Dkt. No. 121].
F. There Was No Collusion, Fraud, Or Tortious Conduct Aimed To Injure The Interests Of Nonsettling Defendants
As described above and in the parties’ concurrently-filed Motion for
Preliminary Approval, this settlement was entered into following two arm’s-length
mediations, significant discovery and motion practice, and the parties’ diligent
negotiations. There was no collusion, fraud, or tortious conduct involved in this
settlement, and no evidence exists to support such a claim.
G. Plaintiffs’ Total Recovery Against Naturex Should Be Zero
Because there is no evidence that the Naturex Ingredient is not effective or
that Naturex was responsible for any misleading representations regarding the
Ingredient’s efficacy, Naturex is unlikely to be found liable and therefore Plaintiffs’
recovery should be nothing.
V. CONCLUSION
The Tech-Bilt factors all support a good faith finding. For all the reasons
discussed above, the Court should grant Naturex’s Motion For Determination of
Good Faith Settlement and issue an order pursuant to Code of Civil Procedure
Section § 877.6(c) barring any other joint tortfeasor or co-obligor from any further
claims against Naturex for equitable comparative fault, indemnity, contribution,
partial or comparative indemnity, based upon comparative negligence or
comparative fault.
Case 5:16-cv-00189-JGB-SP Document 283-1 Filed 02/15/19 Page 9 of 10 Page ID #:5711
- - 9 - - MEMO OF P&AS ISO NATUREX’S MOTION FOR
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Dated: February 15, 2019 STACY W. HARRISONDAVID P. FUAD ORRICK, HERRINGTON & SUTCLIFFE LLP
By: /s/ Stacy W. HarrisonSTACY W. HARRISON Attorneys for Defendant
NATUREX, INC.
Case 5:16-cv-00189-JGB-SP Document 283-1 Filed 02/15/19 Page 10 of 10 Page ID #:5712
- 1 - HARRISON DECL. ISO NATUREX’S MOTION FOR
GOOD FAITH SETTLEMENT DETERMINATION
5:16-CV-00189-JGB-SP
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4162-5094-2746
STACY W. HARRISON (STATE BAR NO. 175028)[email protected] DAVID P. FUAD (STATE BAR NO. 265193) [email protected] ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street Suite 3200 Los Angeles, California 90017 Telephone: +1-213-629-2020 Facsimile: +1-213-612-2499
Attorneys for Defendant NATUREX, INC.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA – EASTERN DIVISION
VEDA WOODARD, TERESA RIZZO-MARINO, and DIANE MORRISON, on behalf of themselves, all others similarly situated, and the general public,
Plaintiffs, v.
LEE LABRADA; LABRADA BODYBUILDING NUTRITION, INC.; LABRADA NUTRITIONAL SYSTEMS, INC.; DR. MEHMET C. OZ, M.D.; ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZ MEDIA; ZOCO PRODUCTIONS, LLC; HARPO PRODUCTIONS, INC.; SONY PICTURES TELEVISION, INC.; NATUREX, INC.; and INTERHEALTH NUTRACEUTICALS, INC.,
Defendants.
Case No. 5:16-cv-00189-JGB (SPx)
DECLARATION OF STACY W. HARRISON IN SUPPORT OF DEFENDANT NATUREX, INC.’S MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
Ingredient Amount Cost Per Unit PriceSvetol Green Coffee Bean(50% total polyphenols, 45% chlorogenic acids) 125kg 190 $23,750.00
Other Comments or Special Instructions SUBTOTAL: $23,750.00========== ==========Total: $23,750.00
Authorized Date
Page 1/1 EXHIBIT A - PAGE 5
Case 5:16-cv-00189-JGB-SP Document 283-2 Filed 02/15/19 Page 6 of 6 Page ID #:5718
[PROPOSED] ORDER GRANTING NATUREX’S
MOTION FOR DETERMINATION
OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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4158-2089-6538.2
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA – EASTERN DIVISION
VEDA WOODARD, TERESA RIZZO-MARINO, and DIANE MORRISON, on behalf of themselves, all others similarly situated, and the general public,
Plaintiffs, v.
LEE LABRADA; LABRADA BODYBUILDING NUTRITION, INC.; LABRADA NUTRITIONAL SYSTEMS, INC.; DR. MEHMET C. OZ, M.D.; ENTERTAINMENT MEDIA VENTURES, INC. d/b/a OZ MEDIA; ZOCO PRODUCTIONS, LLC; HARPO PRODUCTIONS, INC.; SONY PICTURES TELEVISION, INC.; NATUREX, INC.; and INTERHEALTH NUTRACEUTICALS, INC.,
Defendants.
Case No. 5:16-cv-00189-JGB (SPx)
[PROPOSED] ORDER GRANTING DEFENDANT NATUREX, INC.’S MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT
Case 5:16-cv-00189-JGB-SP Document 283-3 Filed 02/15/19 Page 1 of 2 Page ID #:5719
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[PROPOSED] ORDER GRANTING NATUREX’S
MOTION FOR DETERMINATION
OF GOOD FAITH SETTLEMENT
5:16-CV-00189-JGB-SP
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[Proposed] Order
Defendant Naturex, Inc.’s (“Naturex”) Motion for Determination of Good
Faith Settlement came on regularly for hearing at 9:00 a.m. on March 18, 2019.
Having considered the papers, the evidence, and arguments of counsel, the Court
hereby GRANTS the Motion and finds, pursuant to California Code of Civil
Procedure sections 877 and 877.6, that Class Plaintiffs and Proposed Class
Representatives Veda Woodard, Teresa Rizzo-Marino, and Diane Morrison
(“collectively, Plaintiffs”) and Naturex’s partial class action settlement in the
above-entitled action is in good faith. The Court prohibits any current or future
cross-complaints, complaints, or claims against Naturex for partial or comparative
equitable contribution, fault, or indemnity, based on comparative negligence or
comparative fault, arising out of the subject matter of the above-entitled action.
The Court additionally retains jurisdiction pursuant to CCP § 664.6 to