StarKist Co. recently agreed in principle to a $12 million settlement with a putative class of plaintiffs concerning alleged under-filling of tuna fish cans. But agreeing on the dollar figure seems to have been the easy part; the parties in this bitterly-fought case have become embroiled in motion practice about the allocation of that $12 million payout.
The case under discussion is Hendricks v. StarKist Co., No. 3:13-cv-0729-HSG in the Northern District of California. Plaintiff alleged that StarKist had been under-filling its cans of tuna fish, resulting in a product weight that fell below the federally mandated minimum averages of 2.84 to 3.23 ounces of tuna per 5 ounce can. This practice, plaintiff alleged, violated California’s Consumer Legal Remedies Act, California’s False Advertising Law, California’s Unfair Competition Law, and plaintiff also brought various common law claims.
StarKist moved to transfer or dismiss the case, and the Court denied the motion to transfer and mostly denied StarKist’s motion to dismiss. The Court also denied StarKist’s motion for reargument. Plaintiff subsequently moved to certify a nationwide class for his common law claims, moved for sanctions relating to alleged discovery misconduct, and several interested parties sought to intervene and certify statewide sub-classes under other states’ laws. On the morning that all those motions were to be argued, the parties signed a binding settlement term sheet under which StarKist would make available $8 million in cash and $4 million in vouchers to the settlement class.
There was a catch, however, over how to allocate payments from the settlement fund. Plaintiff proposed a flat-rate payout of $25 in cash or $50 in vouchers to class members. Plaintiff’s proposal would potentially exhaust the settlement fund quickly, and Starkist objected to it. Specifically, StarKist argued that it is “arbitrary and bear[s] no relationship to the number of StarKist products each class member purchased or the extent of purported injury” (emphasis in original). By contrast, StarKist’s allocation proposal would award each class member $1.00 for up to ten products purchased, and an additional $1.00 for every ten cans of StarKist tuna fish purchased with an upper limit set at 250 cans or $25.00. StarKist also proposed that vouchers be available in lieu of cash at a value of $1.50 per ten cans of StarKist tuna fish purchased with a maximum value of $37.50.
It remains to be seen whether StarKist’s arguments will persuade the Court to can plaintiff’s flat-rate payout. We will, of course, monitor developments in this case, but in the interim it bears repeating that sometimes the dollar figure is the easy part of settling a putative class action.