Lisa Jones v. Anna St. John

Citation: Not availableDocket: 21-2292

Court: Court of Appeals for the Eighth Circuit; June 29, 2022; Federal Appellate Court

Original Court Document: View Document

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The United States Court of Appeals for the Eighth Circuit addressed the appeal of Anna St. John, who objected to a class action settlement between Monsanto Company and Plaintiffs Lisa Jones, Horacio Torres Bonilla, and Kristoffer Yee, concerning Roundup products. The district court had overruled St. John's objections, approved the settlement, and awarded attorney’s fees to the Plaintiffs. The case originated from claims in February 2019 regarding misleading labeling of Roundup, which suggested glyphosate was safe for humans and pets. Plaintiffs argued that Monsanto was aware glyphosate could be found in gut bacteria of humans and animals, rendering the label false. 

Following mediation and expert evaluations, the parties settled on a $39.55 million Common Fund. Plaintiffs’ expert estimated damages at 15.9% of the product's value, while Monsanto's expert estimated 2.5%. The settlement included provisions for Plaintiffs' counsel to seek 25% of the fund as fees, with class members receiving 10% of their product's average retail price. Remaining funds would be allocated cy pres. A Second Corrected Class Action Settlement Agreement was executed, refining the class members' claim release, proposing $2,500 incentive payments for named plaintiffs, designating cy pres recipients, and extending the notice period and opt-out deadline. The district court granted preliminary approval, certified a national settlement class, and initiated a comprehensive notice campaign to inform potential class members.

In July, during the notice period, the claims administrator was instructed to enhance the notice program through targeted digital banners, email distribution to a curated list, advertisements in relevant digital newsletters, and postings on class action aggregation websites. This effort reached 82% of class members, averaging 2.51 contacts. In October 2020, the parties requested the district court's approval for an updated settlement and notice, proposing a potential increase in payments to claimants from 10% to 50% of product value and adding the Berkeley Center for Consumer Law as a cy pres recipient. They sought an additional 90-day notice period, incorporating both original and supplemental notice methods, along with new television and radio advertisements. The district court approved this proposal, and the supplemental notice period ended on February 16, 2021. 

Post-notice, the claims administrator reported receiving 285,399 claims for over 1 million products, with an anticipated rejection of about 43,000 claims due to duplication or deficiencies, resulting in a 2-3% claims rate from nearly 89 million units sold. Valid claims were estimated to total between $11.72 million and $13.34 million, with attorney fees set at $9.89 million and administrator fees at $1.8 million, leaving $14 to $16 million for cy pres distribution, dependent on the final claim values. 

Objections to the settlement were raised by St. John, who argued for more proactive measures to engage class members, suggested increasing claimant payments to 100% before cy pres donations, claimed that the donation to cy pres organizations violated her First Amendment rights, and contended that cy pres amounts should not factor into attorney fee calculations nor should time spent in related litigation in another jurisdiction be included in the lodestar analysis. The legal standard for reviewing the district court's settlement approval involves assessing whether all relevant factors were considered and whether any irrelevant influences or clear errors in judgment occurred. St. John's objections specifically target the size of the cy pres distribution, advocating for additional efforts to locate class members and a higher pro rata distribution from the Common Fund.

The district court's decision regarding the sufficiency of notice to the class was upheld, emphasizing the effectiveness of the comprehensive notice plan and the claims administrator's estimated outcomes. The court referenced precedent indicating that a low claim rate (e.g., 3%) is typical in consumer class actions and does not imply unfairness. In a notable case, a settlement involving 3.5 million households resulted in 105,173 claims against a $32 million fund after approximately 87% received notice.

St. John argued for additional notice methods, specifically through subpoenas for consumer data from retailers to facilitate direct payments. However, the district court had discussed this with the parties, concluding that the existing notice plan was more effective given concerns about data accuracy and privacy. The record lacks further exploration of St. John's proposal, and while such actions could be beneficial in some cases, the court found no error in not mandating this approach alongside the already implemented notice strategy.

Additionally, St. John contended that class members should receive a larger share of the product price (up to 100%) before any residual funds are allocated cy pres, citing In re BankAmerica Corp. Securities Litigation. St. John argued that unliquidated damages should allow full recovery before cy pres distribution, dismissing concerns about potential windfalls. However, the court clarified that unclaimed funds may only be distributed cy pres after all class members have been fully compensated, a principle established in earlier cases, highlighting that unliquidated claims do not equate to full compensation simply through initial distribution amounts.

Settlement agreements providing only a percentage of damages claimed by plaintiffs, particularly when there is disagreement on liability and damages, do not guarantee full compensation for class members. The court must independently assess the damages recoverable by class members prior to approving any cy pres distribution of residual funds. In a previous case, BankAmerica, the error was not the lack of full damages recovery but the absence of a determination of the damages owed to class members before granting a cy pres distribution. In the current case, the district court evaluated the situation and concluded that a payment of 50% of the average retail price adequately compensated class members, who had no equitable claim to remaining funds, which were properly allocated cy pres.

The district court also noted that any damages claimed by class members must account for the benefits received from the product in question. Expert surveys supported the district court's finding of a minimal differential in damages. 

Additionally, the argument that cy pres distributions to charitable organizations violate the First Amendment as compelled speech was rejected. The court clarified that class members are not compelled to subsidize speech through cy pres distributions, as residual funds can only be allocated after class members who filed claims are fully compensated. Individuals who do not claim their portion of the settlement are not compelled to support any speech and could have opted out or filed a claim. The situation differs from the compelled deductions addressed in Supreme Court cases, as cy pres funds are not taken from individual class members but are residual amounts that cannot feasibly be distributed. Thus, cy pres distributions do not infringe on the First Amendment rights of class members.

St. John contests the attorney’s fee of 25% of the Common Fund allocated to class counsel, arguing that the cy pres funds should be excluded from the fee calculation since they do not directly benefit the class. However, the court finds that cy pres funds were available for class members to claim, and the plaintiffs' counsel cannot be held responsible for the lack of claims submitted. The cy pres distribution serves an indirect benefit aligned with the lawsuit's objectives. The court concludes that including cy pres in the fee calculation is not an abuse of discretion.

St. John also claims the district court erred in valuing Monsanto's agreement to change the Roundup label, asserting that the settlement does not grant plaintiffs control over the label's wording. The court disagrees, stating that the prior label was legally approved, and the plaintiffs could not have obtained an injunction. Therefore, the change in labeling is considered part of the class's overall success under the settlement.

Additionally, St. John argues against including work from prior litigation, Blitz v. Monsanto Co., in the fee award. The court cites Miller v. Dugan, affirming that fees can cover time spent on related litigation if the work product was relevant to the current case and the plaintiff was not compensated for that work. The district court determined that the close relationship between Blitz and the current case justified including that work in the fee assessment. Since the settlement resolves both this case and Blitz, the inclusion of that work was deemed appropriate.

Consequently, the district court's approval of the class action settlement and the attorney's fee calculation is affirmed.