Summary of a Recent
Judicial Development in
Food Safety

Court Approves Class Action Settlement in Litigation
Involving Contaminated Pet Food

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In In re Pet Food Products Liability Litigation, No. 07-2867 (NLH), 2008 WL 4937632 (D.N.J. Nov. 18, 2008), the United States District Court for the District of New Jersey certified a plaintiff class and approved a proposed settlement in a class-action suit concerning contaminated pet food, finding the settlement to be fair and reasonable.

Background

Litigation was brought on behalf of consumers in the United States and Canada who purchased pet food that was recalled for allegedly containing contaminated wheat gluten and/or rice protein concentrate. Id. at *1. The court held a fairness hearing and heard argument on the plaintiffs' motion to have the class certified for purposes of settlement and to have the settlement approved and counsels' motion for attorneys' fees, and also heard argument on a motion to intervene in the settlement. Id. at *1-3.

Arguments

The proposed intervenors sought leave to intervene on the ground that their interests were not adequately represented by the existing plaintiffs; their claims involved the mislabeling of pet food that was not contaminated or recalled, and they argued that the settlement was overly broad and purported to release their claims with inadequate compensation for product purchase claims. Id. at *7.

Objectors to the settlement argued that it did not provide criminal penalties or was not punitive enough, that stricter testing and screening measures should be implemented throughout the pet food industry, and that the settlement did not provide for emotional damages. Id. at *9-10.

Analysis and Holdings

The court held that Federal Rule of Civil Procedure (FRCP) Rule 23 requirements for class certification were satisfied because the claims arose from the same nucleus of operative facts and involved the same legal theories, the class members were adequately represented, questions of law or fact common to the class members predominated over any questions affecting only individual class members, and a class action was superior to other available methods for the fair and efficient adjudication of the controversy. Id. at *3-7. Considering the motion to intervene, the court found that the settlement was not as broad as the proposed intervenors claimed because it applied only to claims by any settlement class member (defined as "all persons and entities who purchased, used or obtained, or whose pets used or consumed recalled pet food products" who had not opted out) that relate to "matters referenced in any claim raised . . . in the pet food recall litigation." Id. The court did not find any conflict between the interests of the proposed intervenors and the class representatives, and it determined that the amount allocated to product purchase claims was adequate. Id. at *8. The court further determined that the proposed release would not impermissibly encompass claims asserted in a similar pending class action regarding false labeling because the release only pertained to "recalled pet food products." Id. at *9.

Regarding the objectors' arguments, the court explained that this was a civil litigation and the court had no power to impose criminal sanctions on the defendants, nor did it have the jurisdiction or authority to impose stricter statutes and regulations governing the pet food industry. Id. at *9-10. The court further noted that "in almost every state in the Union, the current state of the law is that emotional damages are not recognized as a recoverable damage for pets." Id. at *10.

Considering the terms of the settlement, the court explained that the Third Circuit considers nine factors in evaluating whether a proposed settlement is fair, reasonable and adequate:

(1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.
Id. at *12.

The court found that all nine factors weighed in favor of approving the settlement; therefore, it approved the settlement and also granted the plaintiffs' motion for attorneys' fees. Id. at *12-25.

The case was decided on November 18, 2008.