Duran v. Obesity Research Institute

Fred Duran filed a putative class action complaint against Obesity Research Institute, LLC (ORI) and Wal-Mart Stores, Inc. (Wal-Mart) (collectively, defendants). Duran alleged defendants falsely claimed that ORI's products, Lipozene and MetaboUp, had weight loss benefits. The court approved a claims-made settlement providing that class members submitting a claim without proof of purchase would receive $15, and those submitting receipt(s) would receive one refund of double the unit price paid. The settlement also provided that ORI would cease making certain assertions in product advertising. Defendants also agreed to not oppose a motion seeking $100,000 in attorney fees to class counsel. Objectors, class members DeMarie Fernandez, Alfonso Mendoza, and Brian Horowitz appealed, contending the settlement was the product of collusion. Objectors claimed the class did not receive sufficient notice of settlement, and the settlement was unreasonable and inadequate. They also contended the attorney fee award was excessive. The Court of Appeal reviewed the case and concluded that the trial court's judgment had to be reversed because the class notice failed in its fundamental purpose, to apprise class members of the terms of the proposed settlement. "The erroneous notice injected a fatal flaw into the entire settlement process and undermines the court's analysis of the settlement's fairness." View "Duran v. Obesity Research Institute" on Justia Law