SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

CATHY O’BRIEN and LAURA ADNEY, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

POPSUGAR INC. and POPSUGAR MEDIA INC.,

Defendants.

Case No. 18CV338709

TENTATIVE RULING RE: MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT

The above-entitled action comes on for hearing before the Honorable Patricia M. Lucas on February 14, 2020 at 9:00 a.m. in Department 3. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
This is a putative class action. Plaintiffs Cathy O’Brien and Laura Adney (collectively, “Plaintiffs”) are social media influencers. (Amended Class Action Complaint (“Complaint”), ¶¶ 4-5.) Thousands of influencers across the country recently learned that defendant PopSugar, a pop culture website focusing on celebrity news, entertainment, fashion, which has its own shopping platform, impersonated and misappropriated the influencers’ internet identities without their consent from early or mid-2017 through early or mid-2018. (Complaint, ¶ 2.) PopSugar scraped influencers’ content, photos, brand, likenesses, and logos and used them to create profiles for each influencer on the PopSugar website for PopSugar’s own commercial gain. (Ibid.) PopSugar also removed influencers’ affiliate links from the posts replicated on its website and replaced them with ShopStyle links that would instead pay PopSugar for every click made on the influencers’ posts. (Ibid.)

The Complaint, filed on June 10, 2019, sets forth the following causes of action: (1) Violations of California Unfair Competition Law; (2) Violation of California’s Common Law Right of Publicity; (3) Violation of California’s Right of Publicity Statute; (4) Common Law Intentional Interference with Contractual Relationship; (5) Unjust Enrichment; and Violation of the Lanham Act (15 U.S.C. § 1125).)

The parties have reached a settlement. On August 16, 2019, the Court granted preliminary approval of the settlement. Plaintiffs now move for final approval of the settlement.

III. LEGAL STANDARD
IV.
Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)

In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as “the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, citing Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc. (9th Cir. 1982) 688 F.2d 615, 624.)

“The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case.” (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk, supra, 48 Cal.App.4th at p. 1801 and Officers for Justice v. Civil Service Com’n, etc., supra, 688 F.2d at p. 625, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk, supra, 48 Cal.App.4th at p. 1802.)

V. DISCUSSION
VI.
The case has been settled on behalf of the following class:

[A]ll natural persons for whom POPSUGAR’s records indicate that (i) POPSUGAR displayed a Profiled Page during the Class Period or (ii) whose Image(s), after being posted to a POPSUGAR webpage, generated a Commission during the Class Period.

The class period is May 1, 2017, through June 7, 2018.

This is a non-reversionary settlement requiring class members to submit claims. As discussed in connection with preliminary approval, defendants PopSugar, Inc. and PopSugar Media, Inc. (collectively, “PopSugar”) will pay a total amount of $2,115,000. Out of this amount, payments will be made for attorneys’ fees ($705,000), costs ($28,254.21), incentive awards ($7,500 to each class representative), and claims administration expenses ($57,361).

Reminders will be sent to class members who have not cashed their checks after 120 days. Checks remaining uncashed after 180 days will be directed to the Dispute Resolution Fund. Amounts ultimately remaining from the Dispute Resolution Fund will be awarded to a cy pres recipient – the International Women’s Media Foundation.

On August 21, 2019, the settlement administrator received an Excel file from PopSugar that contained a list of 5,449 Instagram handles and email addresses. (Declaration of Shanthi Pratheek Koppolu on Behalf of Settlement Administrator Regarding Notice (“Koppolu Decl.”), ¶ 2.) Email notices were sent to a total of 4,887 class members whose email addresses could be identified. (Id. at ¶ 3.) For class members for whom a corresponding email was not located of for whom the email was returned as undeliverable, the settlement administrator sent a direct message to the class member via Instagram, Web form contact, or Facebook/LinkedIn. (Id. at ¶ 4.) This was done for a total of 395 class members. (Ibid.) Notice has been provided to a total of 5,282 class members. (Ibid.) The settlement administrator has also established a website and toll-free telephone number to provide information about the settlement. (Id. at ¶¶ 7-8.)

As of January 10, 2020, the deadline to submit a claim, the settlement administrator had received 609 claims. (Koppolu Decl., ¶ 9.) Six additional claims were submitted after the January 10 deadline. (Ibid.) Neither Plaintiffs nor the settlement administrator state whether the late claims will be accepted for settlement payments. Plaintiffs shall provide this information to the Court at the hearing.

As of January 15, 2010, there have been no objections to the settlement or requests to opt out. The Court previously found that the proposed settlement is fair and the Court continues to make that finding for purposes of final approval.

Plaintiffs request class representative incentive awards of $7,500 for each of the two class representatives – Cathy O’Brien and Laura Adney.

The rationale for making enhancement or incentive awards to named plaintiffs is that they should be compensated for the expense or risk they have incurred in conferring a benefit on other members of the class. An incentive award is appropriate if it is necessary to induce an individual to participate in the suit. Criteria courts may consider in determining whether to make an incentive award include: 1) the risk to the class representative in commencing suit, both financial and otherwise; 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount of time and effort spent by the class representative; 4) the duration of the litigation and; 5) the personal benefit (or lack thereof) enjoyed by the class representative as a result of the litigation. These “incentive awards” to class representatives must not be disproportionate to the amount of time and energy expended in pursuit of the lawsuit.

(Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394-1395, quotation marks, brackets, ellipses, and citations omitted.)

The class representatives have submitted nearly identical declarations, detailing their participation in the lawsuit. O’Brien states that she answered detailed questions from her attorneys, assisted in the drafting of the Complaint, gathered relevant documents, and participated in mediation. (Declaration of Cathy O’Brien in Support of Plaintiffs’ Unopposed Motion for Final Approval of Settlement and Award of Attorneys’ Fees, Costs, and Service Awards, ¶¶ 4-8.) She spent approximately 40 hours on the case. (Id. at ¶ 9.) Adney states the same as O’Brien in her declaration. (Declaration of Laura Adney in Support of Plaintiffs’ Unopposed Motion for Final Approval of Settlement and Award of Attorneys’ Fees, Costs, and Service Awards, ¶¶ 4-8.) The Court finds the incentive awards are warranted and they are approved.

The Court also has an independent right and responsibility to review the requested attorneys’ fees and only award so much as it determines reasonable. (See Garabedian v. Los Angeles Cellular Telephone Co. (2004) 118 Cal.App.4th 123, 127-128.) Plaintiffs’ counsel requests attorneys’ fees in the amount of $705,000 (1/3 of the total settlement amount). Plaintiffs’ counsel provides evidence demonstrating a lodestar of $1,389,509, which results in a negative multiplier. Therefore, the attorneys’ fees are reasonable and they are approved.

Plaintiffs request $28,254.21 for actual incurred costs. The requested costs are approved.

The motion for final approval of class action settlement is GRANTED, subject to information regarding the treatment of late-filed claims.

The Court will prepare the final order and judgment if this tentative ruling is not contested.

The Court will set a compliance hearing for September 4, 2020 at 10:00 A.M. in Department 3. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein, the number and value of any uncashed checks, amounts remitted to Defendant, the status of any unresolved issues, and any other matters appropriate to bring to the Court’s attention. Counsel may appear at the compliance hearing telephonically.