Pearson v. NBTY

Dist. Ct. erred in approving settlement of class action that challenged defendant’s marketing of glucosamine pills that were designed to assist people with their bone/joint disorders, where settlement required defendant to pay $5.63 million, with $1.93 million of said figure going to class counsel, but only $865,284 going to class members. Fees awarded to class counsel were excessive, where it represented 69 percent of total going to class counsel and class members. Moreover, record showed that notice of lawsuit going to potential 4.72 million class members actually discouraged said members from filing claim. Dist. Ct. also erred in approving: (1) $1.13 million of settlement figure as cy pres award to non-class member entity, where there was no showing that it was not feasible to provide compensation to consumers of defendant’s glucosamine; and (2) reversion clause in settlement that transferred any court-ordered reduction in fees to defendant, as opposed to class members.