SAN DIEGO – Pretrial motions are continuing in a class-action lawsuit against Similasan, a company that sells homeopathic products, after a federal court rejected a settlement that would have netted lawyers more than a half-million dollars.
No new settlement has been reached in the case known as Allen v. Similasan. following the California court's rejection based on a challenge by a non-profit advocacy group and eight state's attorneys general. Besides money for the lawyers, the settlement would have awarded $5,000 to be shared by two unnamed plaintiffs only. A website advertising the settlement has been removed.
The attorneys for the plaintiffs had filed a claim for $545,000, the majority of which was destined for San Diego lawyer Ronald Marron and his firm.
Swiss-headquartered Similasan, which manufactures and sells products promising relief from stress, anxiety, sleeplessness, ear wax, earache and nasal problems, agreed as part of the settlement to change its labeling and information posted on its website.
Anyone who purchased a Similasan product for household or personal use from Feb. 10, 2008, to July 1, 2016, was included in the settlement.
The company, which denies any wrongdoing, was sued for allegedly falsely marketing its homeopathic products as “Naturally Effective & Safe,” thus violating FDA regulations, and for breaching actual and expressed guarantees.
The Competitive Enterprise Institute, a non-profit public policy organization, led the objection battle over the settlement.
CEI objected to the settlement on behalf of a class member on July 1, taking issue with the $545,00 payday for class attorneys and no compensation for class members.
“Only the defendant and the class attorneys would have benefited under the proposed settlement,” Ted Frank, director of CEI’s Center for Class Action Fairness, said in a statement following the rejection of the settlement. “That’s why we objected, and it’s why eight state AGs supported our objection.”
Frank told the Northern California Record that pre-trial motions are continuing, but he does not know whether there is room for a fresh settlement.
Judge Cynthia Bashant, for the U.S. District Court for the Southern District of California, in her ruling rejecting the settlement, stated, "The named Plaintiffs will receive $2,500, well more than they spent on the offending products, Additionally, the proposed injunctive relief may only benefit a small number of the class members and instead seems to be more tailored to future purchasers.”
The deadline for objection to, or exclusion from, the settlement was July 1. Those who did not object were barred from suing about any claims in the case, those linked to the behavior of the company between the dates in the complaint.
The Competitive Enterprise Institute’s Center for Class Action Fairness arm filed an objection on behalf of an unnamed class action plaintiff.
“The settlement was structured so that the only benefits flowed to the lawyers, and the class got nothing for waiving its claims,” Frank, of CEI's Center for Class Action Fairness, told the Northern California Record.
Frank argued the attorneys should have argued for a class opt out.
"The lawsuit seemed legitimate because homeopathy is essentially a synonym for consumer fraud," Frank said. "Somehow these lawyers lost a jury trial on similar claims against another manufacturer, so perhaps they shouldn't be representing these sorts of plaintiffs.”
In his submission arguing for the fees, attorney Marron said the hours billed in this action are reasonable.
The fees “reflect the intensity with which issues were disputed in this case, and the amount of work necessary for this litigation to culminate in the successful resolution of injunctive relief on behalf of the class,” Marron wrote. "My firm originated this case and litigated it for approximately three years before retaining co-counsel. My firm has contributed a total of 2,018.7 hours to this litigation, including 1,709.1 attorney hours, 239.4 law clerk hours, and 70.2 legal assistant/paralegal hours.”
“The proposed settlement has been prepared using traditional homeopathic principles: not one molecule of relief exists for unnamed class members,” the CEI argued in its submission to the court.
The complaint alleges the defendant sold homeopathic products that are falsely or deceptively labeled in that the products do not work as advertised.
Similasan said its homeopathic products work effectively and have provided healthy relief to millions of people for more than 20 years.