There is a public perception that class actions result in multimillion-dollar liability for the defendants. The recent settlement of Woodard v. Labrada, a case in which TV’s Dr. Mehmet Oz was originally named as a defendant, shows that is not always the case. The suit alleged misrepresentations regarding certain weight-loss supplements manufactured by Labrada Bodybuilding Nutrition, Inc., which the plaintiffs claimed Dr. Oz received compensation to promote on his TV show. After six years of litigation, Labrada — the only remaining defendant (the plaintiffs dismissed the allegations against Dr. Oz and other media defendants) — agreed to a settlement that requires the payment of just $625,000.
In 2018, the judge denied a motion for preliminary approval of a $5.25 million settlement. The claims against Dr. Oz and other media defendants were subsequently dismissed with prejudice in 2020. And in 2021, the court certified two classes of people in California who purchased Labrada Green Coffee Bean Extract Product and Labrada Garcinia Cambogia Product.
The judge has granted preliminary approval of the $625,000 settlement. In addition to the monetary payment, the current proposed settlement also requires Labrada to cease selling the Labrada Green Coffee Bean Extract Product and Labrada Garcinia Cambogia Product. Unlike the rejected 2018 settlement, the current settlement is limited to California residents.
The preliminary approval order notes that the plaintiff “acknowledges the hurdles she would need to overcome to succeed on the merits of her case,” such as “determining whether the products at issue were actually ineffective.” Those hurdles can help justify a lower monetary component to a class-action settlement and explain why not every class action should result in a million-dollar payment.