Antitrust Law Daily Wrap Up, ADVERTISING—D. N.H.: $2M settlement of consumer claims over Softsoap Antibacterial gets final approval, (Nov 17, 2015)

By Linda O’Brien, J.D., LL.M.

The federal district court in Concord, New Hampshire has given final approval to a $2 million settlement resolving false and misleading marketing claims against consumer products manufacturer Colgate-Palmolive over its “Softsoap Antibacterial” hand soap (In re Colgate-Palmolive Softsoap Antibacterial Hand Soap Marketing and Sales Practices Litigation, November 16, 2015, Barbadoro, P.).

Background. Consumer products company Colgate-Palmolive manufactures the liquid hand soap “Softsoap Antibacterial,” which has triclosan as the active ingredient. In 1994, the Food and Drug Administration (FDA) announced that there was insufficient data to determine whether triclosan was safe and effective for use in consumer products. Several scientific studies over the last 15 years raised concerns regarding triclosan’s safety and efficacy.

In 2011, consumers filed a series of class action suits under state consumer protection laws against Colgate, alleging that the company made false and misleading marketing claims regarding Softsoap Antibacterial, implying that antibacterial soaps with triclosan were more effective than nontriclosan hand soaps or regular soap and water. The consumers also alleged that scientific studies showed that repeated use of triclosan hand soap can produce bacteria that are resistant to the chemical.

In April 2013, the court denied the defendant’s motion to dismiss. In June 2015, the court granted preliminary approval of a proposed settlement. A fairness hearing was held in September 2015. The plaintiffs then moved for final approval of the settlement and certification of the proposed class.

For purposes of the settlement, the court certified a class of persons who purchased the product in the United States from January 1, 1992, through the notice date.

Settlement. Under the terms of the settlement, Colgate will pay the amount of $2 million to satisfy the costs of the notice plan, award of attorneys’ fees and costs, and incentive awards to five class representatives. Any remaining amount will be paid to the Children’s Health Fund. Colgate also agrees to use triclosan in Softsoap Antibacterial only in a manner consistent with FDA regulations and not to use several allegedly misleading marketing statements for a period of five years or until applicable law changes.

The court found that the plaintiffs satisfied the prerequisites for class certification under Federal Rule of Civil Procedure 23(a). First, it can be reasonably inferred that the class is so numerous that joinder would be impracticable, since Colgate marketed Softsoap Antibacterial to millions of consumers across the United States during the relevant period. Second, class claims that Colgate’s marketing strategy was false, deceptive, and misleading are questions of law or fact common to the class. Third, the claims of the class representatives were typical of the claims of the class. Fourth, the class representatives will fairly and adequately protect the interests of the class.

The plaintiffs showed that the proposed class fell within the one of elements of Rule 23(b), according to the court. Here, the proposed settlement provides indivisible injunctive relief that benefits all class members by enjoining Colgate from using several marketing statements or reintroducing a triclosan-based Softsoap Antibacterial in a manner inconsistent with FDA regulations.

Additionally, the court determined that the proposed settlement was fair, reasonable, and adequate under Federal Rule of Civil Procedure 23(e). The proposed settlement provides a benefit equal to, or greater than, what class members would likely achieve through continued litigation. The class has secured significant benefit after years of arms-length negotiations. Also, it is unlikely that the class would achieve a better outcome in light of the uncertainties of continued litigation.

The parties engaged in extensive factual discovery and had adequate information about their respective litigation positions. Furthermore, the parties’ counsel was experienced in consumer class action litigation and was extremely knowledgeable about the facts and issues of the case.

Finally, the four objections to the proposed settlement were rejected by the court as unpersuasive.

The case is No. 12-md-2320-PB.

Attorneys: Adam J. Levitt (Grant & Eisenhofer, PA) for Kristina Pearson. Margaret Caruso (Quinn Emanuel Urquhart & Sullivan LLP) for Colgate-Palmolive Co.

Companies: Colgate-Palmolive Company

Cases: Advertising NewHampshireNews