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In re Santa Fe Natural Tobacco Company Marketing & Sales Practices and Products Liability Litigation

United States District Court, D. New Mexico

August 31, 2018

IN RE SANTA FE NATURAL TOBACCO COMPANY MARKETING & SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION

          Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorneys for Plaintiffs Anthony Dunn, Ceyhan Haskal, Michael Robinson, Harry Vartanyan, Michael Yang, Doug Pyle, Nick Vadis, Theodore Rothman, Patrick Scott, Russell Brattain, Shannon White, CM. LeCompte, Danae Grandison, Michael Laboon, Dave Moyer Victoria Cuebas, Ashley Waldo, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Sam Bowman, Makotie Brim, Terry Cliver, Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Hornton, Colin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, Vicki Wilson, Timothy Ruggiero, Desire Gudmundson, Jacques-Rene Herbert, Sara Benson, Justin Sproule, Rudolph Miller, Carol Murphy, Francisco Chavez, Joshua Horne, Albert Lopez, Abigail Emmons, Charlene Blevins, Scott Johnston, Jason Cole, and Rachel King

          Scott P. Schlesinger Jonathan Gdanski Jeffrey Louis Haberman Schlesinger Law Offices, P.A. Fort Lauderdale, Florida Attorneys for Plaintiffs Justin Sproule, Patrick Scott, Victoria Cuebas, Steve Okstad, Michael Anderson, Brooke Balocca, Elijah Bent, Charlene Blevins, Sam Bowman, Matokie Brim, Terry Cliver, Christos Christolow, George Coon, Gary Cruse, Margie Harris, Charles Honse, Clinton Horton, Collin Jass, Christopher Jensen, Shereen Keith, Kelly Keiser, Asher King, Marilyn Komarinski, Jodi Kumpula, Tom Kurtz, Richard Kusick, Mike Lair, Tracy Lee, Kathleen Lelli, Robert Litwin, Linda MacDonald-Lewis, Rudolph Miller, Richard Morelock, Deborah Orrtim Paulson, Richard Peavy, Concetta Schultz, Judy Sell, Harrison Thomas, Dani Weir, Tom Weir, Kyle Wiebe, and Vicki Wilson

          Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico --and-- Charles J. LaDuca Cuneo Gilbert & LaDuca, LLP Washington, DC --and-- Michael Robert Reese Reese LLP New York, New York --and-- Nicholas Koluncich Law Offices of Nicholas Koluncich, LLC Albuquerque, New Mexico --and-- Melissa Weiner Charles D Moore Halunen Law Minneapolis, Minnesota Attorneys for Plaintiff Anthony Dunn

          Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico --and-- John C. Bienvenu Bienvenu Law Office Santa Fe, New Mexico --and-- Mark H Donatelli Reed C. Bienvenu Rothstein Donatelli LLP Santa Fe, New Mexico --and-- Ronald Marron Law Offices of Ronald A. Marron San Diego, California Attorneys for Plaintiffs Ceyhan Haskal, Michael Robinson, Harry Vartanyan, Michael Yang, Doug Pyle, and Nick Vadis

          Charles S. Zimmerman Zimmerman Reed Scottsdale, Arizona --and-- Caleb Marker Zimmerman Reed Manhattan Beach, California --and-- Nancy Ruth Long Long Komer & Associates, P.A. Santa Fe, New Mexico --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorneys for Plaintiffs Theodore Rothman and C.M. LeCompte

          Charles S. Zimmerman Zimmerman Reed Scottsdale, Arizona --and-- Caleb Marker Zimmerman Reed Manhattan Beach, California --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorneys for Plaintiffs Jacques-Rene Herbert, Sara Benson, Carol Murphy, Francisco Chavez, Abigail Emmons, and Joshua Horne

          Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico --and-- Douglas Gregory Blankinship Finkelstein Blankinship, Frei-Pearson & Garber, LLP White Plains, New York --and-- Kim Eleazer Richman Richman Law Group Brooklyn, New York Attorney for Theodore Rothman

          Kim Eleazer Richman Richman Law Group Brooklyn, New York --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Danae Grandison, Michael Laboon, and Dave Moyer

          Benjamin Michael Lopatin Eggnatz, Lopatin, & Pascucci, LLP San Francisco, California --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiff Russell Brattain

          Daniel L. Warshaw Alexander R. Safyan Pearson, Simon & Warshaw, LLP Sherman Oaks, California --and-- Erika E Anderson Law Offices of Erika E. Anderson Albuquerque, New Mexico --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorneys for Plaintiff Shannon White

          Gretchen Mary Elsner Elsner Law & Policy, LLC Santa Fe, New Mexico --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiffs Danae Grandison, Michael Laboon, and Dave Moyer

          John Allen Yanchunis, Sr. Marisa Kendra Glassman Morgan & Morgan, PA Tampa, Florida --and-- Scott W. Weinstein Morgan & Morgan, PA Fort Myers, Florida --and-- Keith R. Mitnik Morgan & Morgan, PA Orlando, Florida --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorneys for Plaintiff Ashley Waldo

          Steven William Teppler Abbott Law Group, P.A. Jacksonville, Florida --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiff Timothy Ruggiero

          John Russell Bart Pate J.R. Pate, PC - Law Office St Thomas, Virgin Island --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiff Desire Gudmundson

          Matthew David Schultz Levin Papantonio Thomas P.A. Pensacola, Florida --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Plaintiff Scott Johnston

          Joel R. Rhine Rhine Law Firm, P.C. Wilmington, North Carolina --and-- Randi McGinn Kathleen J. Love McGinn, Carpenter, Montoya & Love, PA Albuquerque, New Mexico Attorney for Jason Cole and Rachael King

          Chad C. Messier Dudley Topper & Feuerzeig St. Thomas, United States Virgin Islands --and-- Andrew G. Schultz Rodey Dickason Sloan Akin & Robb, P.A. Albuquerque, New Mexico --and-- Peter J. Biersteker William D Coglianese Jon Gregory Heintz Jordan Von Bokern Noel J. Francisco Washington, DC Jones Day --and-- David B. Alden Joseph R Coburn Cleveland, Ohio Jones Day --and-- David M. Monde Michael Fraser Stoer Jennifer Bunting-Graden Atlanta, Georgia Jones Day --and-- Paul Courtney Huck, Jr. Miami, Florida Jones Day --and-- Sharyl Reisman Mark R. Seiden Charles R. A. Morse New York, New York Jones Day --and-- David Craig Kiernan San Francisco, California Jones Day --and-- Troy A. Fuhrman Tampa Florida Jones Day Attorneys for the Defendants

          MEMORANDUM OPINION AND ORDER [1]

         THIS MATTER comes before the Court on: (i) (XXXXX) (ii) (XXXXX); and (iii) the Motion to Withdraw as Counsel, filed January 3, 2018 (Doc. 148)(“Motion to Withdraw”). The Court held a status conference on November 21, 2017, and hearings on December 21, 2017, and January 16, 2018. (XXXXX); and (ii) whether the Court should grant Mr. Yanchunis' Motion to Withdraw as both Plaintiffs' counsel and co-lead counsel. (XXXXX).

         The Court will grant in part and deny in part, without prejudice, Mr. Yanchunis Motion to Withdraw for the time being. To the extent that he requests withdrawal as co-lead counsel, the Court grants that request. To the extent that he requests to withdraw from this proceeding entirely, the Court denies the Motion to Withdraw without prejudice, because Mr. Yanchunis has not yet submitted to the Court the Defendants' position on the Motion to Withdraw, as the Court ordered at the January Hearing. Consequently, the Court cannot ascertain whether the Motion to Withdraw is opposed or unopposed, so cannot tell whether Mr. Yanchunis has complied with the local rules. See D.N.M. LR-83.8(a)-(b). (XXXXX)

         FACTUAL BACKGROUND

         The Court briefly summarizes the factual background for context. A more thorough discussion may be found in its Memorandum Opinion and Order at 4-9, 288 F.Supp.3d 1087, 1128-32, filed December 21, 2017 (Doc. 146)(“MOO”). The Plaintiffs are consumers who have purchased Natural American Spirit cigarettes. See Consolidated Complaint ¶¶ 12-23, at 4-11, filed January 12, 2017, (Doc. 82)(“Complaint”). They contend that they bought those cigarettes at a price premium, because advertisements and branding, which describe the cigarettes as “Natural, ” “Additive-Free, ” and “Organic, ” led them to erroneously believe that Natural American cigarettes are safer and healthier than other cigarette brands. Complaint ¶¶ 4-6, at 2. See id. ¶¶ 12-23, at 4-11. The Plaintiffs also allege that the “Additive-Free” branding led them to think incorrectly that the Natural American menthol-variety cigarettes are additive-free.[2]Complaint ¶ 10, at 3. See id. ¶¶ 12-23, at 3-11.

         1. (XXXXX)

         PROCEDURAL BACKGROUND

         The Plaintiffs brought suit in several jurisdictions alleging a variety of consumer-protection and common-law claims premised on unlawful deception. See In re Santa Fe Nat. Tobacco Co. Mktg. & Sales Practices Litig., 178 F.Supp.3d 1377, 1378 (U.S. Jud. Pan. Mult. Lit. 2016)(“Transfer Order”). One Plaintiff moved for multidistrict litigation centralization under 28 U.S.C. § 1407. See Transfer Order, 178 F.Supp.3d at 1378. The Judicial Panel on Multidistrict Litigation concluded that the actions presented “involve common questions of fact, and that centralization will serve the convenience of the parties, ” and ordered consolidation. Transfer Order, 178 F.Supp.3d at 1378-79.

         On May 20, 2016, the Plaintiffs submitted the Plaintiffs' Leadership Petition, requesting that the Court appoint Mr. Schlesinger, Mr. Yanchunis, and Ms. Weiner[3] co-lead counsel. See Plaintiffs' Leadership Petition at 2-3. The Plaintiffs represented to the Court that, for four reasons, the co-lead counsel arrangement was best able to represent the proposed class' interest. See Plaintiffs' Leadership Petition at 4-7. First, all of the Plaintiffs' counsel agreed to the leadership structure, so, according to the Plaintiffs, the Court is obliged to approve the structure “based on the concept of ‘private ordering.'”[4] Plaintiffs' Leadership Petition at 4 (quoting Manual for Complex Litigation § 21.11 (4th ed. 2004)). Second, they contend that Mr. Schlesinger, Mr. Yanchunis, and Ms. Weiner combined are eminently qualified in both tobacco litigation and consumer-protection litigation -- both relevant practice areas for this lawsuit. See Plaintiffs' Leadership Petition at 5-11. Third, the Plaintiffs' counsel represent that they can work cooperatively together. See Plaintiffs' Leadership Petition at 6. Finally, they argue that the leadership structure will preserve class resources by eliminating duplicative work. See Plaintiffs' Leadership Petition at 7.

         The Court subsequently held a hearing on May 24, 2016. See Transcript of Scheduling Conference, taken May 24, 2016, filed June 1, 2016 (Doc. 34)(“May Tr.”). Mr. Yanchunis began by noting that the Court had asked the Plaintiffs to propose a leadership structure for this complex case, and, after meeting in person, the Plaintiffs' counsel had agreed to a “consensus structure” that combined the talent and experience of tobacco litigation lawyers and consumer class-action lawyers. May Tr. at 26:8-22 (Yanchunis). Accordingly, the Plaintiffs chose Mr. Schlesinger, Mr. Yanchunis, and Ms. Weiner as co-lead counsel; Mr. Schlesinger brought tobacco litigation experience, and Mr. Yanchunis and Ms. Weiner brought to bear their consumer class-action acumen. See May Tr. at 26:24-25 (Yanchunis); Plaintiffs Leadership Petition at 7-11. Mr. Yanchunis then explained that their leadership agreement had methodically mapped out each firm's responsibilities to match that firm's experience in an effort to conserve class resources. See May Tr. at 28:4-16 (Yanchunis). For example, the Plaintiffs had divided up “client vetting, research trial experts, [and] discovery” between the firms “so that there's not overlapping of work.” May Tr. at 28:8-11 (Yanchunis).

         The Court expressed some concern with appointing co-lead counsel. See May Tr. at 29:7-8 (Court). It asked Mr. Yanchunis whether he had ever worked on a case with that number of co-leads. See May Tr. at 29:7-8 (Court). Mr. Yanchunis had worked with co-leads before see May Tr. at 29:9-14 (Yanchunis) and noted that, although he had never worked with Mr. Schlesinger or Ms. Weiner before this case, “in our time up until now, I can work with [both of them], ” May Tr. at 30:13-14 (Yanchunis). The Court asked whether there was any downside to three co-leads, as opposed to just one lead, and Mr. Yanchunis said he could think of none. See May Tr. at 29:21-23 (Court, Yanchunis). He added that, in terms of billing, “on the plaintiffs' side of a class case, we work not based upon the hour, ” but upon the result; “[w]e do not get paid for our labor unless we are successful.” May Tr. at 42:22-25 (Yanchunis).

         Mr. Schlesinger agreed with Mr. Yanchunis' representations. See May Tr. at 43:18-19 (Schlesinger). He noted that he “really encouraged those that came from the consumer class action side to join.” May Tr. at 44:3-4. Mr. Schlesinger reasoned that tobacco companies' defense counsels typically have tremendous manpower at their disposal, and he thought that his tobacco-litigation firm could better match the Defendants' wealth of resources by joining forces with consumer class-action firms. See May Tr. at 44: 5-14 (Schlesinger). He concluded that “I don't see any reason why myself, John, and Melissa would ever disagree and put out separate ideas about how to proceed.” May Tr. at 44:20-22 (Schlesinger).

         The Defendants took no official position on the leadership structure, but conveyed concern that co-lead counsel would produce inefficiencies by duplicating efforts. See May Tr. at 32:23-33:3 (Monde). The Defendants noted, however, that it had not been difficult so far to negotiate with three co-lead Plaintiffs' counsel. See May Tr. at 33:23-24 (Monde). The Court subsequently granted the Plaintiffs' Leadership Petition and appointed Mr. Schlesinger, Mr. Yanchunis, and Ms. Weiner co-lead counsel. See Order Granting Joint Application for ...


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