1991 Law Suit Between Three Of The Most Popular "Grocery Brands"

Garner v. Healy (Turtlewax)

STIPULATION OF SETTLEMENT

This Stipulation of Settlement, dated as of March __, 2001, is made and entered into by the parties to the above-captioned action (the "Action") and their counsel of record, subject to the approval of the Court.

RECITALS

WHEREAS:

A. Defendant, TURTLE WAX, INC. ("Turtle Wax"), is an Illinois corporation with its principal place of business located at 5655 West 73rd Street, Chicago, IL 60638. Turtle Wax manufactures, markets and sells various car wash wax products for use in automated car washes, including, but not limited to, Polish Wax, Cherry Polish Wax, Sealer Wax, Super Foaming Sealer Wax, Poly Sealant and Poly Shell Triple Shine (Red, Blue and Gold). Defendants Denis J. Healy, Sondra Hirsch Healy and Matthew Broderick are officers and/or directors of Turtle Wax.

B. Defendant BLUE CORAL, INC., now known as BLUE CORAL/ SLICK 50, INC. ("Blue Coral"), is a Delaware corporation with its principal place of business located at 5700 South Lee Road, Maple Heights, Ohio 44137. Blue Coral and/or its affiliated company BLUE CORAL SYSTEMS (also included herein as part of "Blue Coral") formerly manufactured, marketed and sold various car wash wax products for use in automated car washes, including, but not limited to, Scented Poly Sealant, Sealer Wax, Polish Wax, Foamy Citrus Polish Wax and Clear Coat Protectant with AutoFom. ECOLAB INC., a non-party to this litigation, has purchased the Blue Coral automated car wash business, including product formulas and manufactures, markets and sells various car wash products for use in automated car washes, including but not limited to Scented Poly Sealant, Sealer Wax, Polish Wax, Foamy Citrus Polish Wax and Clear Coat Protectant with AutoFom. Defendants Sheldon G. Adelman, Michael Turk, Brian V. Sokol, and Pam Carestia are or were officers and/or directors of Blue Coral. Defendant Pam Carestia has been dismissed from the Action with prejudice.

C. Defendant SIMONIZ USA, INC., formerly known as Syndet Products, Inc. ("Simoniz") is a Connecticut corporation with its principal place of business located at 201 Boston Turnpike, Bolton, Connecticut 06043. Simoniz manufactures, markets and sells various car wash wax products for use in automated car washes, including, but not limited to, Simoniz Dri Brite, Spray Gloss Wax, Stripper Wax, Super Wax, TR Wax, Blue Diamond, Hy Syl, Orange Sealer Wax, Simoniz Poly Clear and Simoniz Poly Sealant. Defendant William M. Gorra is an officer and director of Simoniz.

D. Plaintiff John A. Garner is an individual residing in the State of Wisconsin, who claims to have purchased one or more of the Products manufactured by Turtle Wax, Blue Coral and Simoniz.

E. Plaintiff Steven G. Grant is an individual residing in the State of Illinois, who claims to have purchased one or more of the Products manufactured by Blue Coral.

F. On May 14, 1997, Plaintiffs Garner and Grant commenced the Action in the United States District Court for the Northern District of Illinois, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c) ("RICO"), various state consumer fraud statutes and breach of warranty. In their Amended Complaint in the Action dated October 1, 1997, Plaintiffs claim that the Products were wrongly advertised, marketed and sold by Defendants as "wax" because they did not contain any "carnauba wax" or any other naturally occurring "wax", and had "minimal value" as polishes or protectants for automobiles.

G. Plaintiffs Garner and Grant commenced the Action as a putative class action on behalf of themselves and other purchasers of the Products, pursuant to Rules 23(a), 23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure.

H. On January 5, 1999, the United States District Court certified three classes consisting of all persons in the United States who, on or after May14, 1993, purchased the Products manufactured, marketed and sold by Turtle Wax (Class A), Blue Coral (Class B) and Simoniz (Class C). Garner and Grant will hereinafter collectively be referred to as the "Class Representatives". Class A, Class B and Class C will hereinafter collectively be referred to as "the Classes" and the members of the Classes will collectively be referred to as "the Class Members".

I. Defendants specifically disclaim and deny any wrongdoing whatsoever, and assert that the claims alleged in the Amended Complaint have no merit in law or basis in fact. Specifically, Defendants believe that the Products are truthfully and non-deceptively labeled, advertised and marketed as "wax" and that the Products provide significant utility as polishes and protectants to automobiles. Defendants have denied all allegations of wrongdoing alleged in the Amended Complaint and have asserted affirmative defenses to plaintiffs' claims. Defendants, while continuing to deny all allegations of liability, also desire to settle, compromise and terminate plaintiffs' claims against them to avoid the further substantial expense, inconvenience and distraction of burdensome and protracted litigation, and to put to rest forever all claims which have or could have been asserted against Defendants in this Action or elsewhere, which arise from or are in any way related to the acts, transactions or occurrences alleged in the Amended Complaint.

J. Undersigned counsel for Plaintiffs and the Classes they represent ("Class Counsel") conducted an extensive investigation of the facts supporting plaintiffs' claims, both prior to commencement of the Action and during its pendency. This investigation has included, inter alia, (i) inspection and analysis of thousands of pages of documents produced by Defendants in response to requests for production of documents, (ii) research of the applicable law with respect to the claims asserted in the Amended Complaint and the potential defenses thereto, (iii) extensive discussions with counsel for Defendants regarding factual and legal matters relating to the claims asserted in the Complaint and the potential defenses thereto, (iv) consultation with experts with respect to the allegations of the Complaint, (v) extensive discovery of facts through depositions of various individual defendants in the Action; and (vi) depositions of expert witnesses offered by Defendants.

K. Class Counsel and counsel for Defendants engaged in extensive arms-length negotiations with respect to the settlement of claims made or which could have been asserted in the Action, leading to the negotiation and execution of this Stipulation;

L. The Class Representatives and Class Counsel recognize the expense and protracted nature of continued proceedings necessary to prosecute this Action through trial and appeals. Class Counsel has also taken into account (i) the uncertain outcome and risk of any litigation, especially in complex actions such as this Action, as well as the difficulties and delays inherent in such litigation; (ii) the strengths (and weaknesses) of the specific claims asserted in the Amended Complaint and the defenses to such claims interposed by Defendants; (iii) the risk that the Action could be resolved against Plaintiffs and the Class on summary judgment and dismissed without any compensation to the Class Members; and (iv) the fact that the proposed Settlement accomplishes one of the objectives of the litigation, which is to notify purchasers of the Products that the Products, with minor exception, do not contain carnauba wax.

M. Class Counsel believe that the proposed Settlement set forth in this Stipulation confers substantial benefits upon each of the Classes and the Class Members. Class Counsel has therefore determined that the Settlement is fair, reasonable and adequate, and that the termination of this Action on the terms set forth herein is in the best interests of the Classes and the Class Members.

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Class Representatives, on behalf of themselves and the Class Members, and Defendants, by and through their duly authorized attorneys of record, that, subject to the approval of the Court, pursuant to Rules 23(b)(1), 23(b)(2), 23(c), and 23(e) of the Federal Rules of Civil Procedure, this Action and all claims that have been or could have been asserted therein shall be finally and fully compromised, settled, released and dismissed with prejudice upon and subject to the terms of this Stipulation, as follows:

I. DEFINITIONS

1.1 Class Representatives shall mean John A. Garner and Steven G. Grant, as identified in Recitals D and E.

1.2 Defendants shall refer collectively to all of the individuals and corporations identified in Recitals A, B and C, except for Pam Carestia, who has been dismissed from this Action with prejudice.

1.3 Products shall refer to the various car wash wax products for use in automated car washes manufactured, marketed and sold by Defendants, including but not limited to the products specifically identified by name in Recitals A, B, and C.

1.4 Class A shall mean all persons in the United States who, on or after May 14, 1993, purchased the Products manufactured, marketed and sold by Turtle Wax.

1.5 Class B shall mean all persons in the United States who, on or after May 14, 1993, purchased the Products manufactured, marketed and sold by Blue Coral and/or Ecolab Inc.

1.6 Class C shall mean all persons in the Unites States who, on or after May 14, 1993, purchased the Products manufactured, marketed and sold by Simoniz.

1.7 The Classes shall refer collectively to Classes A, B, and C as defined in Paragraphs 1.4-1.6 above.

1.8 Affiliated Persons shall mean:

a. agents, counsel, representatives, employees, owners, stockholders, officers, directors, advisors, consultants, parents, subsidiaries, independent contractors, family members and the successors, assignees and personal representatives of any Defendant, and
b. any operator of a car wash in the United States that has, at any time, offered for sale any of the Products to the public;
1.9 Final Approval shall refer to the entry of judgment by this Court in accordance with the terms herein, approving the Settlement and dismissing the Complaint in this action on the merits, with prejudice and without costs against the defendants.

II.TERMS OF THE SETTLEMENT

2.1 Defendants will make a settlement incentive payment to Garner in the total amount of $2,000, to be borne equally by Turtle Wax, Blue Coral and Simoniz.

2.2 Defendants will make a settlement incentive payment to Grant in the total amount of $2,000, to be borne equally by Turtle Wax, Blue Coral and Simoniz

2.3 Defendants (specifically defined to include Ecolab Inc., a non-party to this litigation) agree, for all Products that do not include carnauba wax as an ingredient, that all marketing materials, packaging and labeling to be prepared and distributed by Defendants after a reasonable time to exhaust existing inventory, but in no event longer than six (6) months from the Final Approval of the Settlement, will include a legend advising the purchaser that the Product does not contain any carnauba wax.

2.4 Turtle Wax, Blue Coral and Simoniz will distribute rebate coupons with a face value of $1.00, which can be redeemed for cash, plus first class postage, by any person who purchases one of the Products from an automated car wash, attaches the sales receipt and coupon and submits both via United States Mail to a Coupon Redemption Firm to be selected by Defendants (the "Coupons"). Turtle Wax, Blue Coral and Simoniz will distribute the Coupons by publication in USA Today on the following dates: March 13, 2001 and March 22, 2001. All Coupons may be submitted for redemption immediately, but no redemption payments shall be made until Final Approval of this Settlement. The Coupons shall be valid and redeemable for sixty (60) days after Final Approval. The form of the Coupon is attached hereto as Exhibit A.

2.5 The settlement embodied in this Stipulation (the "Settlement") shall not become effective until Final Approval.

III. CLASS NOTICE

3.1 Promptly after execution of this Stipulation, the parties hereto shall submit the Stipulation to the Court and shall jointly apply for entry of an order (the "Notice Order"), which shall include provisions that, among other things, will:

a. Preliminarily approve the Settlement as fair and within the range of reasonableness so as to permit notice to the Classes;
b. Approve the form and content of the Notice for publication in USA Today, it being understood that the Coupons and the Notice may be published at the same time in the same manner;
c. Find that the publication of the Notice is due and sufficient notice of the pendency of this Action, this proposed Settlement, the date of the Settlement Hearing, the Fee and Expense Application and all other matters set forth in the Notice to the Class Members;
d. Schedule the Settlement Hearing to be held by the Court to consider and determine (i) whether the Settlement shall be approved as fair, reasonable and adequate; (ii) whether Final Approval should be given; and (iii) and whether the Fee and Expense Application of Class Counsel should be approved;
e. Provide that any Class Member who does not wish to be bound by this proposed Settlement to file a written request for exclusion with the Court at least twenty-one (21) days prior to the Settlement Hearing together with proof of mailing of copies thereof to Class Counsel at:

James O. Latturner, Esq.
Edelman, Combs & Latturner
120 South LaSalle Street, Suite 1800
Chicago, IL 60603

Proof of service upon the above named Class Counsel shall be filed with this Court at the time of filing any request for exclusion. Class Counsel shall forward copies of any requests for exclusion to :

Steven M. Greenspan, Esq., counsel for Simoniz
Day, Berry & Howard
City Place
Hartford, Connecticut 06103
J. Patrick Herald, Esq., counsel for Turtle Wax
Baker & McKenzie
One Prudential Plaza
130 East Randolph Drive
Chicago, IL 60601

John J. Arado, Esq., counsel for Blue Coral
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, IL 60606-1229

f. Provide that any Class Member who objects to approval of this Stipulation, or the fees and expenses of Class Counsel, or to Final Approval to be given pursuant to this Stipulation, may appear at the Settlement Hearing and show cause why the Settlement proposal herein should not be approved as fair, reasonable and adequate, why Final Approval should not be given in accordance with this Stipulation and/or why the Fee and Expense Application of Class Counsel should not be approved. Any Class Member who wishes to appear at the Settlement Hearing for the purpose of objecting to the approval of the Settlement proposed herein, or to the Fee and Expense Application of Class Counsel, shall submit any such objection in writing, which together with any memorandum in support thereof shall be filed with the Court at least twenty-one (21) days prior to the hearing set by the Court, together with proof of mailing of copies thereof to Class Counsel at:

James O. Latturner, Esq.
Edelman, Combs & Latturner
120 South LaSalle Street, Suite 1800
Chicago, IL 60603
Proof of service upon the above named Class Counsel shall be filed with this Court at the time of filing any objection. Class Counsel shall forward copies of any written objections to :



Steven M. Greenspan, Esq., counsel for Simoniz
Day, Berry & Howard
City Place
Hartford, Connecticut 06103
J. Patrick Herald, Esq., counsel for Turtle Wax
Baker & McKenzie
One Prudential Plaza
130 East Randolph Drive
Chicago, IL 60601

John J. Arado, Esq., counsel for Blue Coral
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive
Chicago, IL 60606-1229

g. Provide that, unless the Court otherwise directs, no Class Member shall be entitled in any way to contest the approval of the Stipulation or Final Approval given pursuant thereto, except by serving and filing written objections in accordance with subparagraph (f) above, and that any Class Member who fails to object in the manner prescribed shall be deemed to have waived and shall be foreclosed forever from raising such objections

h. Provide that pending final determination of whether the Settlement should be approved, Garner and Grant either directly, in a representative capacity, or in any other capacity, shall not commence, maintain, or prosecute any other action or proceeding in any court or tribunal against any Defendant or Affiliated Person asserting any of the Released Claims;

i. Provide that, as of the date of Final Approval, all Class Members shall be barred from asserting any Released Claims, and each such Class Member shall be conclusively deemed to have Released Defendants and their Affiliated Persons from any and all such Released Claims;

j. Provide that the Settlement Hearing may, from time to time, and without further notice to the Class (other than to any Class Member who has filed an objection as provided above or otherwise appeared in the Action), be continued or adjourned by Order of the Court.

3.2 The parties hereto shall jointly request that, no less than thirty (30) days after the Notice is published, the Court hold a Settlement Hearing to determine whether (i) the Settlement is fair, reasonable and adequate, and (ii) Final Approval should be given. At the Settlement Hearing, Class Counsel also will request that the Court approve the Fee and Expense Application.

IV. FINAL APPROVAL

4.1 At the Settlement Hearing, the parties shall request that the Court grant Final Approval of the Settlement. The parties shall request the Court to:

a. finally approve the Settlement of the Action in accordance with the Stipulation, find that the Settlement is in all respects fair, reasonable and adequate to the Class, and direct implementation of all its terms and provisions;
b. enter a final judgment dismissing all claims in the Action with prejudice;, Class Counsel shall apply to the court for entry of final judgment.
c. provide that upon the delivery of the Settlement Payments to the Class Representatives as set forth in Sections 2.1 and 2.2 above, payment of the Class Counsel Fees, and issuance of the Coupons, the release provided for in this Stipulation of Settlement shall become effective and that the Action and all causes of action therein will be dismissed on the merits and with prejudice, without costs to any party;
d. without affecting the finality of the Final Approval in any way, retain jurisdiction over the Action to the extent necessary to: (a) implement this Settlement; (b) enforce this Stipulation; (c) take any other action necessary to conclude this Settlement and to implement this Stipulation; (d) bar relitigation of Released Claims against Defendants and Affiliated Persons; and
e. provide that neither the Final Approval nor this Stipulation nor the fact of the Settlement (a) is an admission or concession by Defendants or their Affiliated Persons of any fault, omission, liability or wrongdoing; (b) is a finding of the validity or invalidity of any the claims asserted in the Action or of any wrongdoing by the Defendants or any of their Affiliated Persons; (c) shall be used as an admission of any fault, liability or wrongdoing by any Defendant or Affiliated Person ; or (d) shall be offered or received in evidence as an admission, concession, presumption or inference against any Defendant or Affiliated Person in any proceeding other than such proceedings as may be necessary to consummate or enforce this Stipulation or the provisions of any related order, notice, agreement or release, or to support a defense of res judicata, collateral estoppel, release, or other theory of claim or issue preclusion or similar defense.

V. PAYMENT OF CLASS COUNSEL'S ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES

5.1 At the Settlement Hearing, Class Counsel will submit an application (the "Fee and Expense Application") for an award of attorneys' fees and reimbursement of all expenses and costs, including the fees of any experts and consultants incurred in connection with prosecuting the Action, in the total amount of $220,000. Class Counsel's attorneys' fees and expenses, if approved by the Court, shall be borne equally by Turtle Wax, Blue Coral and Simoniz and shall be payable immediately on the Effective Date.

5.2 Defendants shall support the Fee and Expense Application.

5.3 This Settlement shall be binding and enforceable if otherwise approved by the Court, notwithstanding any limitation imposed by the Court on Class Counsel's fees and/or expenses.

VI. CONSEQUENCE OF COURT'S FAILURE TO
APPROVE THE SETTLEMENT

6.1 If the Settlement is not approved, then this Stipulation shall be cancelled and terminated and the parties shall be restored to their status quo ante as of the execution of this Stipulation. In such event, the terms and provisions of the Stipulation, with the exception of this Article and paragraph 8.2 hereof, and all papers submitted to the Court seeking its approval, shall have no further force and effect and shall be deemed null and void and shall not be cited or relied upon or received as evidence or as an admission by any person, in this Action or in any other proceeding, for any purpose, and all findings and determinations made pursuant hereto shall be null and void. Any Order entered by the Court in accordance with the terms of the Stipulation shall be deemed vacated.

VII. RELEASE OF DEFENDANTS

7.1 Upon the entry of Final Approval, each Class Member, with the exception of those who filed timely requests for exclusion under Paragraph 3.1(e), on behalf of themselves, their representatives, their heirs, their executors and administrators, their beneficiaries, successors, assigns, employees and agents, to the extent any such person may be acting on behalf of plaintiffs or a Class Member or the Classes (or any one of the Classes) with respect to this Action, do hereby forever release, remise, acquit and discharge the Defendants (specifically defined to include Ecolab Inc., a non-party to this litigation) and their Affiliated Persons (the "Released Parties") from all claims, rights, demands, liabilities, damages, equitable relief, costs, fees or expenses of any kind whether known or unknown arising out of or in any way related to any claims, causes of action or allegations, whether asserted under federal or state statutory or common law, which were or could have been asserted on their behalf in the Action ("the Released Claims") relating to or concerning the sale of the Products.

VIII. MISCELLANEOUS PROVISIONS

8.1 The parties hereto (a) acknowledge that it is their intent to consummate this Agreement; and (b) agree to cooperate to the extent necessary to effectuate and implement all terms and condition of the Stipulation. Both sides shall support, recommend, and affirmatively advocate approval of this Stipulation by the Court and by the Class Members.

8.2 Neither the Final Approval nor this Stipulation nor the fact of the Settlement (a) is an admission or concession by Defendants or their Affiliated Persons of any fault, omission, liability or wrongdoing; (b) is a finding of the validity or invalidity of any of the claims asserted in the Action or of any wrongdoing by the Defendants or any of their Affiliated Persons; (c) shall be used as an admission of any fault, liability or wrongdoing by any Defendant or Affiliated Person ; or (d) shall be offered or received in evidence as an admission, concession, presumption or inference against any Defendant or Affiliated Person in any proceeding other than such proceedings as may be necessary to consummate or enforce this Stipulation or the provisions of any related order, notice, agreement or release, or to support a defense of res judicata, collateral estoppel, release, or other theory of claim or issue preclusion or similar defense.

8.3 The Stipulation constitutes the entire agreement among the parties hereto and no representations, warranties or inducements have been made to any person in connection with this Stipulation, other than as set forth in this Stipulation. This Stipulation may be amended or modified only by a written instrument signed by or on behalf of counsel of record for all parties.

8.4 All costs associated with publishing the Coupons and the Notice, shall be borne equally by the Turtle Wax, Blue Coral and Simoniz.

8.5 Each counsel executing the Stipulation on behalf of any party hereto hereby warrants that such counsel has the full authority to do so (subject to, in the case of Class Counsel, approval by the Court).

8.6 This Stipulation may be executed in one or more original or telecopied counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. Counsel for the parties to the Stipulation shall exchange among themselves original signed counterparts and a complete set of original executed counterparts shall be filed with the Court.

8.7 The rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal substantive laws of the State of Illinois.

8.8 The waiver by any party of any breach of this Stipulation shall not be deemed or construed as a waiver of any other breach, whether prior, subsequent, or contemporaneous, of this Stipulation.

8.9 This Stipulation shall be binding upon, and inure to the benefit of, the successors, assigns and heirs of the parties hereto, including each of the Class Members.

8.10 Any notice given under this Stipulation shall be in writing and manually signed by the party giving the notice. All notices given under this Stipulation shall be transmitted by first class mail to the parties c/o their respective counsel at their respective addresses set forth in paragraph 3.1 (or at such other address as a party may specify by notice to the other). A copy of any notice given, other than a request for exclusion under Paragraph 3.1(e) or objection to approval of the Stipulation under Paragraph 3.1(f), shall be sent by fax on the same day that the notice is mailed and notice shall be considered effective on the day that it is transmitted by fax.

8.11 Following entry of Final Judgment, the Court shall retain continuing jurisdiction over any matters which may remain to be resolved.

IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed, by their duly authorized attorneys, as of the __th day of March, 2001.