Amending Rule 23 would add clarity to the settlement process and teeth to the protection of absent class members.  But to solve the real class settlement process, the Advisory Committee will have to look at why so many weak claims advance so far into litigation.

For the next few months, excepting my usual year-end posts, I am going to be taking a longer look at the various items on the Advisory Committee’s Study Agenda. And, in contrast to my usual stance in this blog, which tends to be “comment on the strategies, not the wisdom of the case,” I … Continue Reading

I don’t usually do guest posts–Class Action Countermeasures is largely a solo proprietorship–but Adam Schulman of the Center for Class Action Fairness spotted a new settlement tactic out in the wild that proved interesting enough to justify an exception. [Inevitable disclosure, since I have done some work for the Center, I have worked with Adam before.]  So, without further ado, Adam:

The Opt-Out Refund

As an attorney with the Center for Class Action Fairness, I spend a good deal of time evaluating prospective class action settlements for defciencies. (Disclaimer: I write this blog post only in my individual capacity, … Continue Reading

With one or two significant exceptions, I usually write about settlement tactics that don’t work. I do that for two reasons: (1) settlement tactics that work often lead to perfunctory opinions that do not discuss the tactics themselves, and (2) settlement is one of those areas where it’s better to know what to avoid.

This week, however, I’d like to focus in on a tactic that worked for the parties.

The Trans Union Corp Privacy Litigation–which involves allegations that the company violated the Fair Credit Reporting Act ("FCRA")–has been around in one form or another for 16 years, … Continue Reading

A brief one this week, involving a settlement that did not reach final approval. Dremak v. Iovate Health Sci. Group, Inc., No. 09md2087, 2013 U.S. Dist. LEXIS 165225 (S.D. Cal. Nov. 19, 2013) involved an attempted settlement of personal injury class and labeling class actions involving products with hydroxycut [http://en.wikipedia.org/wiki/Hydroxycut]. The proposed settlement involved $10 million in cash and $10 million in hydroxycut products. Any remaining cash after distribution would be distributed as "Additional Product."

The court was not impressed by the structure of the settlement.  As it stated:

The biggest problem with the proposed cy pres distribution in

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ExxonMobil recently attempted to settle a class action involving the payment of gas royalties. As part of that settlement, it agreed to a provision that would impose a severe appeal bond on any objectors who might wish to appeal an unsuccessful objection. The clause read:

Because any appeal by an objecting Class Member would delay the payment under the Settlement, each Class Member that appeals agrees to put up a cash bond to be set by the district court sufficient to reimburse Class Counsel’s appellate fees, Class Counsel’s expenses, and the lost interest to the Class caused by the delay

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 In the wake of Comcast Corp. v. Behrend, a number of different courts have weighed in on the question of whether variations in damages should preclude certification of a litigation class. Last month, however, the District of the District of Columbia issued an opinion which implied that variations in damages might preclude the certification of a settlement class.

The case is Richardson v. L’Oreal USA, Inc., 2013 U.S. Dist. LEXIS 158599 (D.D.C. Nov. 6, 2013).  And it’s another Center for Class Action Fairness case. (You can read Ted Frank’s original writeup of the case here, and let … Continue Reading

 Settlement opinions are often not that interesting. The vast majority of them are by-the-numbers approvals of proposed settlements that offer little insight about how Rule 23 works. This is especially true of preliminary approval opinions. But every once in a while, a court refuses even the preliminary approval of a settlement.  When that happens, class action lawyers can usually learn a few things about how not to settle a case.

Better v. YRC Worldwide Inc., No. 11-2072-KHV, 2013 U.S. Dist. LEXIS 163569 (D. Kan. Nov. 18, 2013), is such a case. It was a proposed settlement of a … Continue Reading

 Not right away, but it’s thrown down the gauntlet. In denying certiorari in Marek v Lane, Chief Justice Roberts took the time to issue an accompanying opinion. Marek v. Lane, No. 13-136, 2013 U.S. LEXIS 7772 (Nov. 4, 2013). In it, the Chief Justice takes the time to rehearse the facts behind the controverisal Facebook Beacon settlement. (In a nutshell: Facebook allegedly instituted an opt-out program that broadcast various commercial preferences of its members. The settlement cost Facebook $9 million; 25% went to the lawyers, roughly 75% went to create a new privacy-oriented foundation whose three-member board would … Continue Reading

 Many class settlement agreements contain confidentiality clauses. How seriously should we take them?

Thornton v. Morgan Stanley Smith Barney, LLC, No.12-CV-298-JED-FHM, 2013 U.S. Dist. LEXIS 151211 (N.D. Okla. Oct. 22, 2013), answers the question: seriously indeed.

Thornton itself was not a class action. It was a sex discrimination case. In Thornton, the defendant identified a number of female employees as witnesses that there had not been any sex-based discrimination in its Oklahoma offices. The plaintiff decided to challenge this story by subpoenaing records from the claims administrator for the settlement in Amochaev, a sex discrimination class action involving the … Continue Reading

A group of Hispanic and African-American borrowers sued the National City Bank, alleging that its "Discretionary Pricing Policy" for home mortgages had resulted in higher borrowing costs for racial minorities. During discovery, the parties engaged in a mediation and reached a $7 million settlement, which a trial court in the Eastern District of Pennsylvania preliminarily approved.

Between preliminary and final approval, however, the Supreme Court decided Wal-Mart Stores, Inc. v. Dukes, which held that a discretionary promotion policy could not support a finding of commonality. The trial court decided that the same reasoning would apply to a discretionary pricing … Continue Reading