Class Actions Brief Blog

Limiting exposure to future claims is a crucial aspect of settling class action litigation. A recent opinion out of the Northern District of Georgia serves as a reminder that the definitions of settlement classes and released claims in class action settlement agreements warrant close attention.

First, the background. In 2015, a customer filed a putative class action against LGE Community Credit Union, alleging that LGE improperly assessed overdraft fees based on accounts’ available balances instead of customers’ ledger balances, in violation of LGE’s standard member ...

Earlier this year, the Fourth Circuit published an updated roadmap for addressing objections to class settlement. The decision, 1988 Trust for Allen Children Dated 8/8/88 v. Banner Life Insurance Co., 28 F.4th 513 (4th Cir. 2022), will be an important resource for parties hoping to bypass objections en route to settlement. It will also be an important guidepost for class members pursuing objections with hopes of slowing down settlement traffic.

Allen Trust clarifies—for the first time in the Fourth Circuit—the burden of proof that applies when a class member objects to ...

While Roundup herbicide may be able to kill unwanted weeds, Monsanto, the maker of Roundup, is having a much harder time weeding out unwanted lawsuits. Recent cases alleging Roundup caused cancer have resulted in verdicts of tens of millions of dollars per plaintiff. Now Monsanto’s attempt to round up future claims into a class action settlement is coming under renewed scrutiny.

The Roundup Multi-District Litigation (“MDL”)
In 2015, the World Health Organization designated the active ingredient in Roundup as probably carcinogenic. Since then—and despite the U.S ...

Last year in this space, we reported on the continuing debate concerning the use of cy pres awards in class action settlements.  Since 2013, Chief Justice Roberts has provided cautionary comments about this practice.  See Marek v. Lane, 134 S. Ct. 8 (2013).  We also reported on the Ninth Circuit’s approval of a cy pres settlement in In Re Google Referrer Header Privacy Litigat., 869 F.3d 737 (9th Cir. 2017), which awarded plaintiffs’ counsel $3.5 million and six nonprofits/educational institutions another $5.3 million, all while awarding class members the proverbial goose egg.

We often report in our monthly digests on cases asserting claims under the federal Fair Labor Standards Act (FLSA) and state wage and hour laws. These cases generally involve claims that a company, often a restaurant or delivery service company, failed to pay overtime, used an improper “tip pool,” or treated workers as independent contractors, not employees. Resolving these cases can become complicated because they involve both a collective action and a class action.

Claims asserted under the FLSA are considered collective actions, not class actions. Collective actions ...

Those who follow class action law probably will be familiar with In re Trulia (2016), the seminal decision of the Delaware Court of Chancery that put the brakes on disclosure-only settlements.  Before Trulia, these controversial settlements were ubiquitous in deal litigation, in which shareholders of a company file a class action lawsuit seeking to stop the company from engaging in a merger or acquisition on the ground the company failed to disclose sufficient information about the transaction.  Under a typical disclosure-only settlement, the company agrees to supplement its ...

A good while ago, we reported in this space, about so-called “cy pres” settlements. We highlighted the Chief Justice’s cautionary comments about this practice – under which third parties, not class members, are compensated by defendants. See Marek v. Lane, 134 S.Ct. 8 (2013). After the Ninth Circuit recently approved a cy pres settlement, In Re Google Referrer Header Privacy Litigat., 869 F.3d 737 (9th Cir. 2017), which awarded plaintiffs’ counsel $3.5 million, and six nonprofits/educational institutions another $5.3 million – all while awarding class members the ...

For what appears to have been a frivolous lawsuit, In re: Subway Footlong Sandwich Marketing and Sales Practices Litigation generated an interesting opinion from the Seventh Circuit full of class-action issues. The case originated when an Australian teenager posted a photo of an 11-inch Subway sandwich, with a tape measure, on his Facebook page. Coming in the midst of Subway’s $5 Footlongs^TM campaign, the picture went viral, and class-action cases were soon pending.

After early discovery showed that most “footlongs” were, in fact, 12 inches long, plaintiffs’ counsel ...

Today we continue our analysis of Judge Gorsuch’s class action opinions from the Tenth Circuit in an effort to better understand how he may rule if confirmed for the Supreme Court. Last week, we examined Judge Gorsuch’s decision in Shook v. Board of County Commissioners, and we will take up his remaining class action opinions below.

McClendon v. City of Albuquerque, 630 F.3d 1288 (10th Cir. 2011)

In McClendon v. City of Albuquerque, decided three years after Shook, Judge Gorsuch again demonstrates judicial restraint. In McClendon, prisoners brought a class action against the ...

We have previously commented about “disclosure only” settlements in class action merger cases, and the increasing scrutiny provided to them by courts here and in Delaware. Judge Bledsoe entered the fray yesterday, approving a settlement of litigation involving the merger of Yadkin Financial Corporation and NewBridge Bancorp in a 44-page order. In a stark preamble to his findings, Judge Bledsoe gave warning that the Business Court would likely be joining their brethren in Delaware in strictly reviewing such settlements in the future. The Court characterized such a shift as a ...

Last month, we previewed the challenge to a settlement of litigation involving the Reynolds-Lorillard merger. The Business Court has helpfully made available the transcript of the hearing on approval of the settlement, which took place on February 12. At the hearing, the Court made clear that it was quite familiar with recent changes in merger litigation in Delaware, including the Trulia case, and stated that it was reviewing the settlement under “strict scrutiny,” not a “rubber stamp standard.” Notwithstanding a shareholder objection supported by Professor Sean ...

When two public companies announce an intention to merge, class litigation follows like the night the day. These complaints usually request some sort of preliminary injunctive relief which, if successful, can derail the merger. Rarely, however, do plaintiffs press for this relief. Instead, they opt to resolve the claims, which requires court approval under Rule 23. The resolution can involve the payment of money to shareholders, but many times it does not and instead takes the form of “programmatic relief,” consisting principally of additional disclosures to the class ...

Since the Supreme Court’s decision in Wal-Mart, courts have been struggling to breathe life into Rule 23(b)(2) when monetary damages are a possibility. Wal-Mart held that back pay constituted the kind of individualized monetary relief that was hardly “incidental” to claims of injunctive relief, upon which (b)(2) classes are essentially founded. In Berry v. LexisNexis Risk and Information Analytics Group Inc., No. 14-2006 (4th Cir. Dec. 4, 2015), the Fourth Circuit grappled with this issue, albeit in the context of a nonmonetary (b)(2) settlement that, by its terms, continued to allow class members to pursue certain claims for monetary relief.

Can a class action settlement agreement contain a fee-shifting provision that provides for a payment of attorneys’ fees? In a question of first impression, the North Carolina Court of Appeals said yes, subject to a trial court’s approval of the settlement at a fairness hearing.

In the long-running Ehrenhaus v. Baker case, the Plaintiff brought a class action challenging the merger of Wells Fargo and Wachovia. The parties ultimately entered into a settlement agreement that also provided for a payment of attorneys’ fees to Plaintiff’s counsel. The trial court approved the ...

The North Carolina Business Court has seemed to settle upon a methodology in approving “disclosure only” settlements in merger cases. Following Judge Gale’s decision in In re Harris Teeter Merger Litigation, Judge Bledsoe certified a non-opt-out settlement class last week in In re PokerTek Merger Litigation, No. 14-CVS-105679 (Jan. 22, 2015), observing that such classes have become the norm both in Business Court and in Delaware. The key to such certification, as Judge Bledsoe observed, was that the case involve predominantly “equitable claims,” rather than claims ...

The Second Circuit has observed that “[t]he [trial] judge [in a class action] should not regard himself as an umpire in typical adversary litigation. He sits also as a guardian for class members who have not received a notice or who lack the intellectual or financial resources to press objections.” Weinberger v. Kendrick, 698 F.2d 61, 69 n.10 (2d Cir. 1982). And this role is transparently on display when it comes to approving settlements, which is the court’s responsibility under Rule 23(e). Recent decisions in other circuits emphasize, particularly after Wal-Mart, that a ...

Funds from a class action settlement are generally distributed to class members. But in some cases, not all funds are claimed. In others, it may not even be possible or practical to distribute any funds to individual class members. A “cy pres” distribution is one way of dealing with this issue. The concept comes from trust law and means “as near as possible.” The goal of a cy pres settlement is to distribute funds in a way that indirectly benefits the class members.

Last fall, the issue of “cy pres” settlements got some press when Chief Justice Robert issued a warning note about ...