Category Archives Class Settlement

The Eighth Circuit upheld a class settlement over the objections of six of the twenty-three class representatives.  The case involved a settlement among the NFL and nearly 25,000 former NFL players over the use of the players’ likenesses and identities, and it provided class members with two benefits: (1) the establishment and $42 million funding of the Common Good Entity, a non-profit organization charged with disbursing the money to charitable organizations or health and welfare organizations for the benefit of class members; and (2) the establishment of the Licensing Agency intended to assist class members with marketing their publicity rights.  Marshall et al. v. Nat’l Football League, No. 13-3581 (8th Cir. May 21, 2015). At the outset, the Court tackled the question of whether the settlement benefits were appropriate given constraints on certain cy pres distributions.  The Court emphasized that the Licensing Agency provided class members with a direct benefit,…

We have written a few posts about the challenges inherent in obtaining judicial approval of proposed class settlements here at the Missouri and Kansas Class Action Law Blog, and this latest order issued by Judge Kays denying a proposed hybrid wage-and-hour settlement outlines many of those concerns that counsel should be mindful of when negotiating and finalizing a proposed class settlement that will pass judicial scrutiny. (HT to our former colleague Eric Dirks who tipped us off about this order earlier this week - look for a guest post from him in the coming weeks). In Stewart v. USA Tank Sales and Erection Co., No. 12-05136-CV-SW-DGK, 2014 WL 836212 (W.D. Mo. March 4, 2014), the plaintiffs brought a seemingly straight-forward wage-and-hour claim, alleging that their employer failed to pay them overtime; the wrinkle being that it was a "hybrid" class where plaintiffs bring a claim under both the federal Fair Labor Standards Act…

Here's an interesting order from the District of Kansas that was published right before the Thanksgiving holiday that demonstrates how a proposed class settlement can get denied not once, but twice, if counsel does not adequately represent all members of the putative absent class. In Better v. YRC Worldwide, No. 11-2072-KHV, 2013 WL 6060952 (D. Kan. Nov. 18, 2013), the parties were before the court for a second time for preliminary approval of a securities class action settlement. While the court initially denied approval because plaintiffs failed to satisfy the Rule 23 requirements of typicality and adequacy, it appears the parties did not sufficiently address these deficiencies the second time around. Specifically, the court identified three areas where the parties failed to protect the interests of the putative class: First, approval was denied because the Court found that the proposed settlement failed to provide any benefit to certain class members while requiring…

Cy pres - A French term for "ok, close enough" - can be tricky. The wrong has been righted, but either the class has been fully compensated, or the compensation is too de minimis or impractical to allocate and distribute. What to do? Give it away to charity, but not just any charity. This issue confronted the Court in In re Bank of America Corp. Sec. Litig., 2013 WL 3212514 (E.D. Mo., June 24, 2013). In that securities fraud MDL, the global settlement of $490,000,000.00 had been approved, and all class members had been paid. Yet, due to problems locating class members, duplicate payments, restitution, and interest, class counsel found themselves with $2,734,136.69 remaining in the kitty. This was even after the claim administrator had been caught embezzling $5,000,000.00 from the fund. Not a bad problem to have, but a problem nonetheless. After rejecting the motion of the claims administrator…

Judge Vratil's order in Gambrell v. Weber Carpet, Inc., 2013 WL 1659591 (D. Kan. April 17, 2013), stands in stark contrast to the Missouri Supreme Court's recent analysis on class counsel fees. In this case, Judge Vratil ultimately approved an award of fees to class counsel in this FLSA settlement, but did so in a manner likely to haunt class counsel for years. The Court had overruled the parties' first motion to approve the proposed FLSA settlement because the parties had submitted it in camera. The Court overruled the second attempt at approval for failing to provide sufficient information needed to support the key findings (such as whether the proposed settlement was fair, reasonable and adequate). At this point, class counsel was undeterred by the Court's stated skepticism of their request for $40,375.00 in fees for a $14,000 settlement. The third attempt at approval failed for lack of supporting information…

In Berry v. Volkswagen Group of America, Inc., 2013 WL 1421604 (Mo., April 13, 2013), the Missouri Supreme Court affirmed an award of $6,174,640.00 in class counsel fees where the class recovered a grand total of $125,261.00. Because our firm submitted an amicus brief in this case, we will keep the report of this decision factual. That case involved an MMPA class settlement for allegedly defective window regulators, resulting in the settlement of a 22,304 member class eligible for payments of $75.00 each. But after notice was mailed out the class members, only 177 claims were made and only 130 paid. Class counsel submitted a bill for 7,910 hours billed at rates ranging from $200 for staff to between $252-$650/hour for counsel, calculated the lodestar at $3,087,320.00, and asked for a 2.6 multiplier. The trial court limited the multiplier to 2.0, resulting in $6,174,640.00 in fees, plus costs. Volkswagen appealed.…

What happens if parties negotiate a preliminary class-action settlement, but the case is subsequently transferred to an MDL for pretrial purposes under 28 U.S.C. § 1407? The short answer: the MDL court has power to facilitate a global settlement by enjoining one-off settlements of cases transferred to the MDL. Judge Lungstrum's order in MDL 2138 (In re Bank of America Wage and Hour Employment Litigation) provides an instructive lesson. The Lopez class action originated in California state court and was ultimately removed and transferred to the MDL.  Before transfer, the Lopez parties negotiated a preliminary class settlement.  After transfer, the MDL court granted a joint motion to stay the proceedings to allow MDL counsel to negotiate a global settlement.  The Lopez parties apparently didn't want any potential MDL settlement to interfere with their preliminary settlement.  Here are the relevant events: Dec 2007 - Lopez filed as class action in California…

The defendant in this case got an unpleasant valentine from Judge Kays when he granted the plaintiff class’s motion to enforce the class settlement, despite the Defendant’s assertion there was no settlement.  In July 2012 the parties had informed the Court that they had agreed to settle this putative FLSA class action and were working on finalizing the agreement.  For the next two months, Plaintiffs continued to inform the Court that they had settled the case, while the Defendant failed to respond to the Court’s requests for a status update – never a good practice – until in November it informed the Court that the parties had reached an impasse.  Plaintiffs disagreed, claimed they did indeed have a deal, and moved to enforce it. Defendant Health Systems Inc. identified three sticking points: the virtual settlement fund and calculation of class attorneys’ fees; the scope of class notice; and the scope…

In a brief, but useful order, Judge Fleissig denied a motion to quash a subpoena and for sanctions asserted by counsel characterized as a “professional objector.”   Class counsel for a class action pending in the United States District Court for the Central District of California had served a subpoena on the Law Office of Jonathan E. Fortman, LLC, which represented an objector to the proposed class settlement.  The subpoena instructed Fortman/Movant to attend a deposition and produce documents related to: 1) The filing of the objection in the underlying action; (2) Any objections filed in state or federal court by Movant to other class action settlements; (3) Any fee sharing arrangements between Movant and its clients in relation to the current and other objections; and (4) Any settlements or payouts Movant received in return for withdrawing a client's objection or appeal. Fortman asserted “outrage,” moved to quash, and sought fees…

In Coulter v. Anadarko Petroleum Corp., 2013 WL 135664 (Kan, Jan. 11, 2013), the Kansas Supreme Court closed the book on nearly fifteen years of oil and gas lease class litigation and provided some helpful guidance on how Kansas courts will evaluate the adequacy of class counsel and the fairness and adequacy of class action settlements.  This class action was brought in 1998 by owners of mineral interests in lands leased by APC principally, and alleged that APC had wrongfully allocated production and marketing costs against royalty payments in violation its contractual obligation to produce gas at its own expense.  After a bench trial and submission of proposed findings of fact and conclusions of law by both sides in 2002, the case sat with no ruling for years.  In 2008, after moving to recuse the judge and receiving no ruling on that motion, the parties took matter into their own…

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