On October 25, 2023, the Eleventh Circuit overruled several objections to a $2.67 billion antitrust class action settlement agreement that was the product of years of negotiations between Blue Cross and classes of its past and present health plan subscribers. Two objections, raised by Home Depot, focused on (i) the settlement’s release of antitrust claims arising from Blue Cross’s conduct, and, relatedly, (ii) the adequacy of representation for an injunctive class of plaintiffs who might have future claims based on that conduct.
Continue Reading Eleventh Circuit Upholds Blue Cross Blue Shield Subscriber Settlement Over Antitrust and Public Policy ObjectionsSettlement
California Federal Court Clamps Down on ‘En Masse’ Class Claims Identified by AI
By Marc Capuano, Steve Petkis & Gregory Halperin on
Courts and litigants continue to grapple with the new frontier of artificial intelligence (“AI”). One recent case in California demonstrates a new wrinkle in this evolving landscape—the use of AI to aggregate class claims.
Because class settlements bind absent class members who do not object or opt out, Rule 23 requires courts to carefully review and approve them as “fair, reasonable, and adequate.” An important part of this inquiry is making sure class members are given adequate notice of the terms of the proposed settlement and their rights. When class members are required to submit claims to access settlement benefits, parties often turn to professional claims administration companies to assist in providing notice and facilitating the claims process. Under Rule 23, courts closely monitor the information that flows from class counsel and claims administrators to putative class members to make sure it complies with due process.
Continue Reading California Federal Court Clamps Down on ‘En Masse’ Class Claims Identified by AISecond Circuit Holds that Rule 23(e) Prohibits Presumption of Fairness of Arm’s-Length Negotiated Class Settlements
By Jeffrey Huberman & Sonya Winner on
In Moses v. New York Times Co., 2023 WL 5281138 (2d Cir. Aug. 17, 2023), the Second Circuit vacated and remanded the approval of a class action settlement because the district court applied the wrong legal standard in determining that the settlement was fair. But in doing so, the court reiterated that incentive awards for class action representatives are permissible in the Second Circuit.
Continue Reading Second Circuit Holds that Rule 23(e) Prohibits Presumption of Fairness of Arm’s-Length Negotiated Class SettlementsSupreme Court Denies Cert on Incentive Awards
By Jeffrey Huberman on
We previously covered the Eleventh Circuit’s decision in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244 (11th Cir. 2020), in which the Eleventh Circuit relied on two Supreme Court decisions from the 1880s to prohibit courts from awarding incentive or service awards to class representatives in class settlements. Id. at 1255 (citing Trustees v. Greenough, 105 U.S. 527 (1881), and Cent. R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885). Although the Eleventh Circuit was the first federal appellate court to bar these awards in all circumstances, a recent Second Circuit decision agreed that these awards are “likely impermissible” under Supreme Court precedent, while observing that it would take the entire Second Circuit to overturn prior precedent upholding incentive awards. See Fikes Wholesale, Inc. v. HSBC Bank USA, N.A., 62 F.4th 704, 721 (2nd Cir. 2023). The Department of Justice has likewise implied that it agrees with the Eleventh Circuit’s position, relying on the Johnson decision in an effort to block incentive awards from a class settlement in a District of Columbia court.
Continue Reading Supreme Court Denies Cert on Incentive AwardsEleventh Circuit Analyzes Article III Standing in Class Action Settlement Context
By Amy Heath on
The Eleventh Circuit recently addressed two aspects of Article III standing relevant to class action settlements: the standing of a class member to object, and the standing of class representatives to seek injunctive relief—and thus whether such injunctive relief should be given any weight as part of the approval process.
Continue Reading Eleventh Circuit Analyzes Article III Standing in Class Action Settlement ContextDOJ Seeks to Block Class Action Incentive Awards in Recent Class Action Settlement
By Jeffrey Huberman on
Last month, this blog covered the Eleventh Circuit’s denial of a petition to rehear Johnson v. NPAS Solutions, LLC, a decision that held that class action incentive awards are per se unlawful. See 2022 WL 3083717 (11th Cir. Aug. 3, 2022). That denial left the Eleventh Circuit as the only circuit where class action incentive awards can never be included in settlements under any circumstances. Now, the Department of Justice has relied on the Eleventh Circuit’s decision in Johnson to try to block class action incentive awards in a class action settlement with the federal government.
Continue Reading DOJ Seeks to Block Class Action Incentive Awards in Recent Class Action SettlementCrypto Class Settlement Nixed Due to Insufficient Data on “Anonymous” Investors
By Alexander Schultz on
A settlement class that Judge Lewis A. Kaplan (S.D.N.Y.) was likely to approve circa June 2021 was rejected “on further reflection” last week, due to a lack of information about how the lead plaintiff stacked up against a class of largely “anonymous” crypto investors.
Continue Reading Crypto Class Settlement Nixed Due to Insufficient Data on “Anonymous” InvestorsEleventh Circuit Holds that All Class Members Must Have Standing Under Circuit Law to Recover Individual Damages
By Jeffrey Huberman on
In Drazen v. Pinto, the Eleventh Circuit vacated a class settlement and held that in order to receive individual damages (whether through a settlement or otherwise), all class members must have Article III standing under Circuit precedent. 2022 WL 2963470, at *6 (11th Cir. July 27, 2022). The decision gives defendants another tool to defeat class certification, while at the same time makes it more difficult to include class members that lack standing in classwide settlements.
Continue Reading Eleventh Circuit Holds that All Class Members Must Have Standing Under Circuit Law to Recover Individual DamagesEleventh Circuit Confirms Circuit Split Over Class Representative Incentive Awards
By Jeffrey Huberman on
The en banc Eleventh Circuit recently denied a petition to rehear the case of Johnson v. NPAS Solutions, LLC (Johnson II). See 2022 WL 3083717 (11th Cir. Aug. 3, 2022). The initial opinion in Johnson relied on two Supreme Court decisions from the 1880s to hold that…
Continue Reading Eleventh Circuit Confirms Circuit Split Over Class Representative Incentive AwardsFourth Circuit Rules that Settling Parties, Not Objectors, Bear the Burden of Showing a Proposed Class Settlement Should Be Approved
By Class Actions Team on
The Fourth Circuit recently clarified two points of law on which it had not previously spoken: (1) who bears the burden when a class member objects to a proposed settlement as unfair, unreasonable, and inadequate; and (2) whether an objecting class member can be required to release a valueless claim without compensation. 1988 Tr. for Allen Child. Dated 8/8/88 v. Banner Life Ins. Co., 2022 WL 774731 (4th Cir. Mar. 15, 2022). In a long-running dispute between a life insurance company and a class of its policyholders, policyholder 1988 Trust for Allen Children Dated 8/8/88 (the “Trust”) opted out and objected to the proposed settlement.
Continue Reading Fourth Circuit Rules that Settling Parties, Not Objectors, Bear the Burden of Showing a Proposed Class Settlement Should Be Approved