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.
Eleventh Circuit Analyzes Article III Standing in Class Action Settlement Context
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 Context
First Circuit Holds that Class Action Settlements Require Separate Counsel for Class Members with Significantly Different Claims
The First Circuit recently vacated and remanded a district court’s approval of a proposed class action settlement “because the absence of separate settlement counsel for distinct groups of class members makes it too difficult to determine whether the settlement treated class members equitably.” Murray v. Grocery Deliver E-Servs. USA Inc., — F.4th —, 2022
Eleventh Circuit Holds that All Class Members Must Have Standing Under Circuit Law to Recover Individual Damages
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.
Eleventh Circuit Confirms Circuit Split Over Class Representative Incentive Awards
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 district courts can never, under
Fourth Circuit Rules that Settling Parties, Not Objectors, Bear the Burden of Showing a Proposed Class Settlement Should Be Approved
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.
Keurig Settles K-Cup Recycling Claims
Keurig has agreed to settle on a nationwide class basis a lawsuit alleging that the labeling of its K-Cup pods misleads consumers into believing that K-Cups are more widely recyclable than the coffee pods actually are.
The complaint, filed in 2018, alleged that Keurig marketed its products as recyclable, despite knowing that they “typically end[ed] up in landfills.” The plaintiff claimed that the packaging conveyed that consumers can “[h]ave [their] cup and recycle it, too,” by following the illustrated instructions to “PEEL,” “EMPTY,” and “RECYCLE” next to the chasing arrow recycling symbol. However, the plaintiff claimed, these labels were deceptive because K-Cups cannot be recycled due to their size, making them per se deceptive under the Green Guides, which state that “if any component [of a recyclable product] limits the ability to recycle the item, any recyclable claim would be deceptive. . . . [If] its shape, size or some other attribute is not accepted in recycling programs, [it] should not be marketed as recyclable.” The plaintiff additionally alleged that even if any pods were incidentally recycled, they would still end up in landfills because there was no downstream market for the recycled pods.
Practice Pointers: Should a Putative Class Action Be Settled on an Individual Basis?
There are numerous ways that a class action may be won through an effective litigation strategy. But in some instances a corporate defendant will conclude that the most cost-effective approach is to pursue settlement rather than to take on the risks and costs of further litigation. Before going down that road, one of the first things that will need to be evaluated is whether to pursue a class-wide settlement, complete with court approval under Rule 23(e) or its state equivalent, or instead to try the simpler route of settling with the named plaintiff only.
Ninth Circuit Confirms State-Law Pre-Suit Notice Requirements Apply to Putative Class Representatives
A recent Ninth Circuit decision highlights the importance of considering whether a plaintiff’s failure to comply with a state-law pre-suit notice requirement can be used to quickly defeat a class action. The court rejected plaintiff’s argument that such pre-suit notice rules do not apply to putative class actions.