A common feature in class action settlements is an incentive (or service) award for each named plaintiff—an extra payment above and beyond what they would receive as ordinary class members that is in theory designed to compensate them for the work of being a named plaintiff. A circuit split has developed over whether incentive awards are permissible in federal class action lawsuits. But the Supreme Court’s guidance on whether these awards are improper will have to await another day, because the Court recently denied the petitions for review in Johnson v. Dickenson, No. 22-389, and Dickenson v. Johnson, No. 22-517.Continue Reading Supreme Court declines to hear challenge to validity of incentive awards
Most potential class actions are resolved before class certification. Often courts dismiss cases at the pleadings stage or grant early summary judgment. Sometimes plaintiffs choose to dismiss their cases rather than continuing to pursue them. And often class actions settle on an individual basis at an early stage.
The benefits are obvious. Early settlements offer individual plaintiffs relatively quick payments. They allow defendants the opportunity to end cases early without the need to pay the high costs—including often burdensome discovery-related costs—to defend against class litigation. And they benefit the court system by avoiding needless litigation that can clog court dockets. …
Continue Reading Judicial review of pre-certification settlements: it’s time to put some district courts’ continued reliance on the Ninth Circuit’s Diaz rule to rest
On November 1, 2018, the U.S. District Court for the Northern District of California published updated procedural guidance for class action settlements (the “Guidance”). While the court made changes to align its rules with the December 1, 2018 amendments to Federal Rule of Civil Procedure 23, the court also sought to provide better information for parties and courts in negotiating and approving settlements. It became the first federal district court to require parties to class action settlements to publicly disclose a broad range of detailed settlement information. The following is an overview of key changes.
Continue Reading Northern District of California adopts guidance for class action settlements
On December 1, 2018, the amendments to the Federal Rule of Civil Procedure 23 took effect. These amendments primarily alter rules governing federal class action notice, settlement, and appeal. The following is an overview of key changes.
Continue Reading December 2018 amendments to Rule 23 are now in effect
Another Ninth Circuit panel has roiled the class certification waters, this time rejecting a class action settlement because the district court did not conduct a meaningful analysis of predominance.
Continue Reading Ninth Circuit rejects nationwide class settlement
We’ve often argued that when the principal rationale for approving a low-value class settlement is that the claims are weak, that is a signal that the case should not have been filed as a class action in the first place. The Second Circuit recently reached that exact conclusion when considering a proposed class settlement in a Fair Debt Collection Practices Act (FDCPA) case, holding that the putative class couldn’t be certified and that the FDCPA claims should be dismissed.
Continue Reading Second Circuit holds that class action seeking “meaningless” relief shouldn’t be certified
Rule 23 may be in for some major changes. The Advisory Committee has commissioned a Rule 23 subcommittee to investigate possible revisions to the class action rules. That subcommittee issued a report (pdf) discussing its progress, and recently has been conducting a “listening tour” of sorts regarding potential rule changes.
Our initial view is that the business community should have serious concerns about the approach that at least some members of the subcommittee appear to be taking, as several proposals are aimed at rolling back judicial decisions—including Supreme Court decisions—that are critical to ensuring that class actions satisfy the requirements of due process.
Here are ten things you need to know from the subcommittee’s report.Continue Reading Ten Things Class Action Practitioners Need To Know About Potential Amendments To Federal Rule Of Civil Procedure 23
The first bill signed by Oregon Governor Kate Brown—H.B. 2700 (pdf)—changes the rules for handling payment of damages awards in class actions in Oregon state courts. Effective immediately, including for pending actions, the new law attempts to redirect unclaimed damages under class-action settlements or judgments to the state bar’s legal aid program and to charities picked by the judge presiding over each case. In other words, Oregon has effectively mandated cy pres in every class action. (We’ve repeatedly covered—and criticized—the use of cy pres awards in class actions.)
Among other things, the new law amends Oregon Rule of Civil …
Continue Reading New Oregon class-action law purports to seize unclaimed damages for legal aid and judge-picked charities
Here’s a great formula for becoming a rich plaintiffs’-side class-action lawyer:
- Copy-and-paste some cookie-cutter complaints alleging technical statutory violations.
- Send demand letters to a group of deep-pocketed targets and negotiate coupon settlements with them before even filing the complaints.
- Then seek a six- or seven-figure award of attorneys’ fees for doing no heavy lifting, bearing no risk of non-payment, and providing no meaningful social benefit.
But a district judge in Massachusetts recently changed the equation by cutting a class counsel’s fee request by more than eighty percent in Brenner v. J.C. Penney Co. (pdf).
Proponents of class actions often contend that these lawsuits deliver substantial benefits to class members. But while media coverage of class actions often suggests that class members are receiving millions of dollars in relief, most practitioners in the class action arena know that the reality is quite different. That said, to date there has been little empirical information on the practical results of class actions.
My colleagues and I have sought to change that. At the request of the U.S. Chamber’s Institute for Legal Reform, a team of Mayer Brown lawyers (including Andy Pincus and me) have produced a study detailing how consumer and employee class actions filed in 2009 actually fared in practice. The bottom line: of the class actions we studied, only a few cases delivered tangible benefits to more than a small fraction of class members.
A copy of the study is available here. It has already received press coverage in Forbes and Reuters’ On the Case blog.Continue Reading New Study Finds That Class Members Rarely Benefit From Class Actions