By: Steven Weisbrot, Director of Class Action Services at Kurtzman Carson Consultants (“KCC”) and Carla Peak, Director of Legal Notification Services at KCC. The views expressed are their own.
Whether you love them or hate them, class action objectors exist and more than a few of them are professionals, just waiting to pick apart your settlement for their financial gain. Their modus operandi is to seek out as many issues with the settlement as they possibly can—including objections to the adequacy of Class Notice. How can you prevent such an attack on your Notice? Below are some simple steps you can take to reduce the likelihood of an attack.
Use available resources
There are some excellent resources at your finger tips to help you design an effective Notice. For starters, review the Federal Judicial Center’s (FJC) Illustrative Forms of Class Action Notices available at www.fjc.gov. After all, it is hard for an objector to make a valid argument when your Notice follows a model explicitly endorsed by members of the federal judiciary.
Also available at the FJC’s website is the Judges’ Class Action Notice and Claims Process Checklist and Plain Language Guide. When designing your Notice, simply go down this list and check off each item. Judges are becoming aware of this resource and are beginning to reference it when writing their decisions. E.g., In re Cadence Design Systems, Inc. Securities Litig., slip op., No.08-cv-04966 (N.D. Cal. Aug. 26, 2011) (preliminary approval of the settlement and certification of the class was denied because the court was not able to determine whether the proposed Notice was adequate). Likewise, objectors are well aware of this resource and often use it to find any deviation or Notice inadequacy no matter how small. See Declaration on Adequacy of Class Notice Proposal, Bruno v Quten Research Institute, LLC, No.11-cv-00173 (C.D. Cal. June 25, 2012).
Include all required information
Notice content is guided by Federal Rule of Civil Procedure 23(b)(3) and The Manual for Complex Litigation Fourth Edition. An objector’s job is made easy when you fail to include the required content in your Notice. Some of the most common Notice content issues include: omitting or concealing the extent of attorneys’ fees; omitting incentive awards to class representatives; hindering a class member’s ability to make an informed decision; not allowing class members to calculate or estimate the amount of potential individual recovery and omitting cy pres details.
Regardless of whether attorneys’ fees will be deducted from the settlement fund or paid separately by the Defendant(s), it is important to include a maximum dollar amount or percentage that will be sought. Failure to include this information opens up the Notice and settlement to attack. E.g., Bloyed v. General Motors, 881 S.W.2d 422 (Tex. App. 1994) (finding that Notice was deficient and it should have disclosed the amount of the attorneys’ fees agreed to or proposed as part of the settlement).
Although it may be difficult to predict fees, expenses, and the amount of time that will be spent on the settlement process, be mindful that professional objectors will jump at the opportunity to file an objection to a fee request that exceeds the amount provided in the Notice. See Objection to Proposed Settlement, Stetson v. West Publishing Corp., No. 08-cv-810 (C.D. Cal. May 24, 2011 ) (objector claimed that the amount of fees and costs actually sought by Class Counsel far exceeded the “award of attorney’s fees and costs in an amount of up to twenty-five (25%) of the Settlement Fund” that was stated in the Notice).
It is also important to include the amount of money that will be sought to compensate the class representatives for their work on behalf of the entire class. Professional objectors will be quick to point out the omission of this information from the Notice. See Objection filed by the Center for Class Action Fairness LLC, In re Pampers Dry Max Litig., No. 10-cv-00301 (S.D. Ohio Aug. 29, 2011) (objector claimed that neither the Notice nor the settlement disclosed the total amount that would be sought in incentive awards). In addition, Judges have denied payments that are not disclosed in the Class Notice (see, for example, In re Excess Value Insurance Coverage Litig., 598 F. Supp. 2d 380 (S.D. NY 2005), where the Court denied Plaintiff’s motion for incentive compensation to the class representatives because the long form and short form Notice failed to mention it).
Be sure to include all material information that class members need to make an informed decision about their rights. If class members are unable to read the Notice, understand what the lawsuit is about, or what their options are and how to act upon them, you open the settlement up to objections. E.g., Molski v. Gleich, 318 F.3d 937 (9th Circuit 2003) (objector claimed that the summary Notice failed to communicate the full breadth of the release to the class).
The relative value of a settlement is of importance to professional objectors. If they believe (or can plausibly allege) that the class will receive less than class counsel’s fee request, they may object. Therefore, it is important to provide the amount of money that class members may be eligible to receive. If this is not possible, provide information that will allow them to calculate their estimated recovery amount. See Memorandum of Law in Support of Objection to Proposed Settlement, In re: Yahoo! Litig., No. 06-cv-2737 (C.D. Cal. Dec. 14, 2009) (objector claimed that the relief for current customers is “illusory,” the relief for former customers that are still in business is “non-existent” and a “token payment” is available to some unknown number of class members).
Cy pres distributions have come under attack for a variety of reasons, including lack of a perceived connection to the underlying suit or statute and for failing to make their identity known to the class. When it comes to Notice, the best way to minimize objections is to include the identity of the potential cy pres recipient in the Notice. See e.g., Brief of Objector, In re: Baby Products Antitrust Litig., Nos. 12-cv-1165, 12-cv-1165(L); 12-cv-1166; 12-cv-1167 (E.D. Pa. April 24, 2012) (the objector points out that neither the Notice nor the settlement identify the cy pres recipients; instead the settlement agreement states that the plaintiffs and defendants would each recommend two recipients to the court at a future date).
Professional objectors will scrutinize language that they feel the average person will not understand or be able to act appropriately on based on the information provided. See Objection filed by Public Citizen Litigation Group, Duhaime v. John Hancock Mut. Life, Ins. Co., No. 96-cv-10706 (D. Mass. Oct. 2, 1997) (objector claimed that both the pre and post settlement Notices did not adequately inform class members of the nature, value, and significance of the relief or that certain class members would waive future claims unless they submit a claim in the settlement).
Objectors will also criticize Notices that contain legal terms and concepts, especially when they are not defined. See Orrill v. AIG, Inc., 38 So. 3d 457 (La. Ct. App., 4th Cir. 2010) (court found that “most lay persons do not know what res judicata means” and therefore class members would not understand that by not opting out of one case; their claims would not be litigated in another and they could lose thousands of dollars).
In 2003, Federal Rule of Civil Procedure 23(c)(2)(B) was amended to address the use of legalese in Notice documents written for class members. The amendment affirms that class action Notices “must concisely and clearly state in plain, easily understood language” all required information about the litigation and class members’ rights and options. This can be tricky. What one person may consider plain language another person may have trouble understanding. Therefore, when writing in plain language, consider your audience. Be specific and use short, concise sentences to summarize key points and highlight key information. Write the way people think. Omit unnecessary words, use an active voice and avoid footnotes. The reader should be able to find what they need, understand what they find, and act appropriately on that understanding.
Provide Time and Ease of Response
When preparing a Notice plan and Notice documents, consider the amount of time you are allowing class members to act on their rights and whether or not you are making them overcome unnecessary hurdles to exercise those rights. The standard is to provide a minimum of 30 days from the last Notice appearance to the first response deadline. Allowing less time than that may result in opposition. Specifically, professional objectors have attacked situations in which there is a limited amount of time between the date the petition for attorneys’ fees is filed and the objection deadline. See e.g., Objection filed by the Center for Class Action Fairness LLC, In re Pampers Dry Max Litig., No. 1:10cv00301 (N.D. Ohio Aug. 29, 2011) (objector challenged the fact that objections were due on a Monday, but the fee request was not filed until almost midnight the Friday before).
With evolving technology, Notices are being distributed via email or advertisements on the internet. With that, professional objectors are also changing their expectations on what should be considered acceptable response mechanisms. When individual emails are the primary means of Notice, objectors are expecting class members to have the ability to act on their rights electronically as well. See Objection to Proposed Settlement and Proposed Attorneys’ Fee Award, In re Classmates.com Consolidated Litig., No 09-cv-00045 (W.D. Wash. Nov. 18, 2010) (objector argued that given the online nature of the defendant, the electronic means of Notice provided to the class, and the fact that the case had a dedicated email address and website, class members should have been able to object via email rather than being required to send an objection via postal mail to four different addresses and spend $1.76 in postage in a settlement worth $2-3). Therefore, consider using online claims filing and other online response mechanisms in conjunction with banner ads and emails, if those methods are being used in lieu of U.S. Mail.
No attorney welcomes the idea of an objection to a settlement that they have earnestly worked to achieve. By following the above steps, and contacting a plain language Notice expert as needed, you should be able to minimize the number of objections to Notice, giving you one less obstacle in the settlement process.