Archives: Settlements

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Seventh Circuit Rejects Subway Footlong Class Settlement as a “Racket”

A recent Seventh Circuit decision pushed back on a proposed settlement of the Subway “footlong sub” class action, finding the proposed settlement a “racket” designed to benefit class counsel without any benefit to the class. The story begins in 2013 when a Facebook post showing a Subway footlong sandwich measuring just 11 inches went viral. … Continue Reading

California Court Rejects Tuna Settlement Over Scope of Release

In recent years, courts have been more carefully scrutinizing class action settlements. A recent example is Hendricks v. Starkist Co., Case No. 3:13-cv-00729 (N.D. Cal. Feb. 19, 2016), where the U.S. District Court for the Northern District of California denied final approval of a $12 million settlement of a class action filed against StarKist. The lawsuit … Continue Reading

Seventh Circuit Holds Attorney is Bound to $3.54m Class Settlement Fee Agreement He Did Not Sign

On February 14, 2014, the Seventh Circuit ruled that a plaintiff’s attorney was bound by the terms of a class action settlement involving alleged malfeasance in the laying of fiber-optic cables by telecommunications companies on certain landowners’ property even though the attorney never signed the final settlement agreement. The Seventh Circuit affirmed the Illinois federal court judge’s … Continue Reading

Those Blasted Exclusions! Court Rules that Notice of TCPA Exclusion in Renewal Policy was Valid

Last week, the Illinois Court of Appeals released an opinion ruling that Cincinnati Insurance Company has no obligation to contribute an additional $4 million to a settlement of a class action claim brought under the Telephone Consumer Protection Act (TCPA).  Windmill Nursing Pavilion Ltd. v. Cincinnati Insurance Co. et al., 2013 IL App (1st) 122431 … Continue Reading

Objectors Seek Writ of Certiorari to SCOTUS Over Monsanto Agent Orange Settlement

On January 21, 2014, objectors to a class action settlement over contamination from Monsanto Agent Orange herbicide filed a Petition for Writ of Certiorari with the Unites States Supreme Court.  The Petition asked the Court to entertain the objectors’ request to reverse the West Virginia Supreme Court’s November 22, 2013 decision, which affirmed the trial … Continue Reading

Tax Court Rules that Payments by Tobacco Distributor to Tobacco Master Settlement Agreement Qualified Settlement Fund Not Deductible Until Paid

In Suriel v. Comm’r, 141 T.C. No. 16 (Dec. 4, 2013), the Tax Court ruled that, under the specific facts in this case, the economic performance rules under IRC Section 461(h), permitting a tax deduction for certain liabilities when a liability is fixed and before the liability is actually paid, did not trump the qualified … Continue Reading

Australian Thalidomide class action settled

More than 50 years after the morning sickness drug Thalidomide was first released to the market, the drug’s British distributor announced on Monday, December 2nd that it has agreed to settle an Australian class action in the Victorian Supreme Court over birth defects linked to the drug.  The legal team representing the class claimed that Australia … Continue Reading

Casie Collignon to Present Program On Class Settlement Objections

Addressing class action settlement objections–including those made by so-called “professional” objectors, government agencies, and public interest groups–has become an increasingly important part of any class action litigator’s job.  On January 9th, our co-editor, Casie Collignon, and Bruce D. Greenburg of Lite DePalma Greenberg in Newark, N.J., will teach a CLE program that will review the trends in this area and outline strategies that counsel … Continue Reading

Class Action Settlement Based on Voucher Payout Wins Preliminary Approval by California District Court

On November 5, 2013, a California federal district court preliminarily approved a revised coupon-based class action settlement agreement between plaintiffs and OfficeMax (see Order Granting Preliminary Approval of Revised Class Action Settlement Agreemeent).  As reported here in September, the court rejected a prior proposed settlement between the plaintiffs, who had accused OfficeMax of illegally recording … Continue Reading

Judge Slashes Attorneys’ Fees and Incentive Awards in Defective Laptop Class Action

In a consumer class action settlement involving allegedly sluggish Acer notebook computers, a Northern California federal judge sua sponte slashed the attorneys’ fees award sought by plaintiffs’ lawyers from the requested $2,542,246 to $943,217.  Wolph v. Acer Am. Corp., Case No. 3:09-cv-0-1314-JSW (N.D. Cal. Oct. 21, 2013). The named plaintiffs accused Acer of selling notebook … Continue Reading

TCPA Class Action Settlements in Illinois—the Dispute Between Client and Insurer Rages On

On October 31, 2013, the Northern District of Illinois forced two insurers to cover a $6 million settlement of a TCPA class action despite claims that their insured, M&M Retail Center, Inc., settled for an inflated amount it knew it would never have to pay.  Maxum Indemnity Co. v. Eclipse Manufacturing Co., 1:06-cv-04946 (N.D. Ill. … Continue Reading

California Rejects a Class that Includes Uninjured Class Members

A California federal court has rejected a proposed settlement to a class action over alleged material omissions in Option Adjustable Rate Mortgage Loan documentation (Order Denying Plaintiffs’ Motion for Preliminary Settlement Approval in Peel, et al. v. BrooksAmerica Mortgage Corp., et al.).  Lead plaintiffs and defendants, which included several divisions of Washington Mutual, agreed to … Continue Reading

OfficeMax Class Action Zip Code Plaintiffs Again Seek Approval for Settlement and Attorney Fee Payment

Editor’s Note: This post is a joint submission with BakerHostetler’s Data Privacy Monitor blog. Lawyers representing a purported class of customers who accused retailer OfficeMax North America Inc. (OfficeMax) of illegally recording their zip codes tried again this week to gain court approval of a settlement deal agreed to with OfficeMax. Dardarian v. OfficeMax Inc., case number … Continue Reading

IRS Says Class Action Settlement Incentive Awards in Wage Based Claims Are Taxable As Wages

On March 15, 2013, the IRS issued a private letter ruling responding to a request for a determination of whether incentive awards paid to class representatives under a settlement agreement resolving a class action suit against an employer under the Fair Labor Standards Act were wages for employment tax purposes.  In the Ruling, the IRS … Continue Reading

Consumer Products Settlements Containing Cy Pres Distributions Receiving Increased Scrutiny

In a recent decision, In re Baby Products Antitrust Litigation, 2013 U.S. App. LEXIS 3379 (3d Cir. Feb. 19, 2013), the Third Circuit vacated the district court’s order approving a $35.5 million class action settlement which provided for the distribution of remaining settlement funds, after individual distributions were made to claimants and costs and attorneys’ … Continue Reading

Disproportionately Favoring the Named Plaintiffs Kills Settlement, Says Sixth Circuit

The Sixth Circuit recently limited defendants’ ability to craft settlements that disproportionately favor the class representatives.  Vassalle v. Midland Funding LLC, — F.3d –, 2013 WL 673517 (6th Cir. Feb. 26, 2013).  Though the court did not pass on the ubiquitous incentive award, its skepticism of “preferential treatment” for class representatives might cause district courts … Continue Reading

Blood Bank Data Breach Class Action Settlement Preliminarily Approved by California District Court Judge

In Johansson-Dohrmann v. CBR Systems, Inc. et al, No. 3:12-cv-01115 (S.D. Cal., filed May 7, 2012), the latest data privacy class action to reach settlement, Judge Michael M. Anello on February 5, 2013 granted preliminary approval of a proposed class settlement in a federal class action suit brought by a client of a blood bank … Continue Reading

IRS Reporting Requirements for Class Action Settlement Payments and Court Awarded Damages

When finalizing class action settlements, or paying damage awards after a class action judgment, it is important to be mindful of the taxation of these payments and the related IRS information reporting requirements triggered by these payments. In general, businesses and persons engaged in a trade or business are responsible for filing Form 1099-MISC to … Continue Reading

Late Class Settlement Claims – To Accept or Not to Accept?

Inevitably, there is always at least one late claim form arrival in every class action settlement. This precise issue was highlighted in a recent case in the Northern District of California. In Curtis-Bauer v. Morgan Stanley & Co., No. 3:06-cv-03903, a class action settlement was reached in a racial discrimination case against financial advisors at … Continue Reading

Second Circuit: Notice Required When Damages Not “Incidental” in a Rule 23(b)(2) Class

Editors’ Note:  This article originally appeared as a “Client Alert” from Baker’s Class Action Defense team. Pointing out pitfalls in structuring enforceable class settlements, the Second Circuit Court of Appeals recently found that an absent class member’s claims were not barred by a prior settlement in a Rule 23(b)(2) class where monetary relief was not … Continue Reading

Eleventh Circuit Upholds Class Settlement Over Objection of “Professional Objector”

Co-authored by:  Rodger Eckelberry Plaintiffs’ counsel and defense counsel have spent untold hours working on a class action settlement.  The parties have met numerous times with a court-appointed mediator, and have finally come to an agreed upon resolution of the case.  The settlement is submitted to the court for preliminary approval, which is granted.  Then, … Continue Reading

The Use of the Cy Pres Doctrine in Class Settlements

Co-authored by Rodger Eckelberry Defendants settle class actions to buy peace and put litigation behind them.  Plaintiffs settle class actions to guarantee at least some recovery, and to avoid prolonged litigation.  A settlement benefits no one, though, if the settlement is not approved by the court or if approval is reversed on appeal.  The Ninth … Continue Reading
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