Randall Burkholder
Managing Director and Head of Settlement Administration
New York
Wed, May 31, 2023
The Kroll Lens: Monitoring Class Action Settlements – 2023, Volume III
In Volume III of the Kroll class action lens, we examine recent court decisions in class action settlements in the Southern District of New York, Eastern District of Missouri, and the Northern District of California.
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Disclaimer: Please note that the content below is intended to report on class action decisions and Kroll's Settlement Administration practice may not have been involved with these cases.
Hezi v. Celsius Holdings, Inc.
No. 1:21-cv-09892, 2023 WL 2786820 (S.D.N.Y. Apr 5, 2023) (Rearden, J.)
A class of consumers settled deceptive labeling and marketing claims against Celsius Holdings, Inc., a manufacturer of food products. After notice was provided to the class, the Court granted final approval of the settlement and awarded fees, costs and incentives.
The Court analyzed key factors to conclude that certification was proper and that the settlement should be granted final approval. The Court found that there was sufficient discovery and arms-length negotiations to reach a fair and reasonable settlement agreement that required the Defendant to implement a new labeling program and create a $7.8 million fund to be distributed to the class.
The Court also found that sufficient notice had been afforded to the class members, highlighting that a total of 906,539 claims submissions had been received, of which 245,828 were determined to be valid. Additionally, the agreement provided for incentive awards of $20,000 to three representatives, $2.6 million in attorneys' fees, and $242,000 in costs. The Court determined these amounts to be reasonable.
Pearlstone v. Wal-Mart Stores, Inc.
No. 4:17-cv-2856, 2023 WL 2864607 (E.D. Mo. Apr. 7, 2023) (Autrey, J.)
A class of consumers settled with retailer chain Wal-Mart Stores, Inc., alleging faulty return procedures had failed to provide complete sales tax refunds on product returns. After multiple distribution attempts to the class of over 250,000 claimants, residual funds of $169,183.87 remained, and the Court granted the Plaintiff’s motion for distribution to cy pres designees.
In support of this decision, the Court weighed whether the cy pres distribution was appropriate under Eighth Circuit precedent. The Court first found that the amounts remaining in the fund following the initial distributions were too small to make further individual distributions economically viable. Next, the Court found the settlement agreement had provided for a cy pres distribution of remaining funds, and that such provision had been previously approved and communicated via the class notice, without any objections in response.
Finally, the Court determined that the designees, various legal aid organizations, shared goals and missions aligned with the nature and purpose of the settlement in providing access to justice for low-income individuals and families.
In re: Roundup Products Liability Litigation
MDL 2714, 2023 WL 2723334 (N.D. Cal. Mar 31, 2023) (Chhabria, J.)
A class of consumers settled retail pricing claims with a lawncare product manufacturer. Plaintiffs sought final approval of the settlement agreement, which the Court granted, overruling an objection.
The Court noted that approval of the settlement terms was justified, and that notice had been disseminated with only one objection received. The Court also noted that various objections that were raised at the preliminary approval stage had been rejected at that time and were now being renewed by the same objectors. The Court found that the objectors had raised no new facts or information with respect to such claims that would cause a denial of the motion for final approval.
Specifically, the Court found no evidence of collusion or inadequate representation, of unfairness to various class members, of causing individual members to forgo higher damage awards or of a need to include a potential award for punitive damages for personal injury claims.
Furthermore, the Court found no special advantage in establishing claims for Missouri plaintiffs over plaintiffs from other states. The Court noted that case law relied upon by objectors was factually distinguishable from the instant case, and that failing to issue separate notice of parallel litigation to the Missouri state class was immaterial under Rule 23, and immaterial to the settlement class in this case.
Senne v. Kansas City Royals Baseball Corp
No. 14-cv-00608, 2023 WL 2699972 (N.D. Cal. Mar 29, 2023) (Spero, Mag. J.)
A class of baseball players asserted various wage claims against the Kansas City Royals baseball team. Following preliminary approval, the Court heard the Plaintiff’s motion for final approval, along with objections, and a motion for fees and incentive awards. The Court granted the Plaintiff’s motions and overruled the objections.
While the parties had initially set aside $450,000 for notice and settlement administration costs (including a third-party economist), the Court ultimately approved reserving $995,000 on grounds that, as the settlement administrator explained, costs had been more than anticipated due to (1) class member communications being seven times higher than anticipated; (2) more complex tax reporting requirements than initially anticipated; and (3) more complex data than initially anticipated.
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