The Kroll Lens: Monitoring Class Action Settlements – 2023, Volume IIIThe Kroll Lens: Monitoring Class Action Settlements – 2023, Volume VI

Thu, Oct 19, 2023

The Kroll Lens: Monitoring Class Action Settlements—2023, Volume VI

In Volume 6 of Kroll’s Class Action Lens, we examine recent court decisions from the District of Delaware and the Central 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.

Desue v. 20/20 Eye Care Network, Inc.,

No. 21-cv-61275, 2023 WL 4420348 (S.D. Fla. Jul 8, 2023) (Ruiz, J.)

A class of individuals brought suit against a data platform after an alleged data breach involving sensitive information. The parties settled and sought final approval of the settlement and fees and costs.

The Court granted final approval. In support of its decision, the Court analyzed the agreement under Rule 23 and the 11th Circuit's Bennett factors. For certification, the Court briefly reaffirmed its analysis performed in connection with preliminary approval, finding numerosity met by four million class members, and the claims and common questions all arising from the same incident.

Looking next at reasonableness, the Court found that the class was adequately represented by counsel and the class member Plaintiffs, and that the settlement was negotiated at arm's length. For adequacy of relief, the Court found that the Plaintiffs had sufficient information from discussion and discovery, as well as from counsel's previous experience with data breach cases. As for the specific relief, the Court found that the compensation and identity monitoring service options offered meaningful relief comparable to that in similar cases, and that distribution of this relief would be efficient. The Court also noted that the high level of risk and complexity in this type of case made settlement favorable, and that class members were treated equitably relative to each other.


Looking also at the notice plan, the Court found that postcard notice had been delivered to 86% of the almost four million class members, and 26,000 claim forms had been received, including some potential duplicates. The Court found that the notice was sufficient, with the percentage of notice falling within a reasonable range of 70 to 95%, and that the claims submitted rate of less than 1% was also within an acceptable range.

The Court further noted that only 15 opt-outs and no objections were filed, and that class counsel endorsed the settlement terms.

For fees and costs, the Court found that the amount requested was reasonable in light of the facts that (1) it was lower than the average fee award of 33% (2) the fee request was appropriate under the 11th Circuit's Camden factors and (3) amounted to a negative multiplier. The Court noted these requests were also within the class notice and no objections had been filed.

Farrar v. Workhorse Group, Inc.,

No. 21-cv-02072, 2023 WL 5505981 (C.D. Cal. Jul. 24, 2023) (Carney, J.)

A class of shareholders brought a securities case against Workhorse Group, Inc., a postal truck manufacturer, alleging false and misleading statements. After reaching settlement via mediation, the parties moved for final settlement approval and attorney fees. The Court granted the motions in substantial part and overruled various objections.

In support of this decision, the Court first reviewed its earlier class certification analysis and found that predominance and superiority remained satisfied.

The Court then analyzed the settlement agreement for fairness, first finding that Plaintiffs and Lead Counsel were adequate representatives, and that the settlement was the result of arms’ length negotiations before a mediator and there were no signs of collusion.

The Court also found the settlement treatment to be adequate in light of the Defendants' remaining insurance proceeds being used for the settlement instead of furthering substantial litigation costs, and the risk in bringing falsity and scienter claims to trial. The Court also found that the settlement value, which amounted to 3% of what could potentially be won at trial, was reasonable considering the low likelihood of a successful verdict. The Court also found that the distribution method was reasonable.


Turning to attorneys’ fees, the Court analyzed the proposed award for indicia of collusion. The Court found no clear sailing agreement, no kicker or reverter clause, and that the award sought—25% of the available cash and 25% of the available common stock—was not disproportionate. The Court found this amount was warranted based on the results achieved, the skill required, and the quality of work. The Court also noted that the lodestar cross-check resulted in fair compensation for counsel.

Turning next to costs, the Court found the cost of lead counsel and the settlement administrator to be reasonable and supported by documentation or various declarations. However, the Court changed the lead counsel's fee calculation so as to apply the benchmark percentage only after deducting administration costs from the common fund before allocating fees.

Finally, the Court looked at the response of the class to the notice issued, finding the submission of 25,518 claims weighed in favor of granting final approval. The Court reviewed the objections submitted, which were mainly concerned with attorneys’ fees, and noted in that regard that the proposed fees were not disproportionate and were supported by Ninth Circuit precedent. The Court also found that a recognized loss amount basis for pro rata distribution was reasonable, even though some objectors would receive no compensation by this calculation.

Zakikhani v. Hyundai Motor Company,

No. 8:20-cv-01584 (C.D. Cal. Jun. 14, 2023) (Blumenfeld, J.)

A class of car owners commenced an action against Hyundai Motor Company alleging defects with the anti-lock brake system of their vehicles. The parties reached a settlement after two years of litigation, and final approval was granted over objections. One of the objectors filed post-judgment motions for reconsideration, to intervene, and for attorney's fees and a service award for himself. The Court denied all three motions as meritless.

Looking first at the motion for reconsideration under Rule 60(b)(2) and (6), the Court considered whether newly discovered evidence might lead to a change in circumstances. The Court found the objector had identified no new facts or law previously unavailable to the Court. The Court also found the objector's argument would fail on the merits, as the standard was to provide the best practicable notice to the class, and the objector's reliance on statistics from 2013 postal delivery rates was too speculative to presume that the notice provided was inadequate. The Court also noted that the number of undeliverable notices was as expected in similar cases, and that actual notice to all class members was not required.

The Court further rejected the argument that the objector was unable to respond to the Court's questions at an earlier stage and was denied the chance to submit a presentation at the fairness hearing. The Court found it had previously instructed the objector's counsel to provide such responses numerous times, and no response was ever given. The Court also found the objector had not submitted the presentation with advance notice to the other parties before the hearing and made no objection when the request was originally denied. The Court also found that the objector’s previously rejected arguments could not form a basis for reconsideration now.


Looking at the motion for mandatory intervention, the Court found that the plaintiffs had challenged whether this application was timely, and whether the objector's interest could be represented adequately without intervention. The Court found the intervention would not be timely, coming after years of litigation and a grant of final approval, which would likely prejudice the parties if re-opened. The Court also found that the objector had given no reason for his delay in submitting the application, and that the objector's argument for timeliness was both without legal support and ignored the Ninth Circuit's factors for proving timeliness. The Court likewise found the objector had failed to demonstrate what might be accomplished through allowing him to intervene.

Turning to the request for fee and service awards, the Court found that the objector had not substantially enhanced the settlement for the class's benefit, and that the fee amounts he sought were not substantiated by any records. The Court also found that the objector had not submitted a declaration or documentation concerning work performed on the case to support his request.


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