The Kroll Lens: Monitoring Class Action Settlements—2025, Volume XIV

Stark v. Patreon, Inc.,

No. 22-CV-03131-JCS, 2025 WL 1592736 (N.D. Cal. Jun. 5, 2025) (Spero, Mag. J.)

Plaintiffs filed suit against a monetization platform, alleging the improper disclosure of usage of data under the Video Privacy Protection Act (VPPA). After reaching a settlement, notice was issued to the class, and 1,290 opt-outs were received, including 927 who had assigned their claims to Lexclaim Recovery Group. Lexclaim and another class member filed contingent objections, which the Court overruled. Plaintiffs and the defendant challenged the opt-out assignments, sought to issue curative notice to those members, and requested that the Court invalidate the LexClaim opt-outs, which the Court sustained. Plaintiffs also filed a motion for final approval and fees, which the Court granted.

For its approval order, the Court reaffirmed the previous certification order and found notice to have been adequately provided. The settlement was deemed reasonable, as it resulted from arm's length negotiations without collusion and provides adequate and equitable relief in light of the risks of continued litigation. For fees and costs, the Court found counsel had delivered adequate monetary and non-monetary relief, and that the request was reasonable given the risks and skill needed in proceeding, as well as acceptable under a lodestar cross-check. The Court also approved incentive awards, finding the requests comparable with those in similar cases.

The Court wrote at length about Lexclaim's objection, first outlining Lexclaim's involvement in offering absent class members an upfront payment and further percentage interest in exchange for assignment rights. The Court found Lexclaim's advertisers operated a website outside of the court-approved notice channels. Through that site, class members could complete an eligibility questionnaire and opt-out process but were given little information about their claims. The site also offered a $10 immediate payment plus 20% of any eventual recovery. Lexclaim then sought an independent settlement from defendant of $1,600 per claimant, which was declined.

Lexclaim submitted opt-out forms, as well as its own opt-out form, all lacking the required address and telephone information for each claimant. The claims administrator noted that the settlement agreement prohibited mass opt-outs. The Court found that Lexclaim's assignment agreements had not been signed, and no evidence to the contrary was submitted. Lexclaim argued that the opt-outs were not a "mass" submission, were not the result of misleading communications, and that a magistrate judge lacked jurisdiction to bind Lexclaim or invalidate the opt-outs.

The Court began its analysis by examining jurisdiction under 28 U.S.C. § 636(c), holding that its proceedings were proper with the consent of the named plaintiffs alone, without requiring the express consent of absent class members, citing the Ninth Circuit's ruling in Koby v. ARS Nat'l Servs., Inc. The Court also held that its authority extended to determining whether absent class members received adequate notice, whether opt-outs were validly submitted and whether assignments were valid.

The Court cited cases in which non-party claims aggregators' misleading notice omissions led to invalidated opt-outs and the need for curative notice. The Court found the same types of defects with Lexclaim's process, including confusion over whether attorney-client relationships had been created. As a result, the Court found the opt-outs were invalid and incomplete. The Court also held that it had discretion to determine whether opt-outs complied with established procedures. Lexclaim submitted the forms as a package through an aggregation campaign, all containing the same insufficiencies and accounted for a majority of opt-outs in the case. The court concluded that allowing this group opt-out would violate class members’ due process rights and that the individual opt-outs were also non-compliant due to their insufficiencies.

The Court then looked at validity of the assignments and found that Lexclaim's failure to countersign the agreements, or to provide any evidence of having done so, was conclusive. The Court also determined that VPPA rights are personal to class members and cannot be assigned. Citing California and federal precedent, it held that invasion of privacy claims are tort-based injuries, not rights of publicity, and thus are not transferable.

Lexclaim argued that requiring it to provide curative notice might violate the First Amendment by compelling speech. The Court distinguished this from cases involving compelled commercial speech and held that correcting confusion caused by omissions of material information was a reasonable ground for regulation of speech so as to prevent deception.

Dunsmore v. San Diego County Sheriff's Dept.,

No. 20-CV-00406, 2025 WL 2210186 (S.D. Cal. Aug. 4, 2025) (Battaglia, J.)

Plaintiff inmates filed suit against incarceration facilities, claiming discriminatory and dangerous conditions caused by jail policies and procedures. The parties reached a settlement on specific claims under the Americas with Disabilities Act (ADA) and sought final approval, which the Court granted.

In support of its decision, the Court first affirmed its prior certification order. It then reviewed the notice plan, which included written postings in English and Spanish throughout certain locations in jail facilities, hand-delivered notices to every individual entering the jail for a period of four weeks, verbal notice to those with reading disabilities and video notices at kiosks in housing units. The Court concluded that the notice was adequate.

Next, the Court reviewed the objections to the settlement. These included requests for damages based on inmate treatment, concerns about medical care and nutrition provisions and claims that Defendants impeded inmates’ ability to communicate with counsel. The Court noted that Plaintiffs in this subclass had only sought injunctive relief under their ADA claims, and that other claims in the case could still proceed. The Court also found no evidence that the objector claiming interference with counsel opposed the settlement. The Court concluded that these objections were either outside the scope of the settlement or insufficient to justify rejecting the agreement.

Looking at reasonableness factors, the Court affirmed its previous findings, noting the experience and views of counsel, the presence of a government participant and the reaction of class members, and found no reason to alter its prior analysis.