Lessons From CCAF On Designing Class Action Settlements

Law 360 reports on Center for Class Action Fairness' win in the In re Dry Max Pampers case.

The recent decision by the Sixth Circuit, overturning approval of a class action settlement in In re Dry Max Pampers Litigation (6th Cir. Aug. 2, 2013), is another in a string of wins for the Center for Class Action Fairness, which objects to settlements it considers unjust, and another reminder to class action defendants that they have to bear objections in mind when negotiating settlements.

An objector, represented by the Washington-based CCAF, argued that if the settlement was worth over $3 million to P&G, there was no reason why substantially all of that money should go to class counsel and none of it to class members. Put another way, if the claims were so valueless that class members deserve no relief, class counsel should not be rewarded with such a large fee after obtaining so little for class members.

The Sixth Circuit agreed in the process casting doubt on whether named plaintiffs in a class settlement ever could receive “incentive awards” amounting to more than the value of their personal claims. (The court declined to “lay down a categorical rule one way or the other” but was “most dubious of incentive payments when they make the class representatives whole, or (as here) even more than whole.”) One panelist dissented.

With Dry Max providing another win, the CCAF is nearly undefeated in the appellate courts when it pursues its objections.

Read the full article at Law 360.