Law 360 reports on Ted Frank challenging the Netflix-Wal-Mart settlement that did not benefit class members.
Theodore H. Frank, a Netflix subscriber and therefore class member who also launched the Center for Class Action Fairness LLC, argued that the deal didn't get the level of review required under the Class Action Fairness Act for settlements that give class members coupons instead of cash payouts.
The $27.2 million total included only $5.2 million in cash with another $8.9 million in Wal-Mart gift cards, which Frank claims are just another form of coupon toward a future purchase. But the judge overseeing the case treated them as a cash payment, and as a result the settlement didn't receive the appropriate level of "heightened judicial scrutiny" and wasn't subject to stricter limits on attorneys' fee award, according to Frank's appellate brief.
"The district court’s refusal to classify the relief as coupon relief had no statutory or legal basis and was an error of law," Frank wrote. "CAFA would have no meaning if settling parties could avoid its requirements with a thesaurus."
Frank is one of several class members challenging the California district court's final approval of the Wal-Mart settlement earlier in 2012.
Read the full article at Law 360.