In 2013, CEI’s Center for Class Action Fairness objected to and then appealed the approval of a nationwide class settlement where 0.2% of the class received a cash benefit, a total of $225,000, and the remaining class members received low-value coupons. In the same settlement, $8.85 million went to the plaintiffs’ lawyers and $3 million to local San Diego universities, including class counsel’s alma maters. On appeal, the Ninth Circuit vacated the settlement approval and remanded for further consideration.
Plaintiffs claimed that the defendants’ gift- and flower-delivery websites violated state and federal law by enrolling customers in rewards programs after luring them with the promise of worthless coupons. Oddly, class counsel negotiated a settlement consisting almost entirely of low-value coupons for class members. These coupons were nearly worthless as they expired after a year, were devalued because they precluded the use of standard freely-available 20% discounts, and could not be used on major holidays such as Valentine’s Day, Mother’s Day, or Christmas. Nevertheless, the district court approved the settlement again on August 9, 2016, and CCAF again appealed the settlement approval.
At the Ninth Circuit, the plaintiffs filed a motion for summary affirmance that was denied. CCAF filed its opening brief on May 1, 2017. That same month, 13 state attorneys general filed an amicus brief supporting CCAF’s challenge. Oral argument will be heard on May 17, 2018.
At the Ninth Circuit, the plaintiffs filed a motion for summary affirmance that was denied. CCAF filed its opening brief on May 1, 2017. That same month, 13 state attorneys general filed an amicus brief supporting CCAF’s challenge. Oral argument was heard on May 17, 2018. On October 3, 2018, the ninth circuit vacated $8.7 million in fees for plaintiffs’ attorneys, ruling the district court failed to apply the class action fairness act (cafa) and improperly treated the coupons as cash, which lead to the inflated fee calculation. While cei won a victory on attorneys’ fees, the ninth circuit upheld the cy pres portion of the settlement, holding that the district court did not abuse its discretion in approving the use of cy pres or the designated recipients.