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CA Federal Court Becomes First to Require Class Claims Rate Data Be Made Public

The U.S. District Court for the Northern District of California has become the first federal district court to require parties to class action settlements to publicly disclose claims rate data as part of a post-distribution accounting that must be filed with the court and posted on the settlement website. The requirement is included in procedural guidance for class action settlements recently updated by the Northern District to align the guidance with amendments to Federal Rule of Civil Procedure 23—which provides for class actions—that take effect on December 1, 2018.

NDCA Requirement for Post-Distribution Accounting

The accounting must be filed within 21 days of the distribution of the settlement funds and payment of attorneys' fees and provide the following information:

  • The total settlement fund, the total number of class members, the total number of class members to whom notice was sent and not returned as undeliverable, the number and percentage of claim forms submitted, the number and percentage of opt-outs, the number and percentage of objections, the average and median recovery per claimant, the largest and smallest amounts paid to class members, the method(s) of notice and the method(s) of payment to class members, the number and value of checks not cashed, the amounts distributed to each cy pres recipient, the administrative costs, the attorneys' fees and costs, the attorneys' fees in terms of percentage of the settlement fund, and the multiplier, if any;

  • If class members are entitled to non-monetary relief, such as discount coupons, debit cards, or similar instruments, the number of class members availing themselves of such relief, and the aggregate value redeemed by the class members and/or by any assignees or transferees of the class members' interests; and

  • If injunctive and/or other non-monetary relief was obtained, a discussion of the benefit conferred on the class.

While the guidance also states that the court may hold a hearing after the accounting is filed, payments to class members and payments of attorney's fees would already have been made when the hearing is held. The guidance says nothing about the court's ability to revisit the payments and the hearing appears intended to provide transparency and enable judges in future cases to better evaluate similar settlements when approval is sought.

Amendments to Federal Rule of Civil Procedure 23

The amendments make the following changes:

  • In addition to U.S. mail, a court can provide notice to Rule 23(b)(3) class members by "electronic means, or other appropriate means";

  • Parties must provide the court with "information sufficient to enable [the court] to determine whether to give notice of the [settlement] proposal to the class." In addition, the court must direct notice in a reasonable manner to all class members who would be bound by the proposal, if giving notice is justified by a likelihood of approval of the proposed settlement and class certification for the purpose of judgment;

  • The court must consider specific factors when determining whether a settlement is "fair, reasonable, and adequate" including: (1) the adequacy of class counsel and class representatives; (2) whether the proposed settlement was negotiated at arms' length; (3) the adequacy of the relief provided (considering the costs, risks, and delay of trial and/or appeal; the effectiveness of the proposed method of distributing relief, the terms of any proposed award of attorneys' fees, and any agreement required to be identified under Rule 23(e)(3)); and 4) whether class members are treated equitably relative to each other;

  • An objector must state his or her objection "with specificity," identifying whether the objection applies to the entire class, a specific subset of the class, or only to the objector. Also, the objector’s counsel must obtain court approval to receive payment or other consideration in connection with forgoing or withdrawing an objection, or forgoing, dismissing, or abandoning an appeal from a judgment approving a proposed settlement; and

  • A party may appeal an order granting or denying class certification, but not an order to give notice under Rule 23(e)(1).

Copyright © by Ballard Spahr LLPNational Law Review, Volume VIII, Number 312



About this Author

Kaplinksy, partner, New York, finance

Alan S. Kaplinsky is Co-Practice Leader of the firm's Consumer Financial Services Group, which has more than 115 lawyers. Mr. Kaplinsky devotes his practice exclusively to counseling financial institutions on bank regulatory and transactional matters, particularly consumer financial services law, and defending financial institutions that have been sued by consumers in individual and class action lawsuits and by government enforcement agencies. Visit Mr. Kaplinsky's profile in Wikipedia.

Burt M. Rublin, Philadelphia, Pennsylvania, Ballard Spahr, litigation, appellate, antitrust, class action, consumer financial services

Burt M. Rublin is the Practice Leader of the firm's Appellate Group. Mr. Rublin has a diverse practice, and for more than 35 years, he has successfully handled numerous significant appellate matters, as well as complex commercial litigation and class actions in state and federal courts around the country. He has substantial experience in defending consumer class actions brought against banks and credit card issuers involving a wide array of state and federal statutes. He also has considerable experience with the enforcement of arbitration clauses in consumer contracts and has prevailed on...