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Coupons, Clear Sailing, and Reverters: Another Settlement Bites the Dust in the 9th Circuit

In another of what seems like a string of decisions reversing district court approvals of class action settlements, the 9th Circuit, applying a three-factor test, held that vouchers offered as consideration to class members were coupons within the meaning of the Class Action Fairness Act, and that any award of attorneys’ fees must be based on the redeemed value rather than the face value of the vouchers. In McKinney-Drobnis v. Massage Envy Franchising, LLC, the court also characterized a provision allowing a defendant to retain excess amounts it had been willing to pay for attorneys’ fees as a disfavored “kicker” or “reverter,” a characterization that is consistent with 9th Circuit precedent but that may be inconsistent with how those terms are understood in other venues. 

©2022 Pierce Atwood LLP. All rights reserved.National Law Review, Volume XI, Number 344
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About this Author

Don Frederico, Litigation Attorney, Pierce Atwood Law Firm, Class Action Defense
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Don Frederico leads Pierce Atwood's class action defense practice, which received a National Tier One ranking in the 2017 and 2018 U.S. News-Best Lawyers "Best Law Firms" reports. A senior trial attorney with more than three decades of courtroom experience, Don has represented defendants in a wide array of class actions in federal and state court, including in such areas as consumer fraud, product liability, labor and employment, environmental and toxic torts, antitrust, and civil RICO. 

Don has represented clients in such industries as...

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