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Class Action Notice Requirements:

Challenges for Plaintiffs and Defendants Leveraging Electronic and Media Notice Efficiencies; Meeting Plain Language and CAFA Requirements

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TUESDAY, JULY 31, 2012

Presenting a live 90-minute webinar with interactive Q&A

Matthew M. Walsh, Partner, Winston & Strawn, Los Angeles

Shannon Wheatman, Vice President, Kinsella Media, Washington, D.C.

Paul G. Karlsgodt, Partner, Baker Hostetler, Denver

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Traditional and Non-Traditional Options in Class Action Notice

Month Day, 2012

Shannon Wheatman, Ph.D.

Kinsella Media, LLC

202.379.1150

[email protected] 5

mailto:[email protected]

• Long Form

• Summary

• Postcard

• Email

• TV

• Radio

• Magazines

• Newspapers

• Banners

• Keyword

Search

• Mobile

• Social Media

Traditional

Internet

Emerging Notice

Reaching Class Members

When comprehensive lists of class members exist,

direct mail (by post or email) should be the primary

method used for notification.

Additional noticing efforts (including paid media)

must be undertaken when comprehensive lists are

not available.

7

Source: MPA,

Newspapers

Magazines

Radio Stations

TV Stations

Apps

Websites

"Our ability to produce media has outstripped our ability

to consume it."

David Carr

The New York Times

Sept. 6, 2010

2,300

3700

500

--

--

--

1,400

7,100

9,600

2,300

250,000+

200 million

Source: MPA, Netcraft, FCC.

Media Options Exploding

8

Traditional Media Remains Dominant

92.6% of adults watch TV

Watch an average of 4.5 hours per day

92% of adults read magazines

On average, read 10 magazines per month

50% of adults 45+ read a Sunday newspaper

31% of adults 25-44 read a Sunday newspaper

9

Print

Radio

Television

Internet

Mobile

Outdoor

Media Fragmentation

10

Re-inventing the Business Model

Online

Print Edition

Digital Edition

With Time Everything Evolves

11

The Online Landscape

176 million unique visitors 18+ in June

2012

Total online usage averages just over 1

hour per day for each user

650 billion pages visited per month

12

Online Advertising

Display

• Website

• Banners, Text, Video

Search

• Keyword Sponsorships

• Text Ads

13

Online Advertising: Display

Display advertising is served to site visitors along

with content

14

Contextual Targeting

Behavioral Targeting

Online Capabilities

Behavioral Targeting is the ability to

serve online advertising based on

profiles from an individual user’s

viewing behavior.

Example: User browses sports content

from different websites, and is served

with a banner regarding razors for

men.

Contextual Targeting serves

advertising messages based on

content being viewed on an

individual Web page.

Example: User is browsing within

the food category and gets a banner

message regarding a sale on a food

product.

Contextual Targeting

15

Mobile Phones

6 billion globally

234 million users in United States (53%

Smart Phones)

43% of users access mobile Internet

Mobile Internet usage expected to overtake

computer access in 2014

16

Social Media

65 million adults visit daily

Heaviest users teens and young adults

Use for text ads but limited utility otherwise

Facebook

41 million monthly visitors

40% of users are 12-34

Promotional tweets

Twitter

181 million blogs on the Internet

Highly targeted to narrow niches

Uncontrolled content

Blogs

17

Facebook Ad Placement

18

Connect & Share – Other Options

19

Text Messaging – another way to continue the

conversation with interested class members.

QR Codes – extend the information you provide in a notice (video, sound clip, online claim form)

Traditional Media Trumps New Media for Mass Reach

Traditional

• Mass audiences for national and state-wide settlements

Internet

• Display Banner advertising a contributing component

• Keyword sponsorship to facilitate search

Emerging

• Niches to complement mass media

• Will evolve in the future

20

Due

Process

Direct Notice

21

Due

Process

Direct Notice

Magazines Newspapers TV/Radio

22

Due

Process

Direct Notice


Internet: Display, Contextual, Behavioral

23

Due

Process

Direct Notice



Third Party Outreach

Keyword Search

Earned Media

24

Due

Process

Direct Notice




Keyword Search

Earned Media

Emerging Media – Mobile, Social Media

25

Due

Process

Direct Notice




Keyword Search

Earned Media

Emerging Media – Mobile, Social Media

Due Process

26

Due Process

“But when notice is a person’s due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.”

Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 315 (1950). Rule 23 can “comport with constitutional standards of due process only if there is a maximum opportunity of notice to the absentee class members . . .”

Greenfield v. Villager Indus., Inc., 483 F. 2d 831

(3d Cir. 1973).

27

Court Reactions to Non-Traditional Notice

Courts have long accepted traditional paid media as

a form of adequate notice:

“It is well settled that in the usual situation first-class mail and

publication in the press fully satisfy…notice requirements

…and the due process clause.” Zimmer Paper Prods., Inc. v.

Berger & Montague, P.C., 758 F.2d 86, 90 (3d Cir. 1985).

New media and other non-traditional options that

come in as supplemental elements to a broader

based media program have not been questioned.

28

Questions?

Shannon Wheatman, Ph.D.

Vice President

Kinsella Media, LLC

202.379.1150

[email protected]

29


© 2012 Baker & Hostetler LLP

Paul Karlsgodt 303.764.4013

[email protected]

Casie Collignon

Plain Language in

Class Action Settlements

The Struggle Between Simplicity and Accuracy


31 Baker Hostetler

Rule 23’s Plain Language

Requirement FRCP 23(c)(2)(b) - Notice

For any class certified under Rule 23(b)(3), the court must direct to class members the

best notice that is practicable under the circumstances, including individual notice to all

members who can be identified through reasonable effort. The notice must clearly and

concisely state in plain, easily understood language:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through an attorney if the member so

desires;

(v) that the court will exclude from the class any member who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members under Rule 23(c)(3)

32 Baker Hostetler

Constitutional Plain Language

Requirement

• Kaufman v. American Exp. Travel Related Services, Inc., 2012 WL 2401671

(N.D. Ill. 2012) (“Class members are entitled to the best practicable notice,

not just because the Rules require it, but ‘as a matter of due process.’”,

quoting Lemon v. Int'l Union of Operating Eng'rs, Local 139, 216 F.3d 577,

580 (7th Cir. 2000)).

• Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) (“An

elementary and fundamental requirement of due process ... is notice

reasonably calculated, under all the circumstances, to apprise interested

parties of the pendency of the action and afford them an opportunity to

present their objections.”).

33 Baker Hostetler

The Risks of Unclear Notice

• Preliminary approval denied

• Costs to defend against objectors

• Costs to re-issue notice

• Portions of settlement modified after fairness hearing

(e.g. fees)

• Rejection of settlement in its entirety after fairness

hearing

• Failure to get the benefits of the class action settlement

release

34 Baker Hostetler

Preliminary Approval Denied

• In re Cadence Design Systems, Inc. Securities Litig., No.08-cv-04966 (N.D.

Cal. Aug. 26, 2011)

– Preliminary approval of the settlement and certification of the class was

denied because the court was not able to determine whether the

proposed Notice was adequate, in part, because the parties did not

submit an example of one of the notices that was to be sent to

claimants.

35 Baker Hostetler

Plain Language Objections

• Objection filed by the Center for Class Action Fairness LLC, In re Pampers Dry Max Litig., No. 10-cv-00301 (S.D. Ohio Aug. 29, 2011)

– Objector claimed that neither the Notice nor the settlement disclosed the total amount that would be sought in incentive awards or the identity the cy pres recipient.

• Brief of Objector, In re: Baby Products Antitrust Litig., Nos. 12-cv-1165, 12-cv-1165(L); 12-cv-1166; 12-cv-1167 (E.D. Pa. April 24, 2012)

– Objector noted that neither the Notice nor the settlement identified the cy pres recipients; instead the settlement agreement stated that the plaintiffs and defendants would each recommend two recipients to the court at a future date.

– Objector also noted that the Claim Form did not provide a complete list of all methods that could be used to provide proof of purchase necessary for entitlement to settlement proceeds.

• Objection filed by Public Citizen Litigation Group, Duhaime v. John Hancock Mut. Life, Ins. Co., No. 96-cv-10706 (D. Mass. Oct. 2, 1997)

– Objector claimed that both the pre and post settlement Notices did not adequately inform class members of the nature, value, and significance of the relief or that certain class members would waive future claims unless they submitted a claim in the settlement.

36 Baker Hostetler

Notice Had to Be Reissued

• Kaufman v. American Exp. Travel Related Services, Inc., 2012 WL 2401671

(N.D. Ill. 2012)

– Court noted that generally, “[w]here notice to a class has been inadequate, it

may be appropriate to reject the settlement in its entirety.”

– However, instead of rejection, the Court appointed “an expert in class

notification, as advised by the Federal Judicial Center's Class Action Checklist

2010.”

– Court also ruled that after “receiving the expert's report, the court will then order

the Settling Parties to undertake a second round of notice, the form and content

of which will be determined by the expert's recommendations.”

37 Baker Hostetler

Modifications to Settlement

After Fairness Hearing • In re Excess Value Insurance Coverage Litig., 598 F. Supp. 2d 380 (S.D.

N.Y. 2005)

– Court denied Plaintiff’s motion for incentive compensation to the class

representatives because the long form and short form Notice failed to mention it.

• Montgomery v. Aetna Plywood, Inc., 231 F.3d 399, 410 (7th Cir. 2000)

– Court affirmed denial of incentive fee, in part because of “counsel's failure to

include” adequate information about the request “in the most recent notice to the

class.”

38 Baker Hostetler

Rejection of Settlement in its

Entirety • Orrill v. AIG, Inc., 38 So. 3d 457 (La. Ct. App., 4th Cir. 2010)

– Court vacated settlement approval, in part, because “most lay persons do not know what res judicata means” and therefore class members would not understand that by not opting out of one case, their claims would not be litigated in another and they could lose thousands of dollars.

• Larson v. Sprint Nextel Corp., 2009 WL 1228443, 10 (D.N.J. 2009) – Court rejected settlement because “it failed to apprise class members of their right to opt out

of the action. Telling an individual that he may be part of a certified class that has a claim for damages in a class action settlement is markedly different from informing that individual not only that he might be a member of a certified settlement class but that his failure to opt-out of the action eliminates his future right to ever bring that claim.”

• In re Veritas Software Corp. Securities Lit., 496 F.3d 962 (9th Cir. 2007) – Court vacated final approval of settlement, ruling: “The notice in this case clearly did not

satisfy the requirements of the PSLRA….The notice said that recovery could be greater if fewer than expected class members filed claims, saying in no uncertain terms ‘you could get more money,’ but gave no indication of the possibility that recovery could be less if more class members than expected filed claims. In the absence of any disclosure to the contrary, a reasonable class member would conclude that the per share estimates were based on all of the class members filing claims.”

• Greenfield v. Villager Indus., 483 F.2d 824 (3d Cir.1973) – Court vacated class action settlement, in part, because the form of notice did not provide a

long enough period for a claimant to be properly notified of their opportunity to object and appear at the hearing.

39 Baker Hostetler

Insufficient Notice Prevented

Release • Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1228 (11th Cir. 1998)

– Language of class action notice was insufficient to notify present plaintiff that

claims like his were being litigated in the action, and thus claim preclusion could

not be applied consistent with due process.

• Bogard v. Cook, 586 F.2d 399, 408 (Miss. App. 1978)

– Plaintiff's claims for money damages were not precluded by judgment in prior

class action awarding injunctive and declaratory relief when class notice did not

alert him to possibility that he could seek individual money damages.

40 Baker Hostetler

Strategies for a Successful

Plain Language Notice

41 Baker Hostetler

Strategies for a Successful

Plain Language Notice • Include the basic information required under Rule 23.

• Avoid legalese (How would you speak to your best non-lawyer friend?).

• Be short and to the point; longer is rarely better.

• Avoid specific language that may be confusing; opt for a more general approach to describe relevant settlement terms.

• Avoid unnecessary words, use active voice, and avoid footnotes.

• Follow the FJC guidelines and use its checklist.

• Hire an expert.

– Federal Judicial Center, Judges Class Action Notice and Claims Process Checklist & Plain Language Guide, 1–2 (2010) (“In order to find the ‘best practicable’ notice as Rule 23 requires, your own expert report may be advisable. This is especially true in the diminished adversarial posture in which settlement places the parties.”)

– Loef v. First Am. Title Ins. Co., No. 2:08–cv–311, 2012 WL 640887, at *1 (D. Me., Feb. 28, 2012) (“[I]t would have been wholly insufficient for Plaintiff to propose a plan of notice by publication without including a declaration of a professional with credentials similar to Dr. Wheatman's.”)

42 Baker Hostetler

FJC Checklist Items for

Plain Language Do the notices contain sufficient information for a class member to make an informed decision?

Consider the amount of information provided in the notice. Watch for omission of information that the lawyers may wish to

obscure (such as the fee request) but that affects class members nonetheless.

Do the notices include the Rule 23 elements? Even the summary notice?

Summary notices, whether mailed or published, encourage readership, and the FJC illustrative notices show that even

summary notices can include all elements required by Rule 23(c)(2)(B). But an overly short summary notice, one that mostly

points interested readers to a detailed notice, can result in most class members (who read only the summary notice) being

unaware of basic rights.

Have the parties used or considered using graphics in the notices?

Depending on the class definition or the claims in the case, a picture or diagram may help class self‐identify as members, or

otherwise determine whether they are included.

Does the notice avoid redundancy and avoid details that only lawyers care about?

It is tempting to include “everything but the kitchen sink” in the detailed notice. Although dense notices may appear to provide a

stronger binding effect by disclosing all possible information, they may actually reduce effectiveness. When excess information

is included, reader burnout results, the information is not communicated at all, and claims are largely deterred.

Is the notice in “Q&A” format? Are key topics included in logical order?

The FJC illustrative notices take the form of answers to common questions that class members have in class action cases. This

format, and a logical ordering of the important topics (taking care to include all relevant topics) makes for a better

communication with the class.

Are there no burdensome hurdles in the way of responding and exercising rights?

Watch for notice language that restricts the free exercise of rights.

43 Baker Hostetler

For further study

• FJC Class Action Notices Page, http://www.fjc.gov/.

• Bruce D. Greenberg, Keeping the Flies out of the Ointment: Restricting Objectors to

Class Action Settlements, 84 St. John’s L. Rev. 949 (2010).

• Paul Karlsgodt & Raj Chohan, Class Action Settlement Objectors: Minor Nuisance or

Serious Threat to Approval? 12 Class 744, (BNA Class Action Lit. Rep., August 12,

2011), http://classactionblawg.files.wordpress.com/2011/09/bnaartic.pdf.

• Shannon R. Wheatman & Terri R. LeClercq, Majority of Class Action Publication

Notices Fail to Satisfy Rule 23 Requirements, 30 REV. LITIG. 53 (2011).

• Todd B. Hilsee, Shannon R. Wheatman & Gina M. Intrepido, Do you really want me

to know my rights? The ethics behind due process in class action notice is more than

just plain language: A desire to actually inform. GEO J. LEGAL ETHICS, 18 (4), 1359-

1382 (2005).

http://www.fjc.gov/

http://classactionblawg.files.wordpress.com/2011/09/bnaartic.pdf

CAFA Notice Requirements

Matthew M. Walsh

Partner, Winston & Strawn

(213) 615-1865

[email protected]

© 2012 Winston & Strawn LLP 45

Presentation Overview

• Basics of the CAFA Settlement “Notice to Regulators”

Requirement

• Why Does Notice Matter?

• Consequences of Failure to Give Notice

• Planning for Class Membership Disclosure

• CAFA Applies to Every Class Action in Federal Court

• What Do Regulators Do After Receiving Notice?

• Supplemental Notice


The Basics

• The CAFA Notice Requirement is at 28 U.S.C. § 1715(b)

• Within 10 days after filing a proposed class action

settlement, each defendant must serve notice upon the

“appropriate Federal Official” and the “appropriate State

Official.”

• NOTE: CAFA obliges each defendant to serve this notice

– there is no such obligation for the plaintiff.


The Basics

(cont’d)

• “Appropriate Federal Official”

• Usually, the Attorney General of the United States.

• For Federal and State depository institutions, depository holding

companies, foreign banks, and subsidiaries of the above, notice

goes to the appropriate Federal regulator or supervisor.

• EXCEPT: if the class action is not about their banking activities.

• For example, in a class action alleging discriminatory hiring by a

bank, notice would go to the Attorney General.


The Basics

(cont’d)

• “Appropriate State Official”

• State official who regulates, supervises, or licenses defendant’s

activity, or otherwise authorizes them to conduct business.

• EXCEPT: if the class action is not about activity subject to regulation

or supervision by this official.

• If there is no such official, then notice goes to the state Attorney

General.

• NOTE: defendant must notify the appropriate state official in

each state where a class member lives. 28 U.S.C. § 1715(b).


The Basics

(cont’d)

• Practice Tip

• CAFA states that Federal depository institutions meet the

requirement just by serving notice on their Federal regulator.

• 28 U.S.C. § 1715(c)(1).

• For banking organizations supervised by the Federal Reserve,

the Fed’s guidance is that notice should also go to the

defendant’s state bank supervisor, if any.


The Basics

(cont’d)

• Notice consists of:

1. The complaint, any amended complaint(s), and all materials

filed with the complaint(s);

2. Notice of any scheduled judicial hearing in the class action;

3. Any proposed or final notification to class members about

(1) their opt-out rights, if any, or (2) a proposed settlement;

4. Any proposed or final class action settlement;

5. Any settlement or other agreement between class counsel and

defense counsel;


The Basics

(cont’d)

• Notice consists of (cont’d):

6. Any final judgment or notice of dismissal;

7. “If feasible,” the names of class members who reside in each

state, plus the estimated proportionate share of their claims to

the total, to the appropriate State official. If not feasible, then a

“reasonable estimate” of the number of class members in each

state and their estimated proportionate share of the total

settlement; and

8. Any written judicial opinions in the case regarding numbers 3-6

above.

• 28 U.S.C. § 1715(b)(1) – (8).


Why Does Notice Matter?

• One practical reason:

• A Federal court cannot approve a final class action settlement

until 90 days after defendant serves notice on the appropriate

Federal and State regulators.

• 28 U.S.C. § 1715(d).


Why Does Notice Matter?

(cont’d)

• Legislative Policy Goal:

• “New section 1715 is designed to ensure that a responsible state

and/or federal official receives information about proposed class

action settlements and is in a position to react if the settlement

appears unfair to some or all class members or inconsistent with

applicable regulatory policies.”

• S. Rep. No. 109-14, at 32 (2005).

• The underlying concern is class action abuse, in which attorneys

arrange coupon settlements that provide them large fees but

create little deterrence or public benefit.

• Id. at 33.


Consequences of Failure to Give Notice

• “A class member may refuse to comply with and may

choose not to be bound by a settlement agreement or

consent decree in a class action if the class member

demonstrates that the notice required under subsection

(b) has not been provided.”

• 28 U.S.C. § 1715(e)(1).

• This language means that if defendant does not provide the

required notice, even a class member who received notice of the

settlement, and who failed to opt out, can later choose not to be

bound.

• Upshot: CAFA compliance is key to the integrity of

settlement agreements.


Planning for Class Membership Disclosure

(Overview)

• The key requirement – notice to state officials

• Providing names or estimating numbers

• Which states?

• Unsettled law – mobile class members

• Legislative history

• One approach: last known address

• Most prudent (but most costly) approach



• Most significant notice requirement: providing to each

state official the names of class members in their state “if

feasible” plus their estimated share of the settlement. If

that is not feasible, a “reasonable estimate” of the

number of class members in their state, plus their

estimated share of the settlement.

• 28 U.S.C. § 1715(b)(7).

• Because CAFA requires defendant to serve notice within

10 days of filing the proposed settlement, work on the

notice must begin in parallel with settlement

negotiations.



(cont’d)

• Determining the name and location of each class

member will be infeasible in many cases, so a

reasonable estimate will frequently be needed.

• CAFA provides no definition of a “reasonable estimate”

of the number of class members in each state.

• Prudent defense counsel should hire an economist to make this

estimate, and should ensure the economist is available to testify

if the settlement is challenged.



(cont’d)

• What happens if class members move to different

states?

• E.g. Statewide class action filed under California law, but some

class members may have moved to other states by the time the

parties agree and file a proposed settlement.

• Can such people choose not to be bound if defendants

do not serve their new state’s Attorney General with

notice?

• Does every class action now effectively require notice to

state officials in all 50 states?



(cont’d)

• There is no case law on this so far, but legislative history

suggests not:

• “The [Senate Judiciary] Committee wishes to make clear that [28

U.S.C. § 1715(e)(1)] is intended to address situations in which

defendants have simply defaulted on their notification obligations

under this provision; it is not intended to allow settlement class

members to walk away from an approved settlement based on a

technical noncompliance (e.g. notification of the wrong person,

failure of the official to receive notice that was sent), particularly

where good faith efforts to comply occurred.”

• S. Rep. No. 109-14, at 35.

• (Available online at http://www.gpo.gov/fdsys/pkg/CRPT-

109srpt14/pdf/CRPT-109srpt14.pdf).



(cont’d)

• Some defendants are successfully using class members’

last known address, and filing a “Declaration of

Compliance” with the court.

• Thieriot v. Celtic Ins. Co., 2011 WL 109636 (N.D. Cal. Jan. 13,

2011).

• California state law claims only; notice sent to 21 states.

• Hopson v. Hanesbrands Inc., 2008 WL 3385452 (N.D. Cal. Aug.

8, 2008).

• California and federal Claims; notice sent to 34 states.

• Garner v. State Farm Mut. Auto. Ins. Co., 2010 WL 1687832

(N.D. Cal. Apr. 22, 2010).

• California state law claims only; notice sent to 42 states.



(cont’d)

• Until there is judicial guidance on this, when in doubt the

most prudent course is to cover your bases and notify all

50 states, plus Puerto Rico and the District of Columbia.

• CAFA allows the complaint, all attached materials, and

any amended complaints to be distributed electronically

through the Internet, which will reduce costs.

• 28 U.S.C. § 1715(b)(1)


CAFA Applies to Every Class Action in

Federal Court

• The CAFA notification requirements apply to:

• [A]ny civil action filed in a district court of the United States under

rule 23 of the Federal Rules of Civil Procedure or any civil action

that is removed to a district court of the United States that was

originally filed under a State statute or rule of judicial procedure

authorizing an action to be brought by 1 or more representatives

as a class action.

• 28 U.S.C. § 1715(a)(2)

• Upshot: even though CAFA is famous for making

removal easier, its notification requirements apply to

class actions in federal court under any theory.


What Do Regulators Do After Receiving Notice?

• CAFA does not expand the authority of state or federal

officials, nor does it give them new duties.

• 28 U.S.C. § 1715(f).

• Federal and state officials have time to comment and

object to proposed settlements during the mandatory 90-

day waiting period.

• Laguna v. Coverall N. Am., Inc., 2012 WL 607622 at *2 n. 4 (N.D.

Cal. Feb. 23, 2012) (describing the 90-day period after notifying

federal and state officials as a “window” during which they

should respond if they plan to do so).



(cont’d)

• Federal and/or state officials may attempt to upset the

settlement through the objection process.

• Garner v. State Farm Mut. Auto. Ins. Co., 2010 WL 1687832 at

*14 (N.D. Cal. Apr. 22, 2010) (“CAFA presumes that, once put on

notice, state or federal officials will raise any concerns that they

may have during the normal course of the class action

settlement procedures.”).

• Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292 (S.D.

Fla. 2007) (denying final approval to a coupon settlement, based

in part on objections by the attorneys general of 35 states and

the District of Columbia).



(cont’d)

• Wilson v. DirectBuy, Inc., 2011 WL 2050537

(D. Conn. May 16, 2011).

• Members-only discount shopping club sued for failing to offer

supplier’s prices to its customers, as promised.

• Club membership requires initial sign-up fee of several thousand

dollars, plus $200 annual renewal.

• Proposed settlement releases claims in exchange for giving

each class member two free months’ membership.

• Attorneys General of 39 states file amicus brief objecting to this

settlement.

• Court denies settlement, finding Attorneys General opposition

undermines substantive fairness claims.



(cont’d)

• Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292

(S.D. Fla. 2007).

• False advertising class action based on air purifier.

• Parties submit proposed settlement to the court, providing

each purchaser a $19 merchandise credit usable only at

Sharper Image.

• Attorneys General from 35 states and DC file a motion for

leave to file an amicus brief opposing the settlement –

additional opposition filings as the settlement is amended.

• Court finds this opposition undermines the parties’ assertion

of substantive fairness, and denies settlement.



(cont’d)

• True v. Am. Honda Motor Co., 749 F. Supp. 2d 1052

(C.D. Cal. 2010).

• Suit under California UCL/FAL, Consumer Legal Remedies Act,

and common law unjust enrichment.

• Suit claimed that the Honda Civic Hybrid did not achieve the

advertised miles per gallon.

• Proposed settlement of $1,000 credit toward purchase of a

Honda or Acura during the next 19 months, plus $100 cash for

those customers who previously made a documented complaint.

• Consolidated amicus brief opposing the settlement filed by

officials in 26 states.

• Court rejects settlement, finding that state opposition “weighs

against approval of the settlement.”


Supplemental Notice

• CAFA contains no requirement for supplemental notice

to State and Federal regulators if settlement terms

change, but prudent counsel should send supplemental

notice if there is a material change after initial notice is

served.

• Garner, 2010 WL 1687832 at *17 (N.D. Cal. Apr. 22, 2010)

(stating that defendant provided supplemental notice following

the court’s Preliminary Approval Order and revisions to the

Settlement Notice).


Summary

• CAFA’s notice requirements:

• Apply to every class action in federal court;

• Deliberately invite state and federal officials to intervene in the

settlement process; and

• Impose logistical challenges that require advance planning.

• An expert may be needed to create a “reasonable

estimate” of the number of class members in each state.

• Until there is judicial guidance on the problem of mobile

class members, defense counsel should err on the side of

notifying too many state officials, rather than too few.

• Supplemental notice is advisable if the settlement terms

change materially.

Documents

Class Action Notice Requirements: Challenges for ...media.straffordpub.com/products/class-action-notice-requirements... · Class Action Notice Requirements: Challenges for Plaintiffs