A deal resolving claims that online consumers were automatically enrolled in a rewards program will stand, but the $8.7 million fee for class counsel must be recalculated, the Ninth Circuit held Oct. 3.
Attorneys’ fees in coupon settlements must be based on the redemption rate of the coupons, not their full face value, Judge Michelle T. Friedland wrote for the U.S. Court of Appeals for the Ninth Circuit.
The district court got the “multi-million dollar question” wrong when it found that the defendant’s $20 credits aren’t coupons under the Class Action Fairness Act, the appeals court said.
The suit alleged that defendants Provide Commerce Inc. and Regent Group Inc. unlawfully enrolled online consumers in a rewards program and charged them a monthly fee when they accepted a $15 “thank you” gift.
The settlement provided $12.5 million in cash plus $20 merchandise credits sent automatically to class members even if they don’t submit a claim. If all class members use the $20, the total settlement would be worth $38 million.
The district court improperly based the fee award on the $38 million figure, the appeals court said, accepting the argument of objector Brian Perryman.
But the court disagreed with Perryman’s other objections to the deal. It affirmed the settlement but ordered the lower court to recalculate the attorneys’ fees.
Judges N. Randy Smith and Barbara M.G. Lynn, sitting by designation from the U.S. District Court for the Northern District of Texas, joined the opinion.
Steckler Law Group LLP, Andrus Anderson LLP, and others represented the class.
The Competitive Enterprise Institute’s Center for Class Action Fairness represented the objector.
Cooley LLP represented Provide Commerce. Myron M. Cherry & Associates in Chicago represented Regent Group.
The case is In re Easysaver Rewards Litig., 2018 BL 363698, 9th Cir., No. 16-56307, 10/3/18.