Class Action News

Tweaks to Class Settlements, Objections Go Live

Nov. 30, 2018, 10:04 PM

Class action practitioners will have new rules to follow when they get to work Dec. 3.

Changes to preliminary settlement approval, withdrawing objections, and class notice go into effect over the weekend.

The current form of the class action rule, Federal Rule of Civil Procedure 23, doesn’t mention preliminary approval.

The revised Rule 23 will refer to preliminary approval as the “decision to give notice” of the settlement to all interested parties.

The idea is to front-load the inquiry into a settlement so that judges will give more scrutiny at the start, not at final approval.

The amendment codifies the criteria judges should consider when approving class settlements, including how attorneys’ fees for class counsel will be calculated and how money will be distributed to the class.

Another change would require any side payments to class settlement objectors—sometimes known as “greenmail”—to be approved by the district court. This is an effort to curb the power objectors hold over the class settlement process

Objections must be specific about who the objection applies to and exactly what in the settlement is problematic. This change is meant to combat boilerplate objections while not overburdening objectors who aren’t represented by counsel.

The rule changes also acknowledge that email and other electronic means of communication may be the best way to send notice of certification or settlement to class members.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Cheryl Saenz at csaenz@bloombergtax.com

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