Cy pres settlements, objectors, quick-pay provisions, and the Rule 23 amendments are some of the most impactful aspects of class action. Even where there is consensus on these issues, the latest research report by Western Alliance Bank’s Settlement Services Group revealed the intricacies that judges, attorneys, claims administrators and mediators grapple with concerning these elements.
Those research findings are the subject of a new CLE-eligible webinar, “Cy Pres. Objectors. Quick-Pay: Complex Issues, Nuanced Perspectives,” which can be viewed on-demand below.
The webinar focused on the report’s findings, further analyzing the evolution of class action litigation and shedding light on where the industry goes from here.
I had the honor of moderating this conversation featuring a panel of prominent legal authorities, including the Honorable Robert M. Dow, Jr. (U.S. District Court, Northern District of Illinois), Alexandra Bernay (Partner, Robbins Geller Rudman & Dowd LLP), Nancy R. Thomas (Partner, Morrison & Foerster) and Randi S. Ellis (Dispute Resolution and Settlement Consulting Attorney).
Here are the webinar’s key takeaways:
Cy pres settlements should be considered on a case-by-case basis—but maximizing proceeds for the class should be the primary goal:
A majority of survey respondents – and 80% of attorneys – say cy pres settlements should be considered case-by-case due to several challenges.
“On one end of the spectrum, there is a minimal number of cases where parties are proposing cy pres as the entire form of monetary relief,” said Thomas, Partner at Morrison & Foerster. “On the other end of the spectrum, cy pres is issued to deal with residual funds. And, in the middle, there are cases where class members are going to make claims for funds, and whatever remains is going to go to a cy pres recipient.”
“Professional” objectors are viewed with skepticism, but good-faith objectors are seen as valid and good for the system:
Objectors to class action settlements generate strong feelings and heated debate, and while all segments of survey respondents found that objectors played valid, even valuable roles in class action litigation, what differentiates between good- and bad-faith objections remains subjective.
“Good-faith objections are extremely specific, calling the court and parties’ attention to something that might have been missed. These objections make the class action field stronger,” said Bernay. “But copy-and-pasted objections, without reference to the specific litigation, are more difficult to deal with and hard to find meritorious.”
“Everyone is inconvenienced by bad objections, and everyone is benefitted by good objections — and, as judges, we understand that our role is to decide between good and bad objections,” said Judge Dow. “If an objection is not stated with specificity, as outlined in the Rule 23 amendments, I should deem it to waived.”
Quick-pay provisions have become increasingly popular over the past several years:
Nearly two-thirds of respondents say they have been personally involved in a class action that used quick-pay, and just 5% of plaintiffs’ attorneys say their firm has never used one.
The impacts of the Rule 23 amendments are viewed with increasing positivity by all stakeholders:
More than two years after implementing the amendments to Rule 23, perceptions among all the stakeholders represented in the survey remain overwhelmingly favorable (84%) and have actually increased since our 2020 research report on the amendments.
“I’m very happy with the survey results – every time we amend the rules, we hope it’s doing service to the bar and the bench,” said Judge Dow. “That’s why when we address the rules, we invite stakeholders, go to conferences, take public comment, and vet through rules committees, courts and congress.”
“The Rule 23 amendments capture best practices and are so helpful for courts and attorneys,” said Ellis. “Electronic notice, in particular, is a game-changer.”
While the vast majority of respondents are pleased with the positive direction of the reforms, there is also agreement that the system would benefit from further changes.
“One challenge is the rise in class actions in the privacy sector – more class actions where there are large statutory damages,” said Thomas. “This is an area we are seeing on the rise and will need more focus moving forward.”
“We are always open to rules proposals,” concluded Judge Dow.
To download the new report, “Cy Pres. Objectors. Quick-Pay: Complex Issues, Nuanced Perspectives,” and learn more about the findings, please click here.
To receive MCLE credit, click here and enter the requested information. To download the handouts from this webinar, click here.
Western Alliance Settlement Services, a national banking group within Western Alliance Bank, Member FDIC, specializes in banking for law firms, claims administrators and related businesses managing class action, mass tort and bankruptcy settlements across the country. Relationship bankers bring clients years of experience and offer outstanding service to support all phases of the settlement process, from escrow to distribution, with a single point of contact. Part of top-performing Western Alliance Bancorporation, with more than $65 billion in assets, the Settlement Services group has the reach, resources and deep industry knowledge that make a difference for customers.