A few months ago, I posted about a surprising decision of a divided panel of the Eleventh Circuit which held that incentive awards (a/k/a “service awards”) in class action settlements are prohibited by arguably analogous Supreme Court decisions from the 1880s. While we wait to see whether the Eleventh Circuit will grant a pending petition for rehearing en banc in Johnson v. NPAS Solutions, LLC, we should take note of a per curiam decision of the Sixth Circuit reaching a different result. In Shane Group Inc. v. Blue Cross Blue Shield of Michigan, 2021 WL 129067 (6th Cir., Jan. 14, 2021), the court rejected an objection to service awards to be paid to certain named plaintiffs, holding that they did not amount to an unlawful “bounty.” The Sixth Circuit thus implicitly rejected the reasoning of its sister court. In upholding the service awards, it held, “[o]n this record, . . . those payments correlate to the
As I hope my readers know, I write this blog to share insights and new developments concerning class action settlements and mediation with those who are engaged in, or thinking of embarking on, those paths. My goals are to help readers experienced in these areas to stay informed of important decisions and trends, and to demystify the class action settlement and mediation processes for those who are new to them.
Although it was never my goal to be considered for an award, I was pleasantly surprised to learn recently that the National Law Review has included me among this year’s recipients of its annual Go-To Thought Leadership Awards in the area of “Litigation: Class Action Mediation,” largely for my posts to this blog. The recognition (along with my innate interest in the area) will certainly keep me motivated to continue sharing my thoughts and legal updates on these pages. More information about the National Law Review’s awards can be found here.
The author presented the following paper at the 2020 Class Actions National Institute of the American Bar Association.
What makes mediating a class action different from mediating an individual case? In both settings, parties seeking to resolve their disputes agree to a non-binding process designed to get them to “yes.” In both settings, the parties engage a third-party neutral who will bring them together, then separate them, then bring them together again, employing a variety of techniques to reach an accord. And in both settings, the parties are usually represented by counsel who will advocate for them and advise them about the risks and probabilities they face.
So, again, what makes mediating a class action different from mediating an individual case? Plenty. Here are some of the key differences.
The Timing of the Mediation
Class action litigation shares many of the attributes of individual litigation. It begins with the filing of a complaint, is often
Fundamental to the ability to settle a class action is understanding the interests that are being represented by the parties and other stakeholders. Although any given case might present its own unique circumstances, in general the interests can be described as follows.
- Named Plaintiffs. The interests of the named plaintiffs are the most obvious and immediate, yet also can be viewed, and often are treated, as the least important. That’s because the named plaintiffs have chosen to serve as representatives of a larger group, and in so doing, have agreed to pursue the greater good rather than simply act in their own self-interest. That they have done so does not mean that they have relinquished their personal interests in the settlement; only that they have assumed a responsibility to look beyond them to support a settlement that is fair to everyone they seek to represent, which by sheer math dilutes their own stakes in the outcome. And because most named plaintiffs do not
Like most aspects of litigation, mediation is a very personal pursuit. So much depends on the credibility and communication skills of the participants. Equally important are the participants’ non-verbal cues, including tone of voice, facial expressions, and body language. And a key to success of many mediations is the ability of the mediator to develop a rapport and trust with all of the players. Just as online poker cannot truly replicate the in-person card game, so virtual mediation is not a perfect substitute for a mediation that takes place around an actual table.
Despite its deficiencies, virtual mediation has some advantages. If some participants are not located where the mediation is taking place, it can save them the time and cost of travel. It also may provide some greater flexibility in how the mediation is structured. And, of course, in times like these, there may simply be no alternative than to mediate online. But parties who do not have to go to the trouble and expense
I have been giving a lot of thought to the pros and cons of virtual mediation, and have been planning to post something here about that. In the meantime, my partner, Tom Dunn, has posted a very helpful piece about virtual mediation on our construction law blog. I still plan to add my two cents, but I couldn’t do a better job of describing many of the key differences between in-person and virtual mediations than Tom has done here. And “virtually” all of his observations apply equally to mediations of class action cases. So I give you this excellent and informative piece. I hope you find it as helpful as I did. https://www.solidfoundationconstructionlaw.com/2020/04/09/virtual-meditations-are-zooming-forward-jump-on-board/
In previous posts, I have discussed the roles of two of the players in class settlements: defense counsel and class counsel. For the third and final installment in this series, I will discuss the role of the third and most important player: the judge.
No class settlement can happen unless approved by a judge. Because most of the people affected by a class settlement are absent class members who are not before the court and have no real relationship with any of the attorneys, the judge has a special responsibility to protect their interests. That responsibility arises because of the potential for a conflict of interest between the named plaintiff and the named plaintiff’s counsel, on the one hand, and the class members who will be bound by the settlement, on the other. The process for settlement approval is designed to protect those absent class members from the risk of collusion between and among the named parties, in other words, the
In Part 1 of this series, I explained the role of defense counsel in class action settlements. In this Part 2, I will explore the role of class counsel.
I embark on this journey with some trepidation, because as a defense counsel myself I have always been on the outside looking in to the plaintiff’s side of the class action settlement process. However, I have settled enough class actions that I believe I can speak with some authority on the issues, even if a few of the details might get a bit blurred in the process.
As a starting point, class counsel must tackle the same tasks I described in Part 1 — negotiating the key terms, drafting the agreement, and seeking court approval — but has the lead role with respect to the latter. Like defense counsel, class counsel need to seek the best deal they can extract from the other side and that, at a minimum, will
Having experienced class action mediations both as advocate and as mediator, I have witnessed a variety of approaches to the mediation process, some helpful and some unhelpful. Here is a partial list of do’s and don’ts when representing parties to a class action mediation.
- DO come to the mediation fully prepared, knowing the strengths and weaknesses of your case and understanding the litigation risks to both sides. The risk analysis will depend in part on the stage of litigation during which the mediation occurs. For example, has the court yet ruled on the motion for class certification? If so, what is the likelihood that the court’s decision will withstand an appeal (if it hasn’t already gone through a Rule 23(f) appeal)? If not, how do you handicap the likelihood of class certification? Has summary judgment been briefed, argued, or decided? If not decided yet, what are the probabilities of success for each side? If plaintiffs prevail, what models are available for measuring damages,
Welcome to our newest blog, Class Action Settlements and Mediation! The purpose of this blog is to provide information about developments in the law of class action settlements, as well as practical tips for lawyers and parties mediating class actions and negotiating class action settlements. As many lawyers know, settling a class action is far more complex than settling a single-plaintiff lawsuit, and I hope that this site will become a useful resource for both plaintiffs’ and defendants’ attorneys undertaking that monumental task.
To kick it off, I have decided to link to a few posts from our website and our First Class Defense blog that offer guidance and legal updates relevant to class action settlements. If you find these links useful, you may also want to read my white paper on class action mediation, which you can find in the right-hand panel of this blog’s home page. Soon, I will be posting original material on the topics of class action settlements and mediation.