18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 703 the Court awarded to the class representative an incentive award of $7,500 for her time and effort serving settlement class. Woznicki, et al. v. Raydon Corp., 2021 U.S. Dist. LEXIS 74699 (M.D. Fla. Feb. 17, 2021). Plaintiffs, a group of participants in Defendant’s employee stock ownership plan, filed a class action alleging that Defendant improperly profited off of sales to the plan in violation of the ERISA. The parties ultimately settled the matter and filed a motion for preliminary settlement approval. The Magistrate Judge recommended that the preliminary settlement approval be denied, and the Court adopted the Magistrate Judge’s recommendation. The Court found that the requested $10,000 incentive awards to the named Plaintiffs in the action were barred by binding Eleventh Circuit precedent, and thus could not be approved. The Court further agreed with the Magistrate Judge’s finding that the class definition and the settlement fund allocation fund must be amended in order to grant approval of the settlement. For these reasons, the Court rejected preliminary approval, but granted the parties leave to amend the proposed settlement and resubmit to the Court. (lxix) Settlement Administration Issues In Class Actions Birchmeier, et al. v. Caribbean Cruise Line Inc., 840 Fed. App’x 34 (7th Cir. 2021). Plaintiffs filed a class action alleging that Defendant placed unsolicited telephone calls to their cellular phones in violation of the Telephone Consumer Protection Act (“TCPA”). The parties ultimately settled the action, and the District Court granted final settlement approval and awarded attorneys’ fees. Following the process outlined in the settlement to determine how many illegal robocalls each class member received, the District Court resolved some issues and referred others to a claims administrator, whose decisions were reviewed by a Special Master assigned to the matter. Plaintiff Daisy Exum and Defendants took exception to parts of the decision. The Special Master held additional hearings to resolve those disputes. They subsequently instituted an appeal that contested two of the Special Master’s decisions, including: (i) handling the principal class-wide issues, and (ii) determining that class member Daisy Exum had received 15 robocalls rather than the 700 she claimed or the 250 the Master found. First, as to the Exum’s claim, the Seventh Circuit observed that Exum claimed she lost her phone bills proving the 700 calls made to her, and there would not have been any reason for Defendants to call Exum incessantly when they did not call anyone else nearly that often. Drawing on the numbers of calls proved by class members who retained records, the District Court estimated that Exum had been called 15 times. The Seventh Circuit found that the estimate was not clearly erroneous. In turn, Defendants’ arguments concerned the administration of the settlement’s presumption that class members who did not prove some different number of calls would be treated as having received three. Defendants asserted that only calls registered on the "class list" should count. Id . at 35. The District Court agreed with the Special Master that the class list had been compiled from incomplete records. The Seventh Circuit found that the District Court’s reasoning was not in err and it thereby affirmed the District Court’s ruling. In Re Chinese Manufactured Drywall, 2021 U.S. App. LEXIS 32240 (5th Cir. Oct. 27, 2021). Plaintiffs in this multi-district litigation (“MDL”) brought a class action alleging that Defendant’s gypsum wallboards emitted various sulfide gases, damaged structural, mechanical, and plumbing systems in their homes, and damaged other home appliances. The parties ultimately settled the matter and the District Court granted final settlement approval. The agreement divided the settlement class into three groups based on when a Plaintiff joined the litigation. Three individuals who objected to the settlement appealed their damages award to the Fifth Circuit on the grounds that class counsel placed them in the wrong Plaintiff group and the District Court failed to remedy the error, which led to a lower recovery than if they were placed in the correct group. The Fifth Circuit dismissed the appeal. It found that the claim was waived as part of the settlement agreement terms. After years of litigation, Defendant agreed to a $248 million class-wide settlement that used an allocation model to determine how the settlement funds would be distributed. Since there were three class actions that the settlement resolved, all at different stages of litigation, the funds were provided based on which class a Plaintiff was a party to within the settlement framework. Further, depending in which group they were placed, a class member would receive 100% of the damages calculated, 20%, or 5%. Plaintiffs asserted that they were left out entirely as class members, and once class counsel realized the mistake, the District Court granted them membership to the 5% recovery class. Plaintiffs, however, contended that they should have been part of the 100% recovery class. Plaintiffs filed a motion for relief from judgment under Rules 59(e) and 60(b) and requested that the District Court reclassify their class membership. The District Court denied the motion on the grounds that Plaintiffs’