18th Annual Workplace Class Action Report - 2022 Edition

710 Annual Workplace Class Action Litigation Report: 2022 Edition pertinent case law authority within the Second Circuit. The Court reasoned that since the parties had engaged in litigation for 10 years and continued litigation could substantially increase the already significant amounts of time and resources the parties had devoted to this matter, the burden and risk of litigation outweighed the prospect of a settlement. The Court also ruled that the posture and nature of the negotiations supported a finding that the settlement agreement was fair and reasonable, as it was the product of an arm’s-length agreement reached before an experienced JAMS mediator. For these reasons, the Court granted preliminary settlement approval. Perdue, et al. v. Hy-Vee, Inc., 2021 U.S. Dist. LEXIS 135441 (C.D. Ill. July 31, 2021). Plaintiffs, a group of grocery store customers, filed a class action alleging that Defendant, a supermarket, maintained insufficient data security systems that allowed it to be subject to a data breach in which cyber thieves stole millions of credit card numbers. The parties ultimately settled the matter and the Court granted preliminary settlement approval. Following a fairness hearing, the Court granted final settlement approval with a modification to the requested attorneys’ fee award. The settlement provided class members with up to $225 for lost time and small expenses related to the data hack and up to $5,000 for "extraordinary expenses." Id . at *6. The settlement agreement also provided that Defendant would upgrade its security measures. The parties agreed that the cost of the security upgrades were over $20 million. At the hearing, the Court observed that not all of the firms that submitted bills provided adequate information, but given the reduced fee request from over $1 million, the Court was satisfied that Plaintiffs’ counsel provided sufficient information to justify the time spent for at least the requested $739,000 in costs and attorneys’ fees. Id . at *8. The Court found that the settlement agreement was fair, adequate, and reasonable. The Court granted final class certification for settlement purposes relative to a class consisting of “all persons residing in the United States who used a payment card to make a purchase at an affected Hy-Vee point-of-sale device during the Security Incident….” Id . at *10-11. The Court reasoned that the settlement was entered into in good faith following arm’s length negotiations, was non-collusive, and was in the best interests of the class. The Court also granted the named Plaintiffs $2,000 each as a service award for their efforts on behalf of the settlement class. For these reasons, the Court granted final settlement approval, as well as approval of attorneys’ fees and service awards. Prescott, et al. v. Bayer Healthcare LLC, 2021 U.S. Dist. LEXIS 82495 (N.D. Cal. April 29, 2021). Plaintiff, a consumer, filed a class action alleging that Defendant’s use of the term "mineral-based" on its sunscreen label deceived consumers into believing they contain only mineral active ingredients when they contained chemical active ingredients as well. The parties ultimately settled the matter with a provision on a cy pres fund, and Plaintiff filed a motion for preliminary settlement approval. The Court denied the motion on the basis that: (i) the proposed class release was overbroad, (ii) the parties lacked an explanation regarding a non-collusive relationship to the cy pres beneficiary, (iii) the justification for the settlement administrative expenses and attorneys’ fees request was inadequate; (iv) the proposed notice was incomplete, and (v) the settlement failed to comply with the required notice guidance regarding the claim form. First, the Court explained that the proposed releases contained sweeping language, and in contract, the proposed order for final approval attached to the settlement agreement specified that the claims to be released must arise out of, or relate in any manner to "the purchase of Coppertone sunscreen products that contain a ‘mineral-based’ label on or before (notice date).” Id . at *14. The Court ruled that it could not ascertain whether the class members knowingly waived certain protections. The Court therefore determined that the parties must more clearly explain the class members’ acknowledgment of the waiver and must narrow the scope of the released claims and parties. The Court observed that while the parties had designated Look Good Feel Better as the cy pres beneficiary, they failed to clearly explain how no collusion or conflict of interest existed. As to settlement costs, under the agreement, up to $530,000 plus postage would be paid from the settlement fund. The Court held that it could not determine if the amount was a fair and adequate distribution of settlement funds. The Court also concluded that the proposed notice forms provided incomplete notice to class members. Finally, the Court held that the settlement agreement failed to conform to the Northern District’s procedural guidance on claim forms dictating that the parties state in their motion for preliminary approval "an estimate of the number and/or percentage of class members who are expected to submit a claim in light of the experience of the selected claims administrator and/or counsel from other recent settlements of similar cases, the identity of the examples used for the estimate, and the reason for the selection of hose examples." Id . at *12-13. For these reasons, the Court denied Plaintiff’s motion for preliminary settlement approval.