Court Grants Final Approval of Rams PSL Settlement

Deadline for PSL Owners to File Claims is August 23, 2019. On June24, 2019, U.S. District Judge Stephen N. Limbaugh Jr., granted final approval of the $24 million class action settlement for purchasers of personal seat licenses (PSLs) for the former St. Louis Rams football team. During the hearing, Judge Limbaugh noted that this was… Continue reading

Deadline for PSL Owners to File Claims is August 23, 2019.

On June24, 2019, U.S. District Judge Stephen N. Limbaugh Jr., granted final approval of the $24 million class action settlement for purchasers of personal seat licenses (PSLs) for the former St. Louis Rams football team.

During the hearing, Judge Limbaugh noted that this was a “hotly contested case” that was “resolved in a satisfactory way.”

“Nearly 50% of class members have already filed claims, and PSL holders still have two more months to file their claims,” said Kevin Green, attorney with Goldenberg Heller & Antognoli.  The deadline to file claims is August 23, 2019.  Claims may be filed online at www.RamsPSLClassActionSettlement.com.

What are PSL holders getting?

Payments to class members are based on 30-percent of the price paid for each PSL, which represents a full-reimbursement equivalent for the nine years remaining on the 30-year PSL contract when the Rams moved to Los Angeles after the 2015 season.

PSL Tier Price
Pay-Out for Each PSL
$250
$75
$500
$150
$1,000
$300
$2,500
$750
$3,000
$900
$4,500
$1,350

Who qualifies for a refund?

PSL contracts were initially sold by an entity called “Fans, Inc.”  In April 1996, the Rams started selling PSLs directly.  The settlement includes purchases made both through Fans, Inc. and the Rams.

 If you purchased a PSL from FANS, Inc., directly from the Rams, or from another PSL holder at any time, and if you never received a written cancellation notice from the Rams before the end of the 2015 season, you are likely a class member eligible to receive a part of the settlement funds.  If you transferred your PSL or received a written cancellation notice from the Rams, you may not be in the class.  The settlement includes a process to verify the claim and the amount owed after a PSL holder files a claim.

What if a PSL holder stopped buying season tickets?

Individuals who bought a PSL but stopped buying season tickets may still be eligible to participate in the settlement.  If you stopped buying season tickets at any time, you may still be in the class if you did not receive a written notice from the Rams cancelling your PSL.

Are there exceptions?

You may receive payment for each PSL you owned at the end of the 2015 season as long as you did not transfer that PSL to someone else or receive a written notice from the Rams terminating that PSL.

When will PSL holders receive their money?

We expect the payment to be made near the end of the year, but the exact date is a bit uncertain because of the court-approval and administrative process involved.  The settlement website has more detailed information about dates and the status of the court-approval process.

Is there a timeline for how events will unfold?

A timeline of key events in the settlement process is located here.

Case Background

In February 2016, Ronald McAllister filed a class action lawsuit asserting that the Rams breached the contract governing the PSLs.  He argued that the contract governing the PSLs sold by FANS, Inc. required the Rams to refund a portion of the PSL purchase price after their move to Los Angeles.  For original PSL holders who bought PSLs when the Rams first came to St. Louis, he sought a 30-percent refund based on the nine unused years remaining on the 30-year term.

In 2018, the court appointed McAllister as a class representative on behalf of all original purchasers of PSLs (known as the FANS Class).  The court appointed as attorneys for the FANS Class Mark Goldenberg, Thomas Rosenfeld and Kevin Green of Goldenberg Heller & Antognoli, P.C.; Anthony Bruning, Anthony Bruning Jr., Ryan Bruning, and Edward Roth of The Bruning Law Firm, LLC; and Richard Cornfeld of the Law Office of Richard S. Cornfeld.

Separate lawsuits brought by individuals who purchased PSLs through the Rams beginning in April 1996 were filed by Richard Arnold, R. McNeeley Cochran, and Brad Pearlman.  They argued that the contracts governing the PSLs sold by the Rams did not terminate with the Rams’ move to Los Angeles, and that the Rams breached the contract by failing to use their “best efforts” to ensure PSL holders the right to purchase tickets wherever the Rams played their home games.  These PSL holders were also grouped together in a class (known as the Rams Class), which also includes PSL holders who upgraded to a higher tier seat or who received their PSL by transfer from another PSL holder.

Both the FANS Class and the Rams Class are part of the settlement.

The attorneys at Goldenberg Heller & Antognoli, P.C. have extensive experience representing clients in complex class action litigation across the country.  Please contact us today at (800) 782-8492.

Court Grants Preliminary Approval of Rams PSL Settlement

Nine Important Facts PSL Holders Need to Know On January 24, 2019, U.S. District Judge Stephen N. Limbaugh Jr., granted preliminary approval of the $24 million class action settlement for purchasers of personal seat licenses (PSLs) for the former St. Louis Rams football team.  The court’s order establishes a settlement website for PSL holders to… Continue reading

Nine Important Facts PSL Holders Need to Know

On January 24, 2019, U.S. District Judge Stephen N. Limbaugh Jr., granted preliminary approval of the $24 million class action settlement for purchasers of personal seat licenses (PSLs) for the former St. Louis Rams football team.  The court’s order establishes a settlement website for PSL holders to file claims, procedures for notice of the settlement to be sent to class members, and a deadline for making claims to participate in the settlement.

“This settlement provides a reimbursement to PSL holders that is consistent with the relief we sought in the lawsuit, but many people still have questions about the claims process,” said Kevin Green, attorney with Goldenberg Heller.

Questions regarding the settlement, the qualifications to receive a refund, opting-out of the settlement, the $24 million settlement cap, the timing of payments to PSL holders, and a timeline of important dates are addressed below.

What are PSL holders getting?

Payments to class members are based on 30-percent of the price paid for each PSL, which represents a full-reimbursement equivalent for the nine years remaining on the 30-year PSL contract when the Rams moved to Los Angeles after the 2015 season.

PSL Tier Price
Pay-Out for Each PSL
$250
$75
$500
$150
$1,000
$300
$2,500
$750
$3,000
$900
$4,500
$1,350

How and when should claims be made?

Class members must file a claim by mail or online at www.RamsPSLClassActionSettlement.com [the website goes live February 16, 2019]. Claims must be filed no later than August 23, 2019.

Who qualifies for a refund?

PSL contracts were initially sold by an entity called “Fans, Inc.”  In April 1996, the Rams started selling PSLs directly.  The settlement includes purchases made both through Fans, Inc. and the Rams.

If you purchased a PSL from FANS, Inc., directly from the Rams, or from another PSL holder at any time, and if you never received a written cancellation notice from the Rams before the end of the 2015 season, you are likely a class member eligible to receive a part of the settlement funds.  If you transferred your PSL or received a written cancellation notice from the Rams, you may not be in the class.  The settlement includes a process to verify the claim and the amount owed after a PSL holder files a claim.

What if a PSL holder stopped buying season tickets?

Individuals who bought a PSL but stopped buying season tickets may still be eligible to participate in the settlement.  If you stopped buying season tickets at any time, you may still be in the class if you did not receive a written notice from the Rams cancelling your PSL.

Are there exceptions?

You may receive payment for each PSL you owned at the end of the 2015 season as long as you did not transfer that PSL to someone else or receive a written notice from the Rams terminating that PSL.

Can PSL holders opt-out of the settlement?

PSL owners may opt-out of the settlement.  The settlement website has detailed information about how to opt-out and the deadline to opt-out.

What if the number of claims exceeds the $24-million dollar settlement?

The $24 million settlement is divided evenly between the FANS Class and the Rams Class, and the total payment to each class is capped at $12 million.  While it is highly unlikely, if the number of claims for either class exceeds the $12 million cap, the payment for each qualifying PSL in that class will be reduced proportionately for the class members.

When will PSL holders receive their money?

The date of payment to the class members is a bit uncertain because there is a court-approval process involved, which could take many months.  The timing for when payment is made could also be extended if there are appeals after the court issues a final approval order.  The settlement website has more detailed information about dates and the status of the court-approval process.

Is there a timeline for how events will unfold?

A timeline of key events in the settlement process is located here.

Case Background

In February 2016, Ronald McAllister filed a class action lawsuit asserting that the Rams breached the contract governing the PSLs.  He argued that the contract governing the PSLs sold by FANS, Inc. required the Rams to refund a portion of the PSL purchase price after their move to Los Angeles.  For original PSL holders who bought PSLs when the Rams first came to St. Louis, he sought a 30-percent refund based on the nine unused years remaining on the 30-year term.

In 2018, the court appointed McAllister as a class representative on behalf of all original purchasers of PSLs (known as the FANS Class).  The court appointed as attorneys for the FANS Class Mark Goldenberg, Thomas Rosenfeld and Kevin Green of Goldenberg Heller & Antognoli, P.C.; Anthony Bruning, Anthony Bruning Jr., Ryan Bruning, and Edward Roth of The Bruning Law Firm, LLC; and Richard Cornfeld of the Law Office of Richard S. Cornfeld.

Separate lawsuits brought by individuals who purchased PSLs through the Rams beginning in April 1996 were filed by Richard Arnold, R. McNeeley Cochran, and Brad Pearlman.  They argued that the contracts governing the PSLs sold by the Rams did not terminate with the Rams’ move to Los Angeles, and that the Rams breached the contract by failing to use their “best efforts” to ensure PSL holders the right to purchase tickets wherever the Rams played their home games.  These PSL holders were also grouped together in a class (known as the Rams Class), which also includes PSL holders who upgraded to a higher tier seat or who received their PSL by transfer from another PSL holder.

Both the FANS Class and the Rams Class are part of the settlement.

St. Louis Rams and PSL Owners Reach $24 Million Settlement

Rams to fully refund to PSL owners the unused portion (nine years) remaining on 30-year PSL contracts following Rams’ departure to Los Angeles Goldenberg Heller & Antognoli is pleased to announce a settlement of its class action against the former St. Louis Rams that will fully compensate tens of thousands of individuals who purchased 30-year… Continue reading

Rams to fully refund to PSL owners the unused portion (nine years) remaining on 30-year PSL contracts following Rams’ departure to Los Angeles

Goldenberg Heller & Antognoli is pleased to announce a settlement of its class action against the former St. Louis Rams that will fully compensate tens of thousands of individuals who purchased 30-year personal seat licenses (PSLs), which were cut short when the Rams relocated to Los Angeles in 2016. 

The settlement, which remains subject to formal review and approval by the United States District Court, provides for a refund to each PSL owner of 30% of the PSL price, equal to the unused 9 years remaining on the PSLs when the Rams moved to Los Angeles following the 2015 season.

“This settlement provides a substantial benefit that matches the relief we sought in the lawsuit,” said Kevin Green, attorney with Goldenberg Heller.  “After nearly three years of litigation, and with the help of a skilled mediator, the Honorable William Ray Price, we were able to work with the Rams and their attorneys to resolve the case in a way that fully reimburses the unused portion of the PSL fee to these loyal fans.”

The Court appointed Mark Goldenberg, Thomas Rosenfeld and Kevin Green of Goldenberg Heller, along with attorneys from The Bruning Law Firm, LLC, and the Law Office of Richard S. Cornfeld as Class Counsel for the FANS Class, comprised of the original PSL purchasers.

On behalf of McAllister, Goldenberg Heller took the lead in:

  • developing the legal theory on which the case was ultimately settled;
  • obtaining federal jurisdiction, making the McAllister case the lead case in 3 consolidated class actions;
  • propounding written discovery to the Rams and third parties and reviewing, with co-counsel, tens of thousands of documents and data produced by the Rams and third parties;
  • defending the Rams’ deposition of McAllister’s expert witness; and
  • conducting the depositions of Rams’ executives, including two depositions of the Rams’ Chief Operating Officer, Kevin Demoff.

Following the Court’s grant of class certification, Goldenberg Heller participated in mediation with Rams counsel, reaching agreement on key terms, and took the lead over the next four months in negotiating and drafting the 35-page settlement agreement with the Rams counsel, a copy of which was filed with the Court on December 5, 2018 and is now subject to approval by the Court. 

“It gives our entire legal team tremendous satisfaction that we were able to bring full compensation to PSL owners through this class action,” said attorney Tom Rosenfeld of Goldenberg Heller.

Background

Original PSL contracts entitled owners to purchase season tickets through 2024.  PSL contracts were sold by an entity called “FANS, Inc.” until April 1996, when the Rams started selling them directly.  The PSLs were sold for $250, $500, $1,000, $2,500, $3,000, and $4,500 each, depending on the location of the seat.  In 2016, when the Rams left for Los Angeles, they did not provide PSL owners a refund for the unused 9 years remaining on the PSLs or the right to use the PSLs in Los Angeles.

The case began in February 2016, when Ronald McAllister filed a class action lawsuit asserting that the Rams breached the contract governing the PSLs.  He argued that the contract governing the PSLs sold by FANS, Inc. required the Rams to refund a portion of the PSL purchase price after their move to Los Angeles.  For original PSL owners who bought PSLs when the Rams first came to St. Louis, he sought a 30-percent refund based on the nine unused years remaining on the 30-year term.

In 2018, the court appointed McAllister as a class representative on behalf of all original purchasers of PSLs – those who purchased their PSL before April 1996, and who had not transferred or upgraded the PSL or received a cancellation notice from the Rams by the end of the 2015 season (known as the FANS Class).

Separate lawsuits were brought by individuals who purchased PSLs through the Rams beginning in April 1996. They argued that the contracts governing the PSLs sold by the Rams did not terminate with the Rams’ move to Los Angeles, and that the Rams breached the contract by failing to use their “best efforts” to ensure PSL holders the right to purchase tickets wherever the Rams played their home games. These PSL owners (known as the Rams Class) are also part of the settlement.

The Settlement Benefits

The amount available for each PSL is indicated in the following chart:

PSL Tier Price
Pay-Out for Each PSL
$250
$75
$500
$150
$1,000
$300
$2,500
$750
$3,000
$900
$4,500
$1,350

If the Rams’ payout for the total number of qualifying claims exceeds $24,000,000 (divided evenly among the FANS Class and Rams Class), the amount paid may be reduced on a pro rata basis.

Next Steps

Goldenberg Heller and the other Class Counsel for the PSL holders have filed a motion asking the court to preliminarily approve the settlement. If the court does so, it will require a third-party claims administrator to send notice to all class members about the terms of the settlement, as well as create a settlement website with information about how to file a claim. Class members will be able to file a claim by mail or online at the settlement website and the court will set a deadline for filing claims. In addition, the settlement agreement will provide a process to verify the claim and the amount owed.

The settlement website will be www.RamsPSLClassActionSettlement.com.  Please note, the website will not be live until after the Court preliminarily approves the settlement.  A timeline of key events in the settlement process is located here.

For more information, see the articles in the St. Louis Post-Dispatch and the LA Times. If you are a PSL owner, please watch for updates as the settlement moves through the court-approval process.

The attorneys at Goldenberg Heller & Antognoli, P.C. have extensive experience representing plaintiffs and defendants in complex class action litigation across the country.  Please contact us today at (800) 782-8492.

A Class Certification Lesson from the Seventh Circuit

Before a plaintiff can proceed as a representative of absent class members who have been similarly injured, the court must certify one or more classes under Rule 23 of the Federal Rules of Civil Procedure.  The first of two main hurdles the plaintiff must clear is found in Rule 23(a), which sets forth four universal… Continue reading

Before a plaintiff can proceed as a representative of absent class members who have been similarly injured, the court must certify one or more classes under Rule 23 of the Federal Rules of Civil Procedure.  The first of two main hurdles the plaintiff must clear is found in Rule 23(a), which sets forth four universal requirements for class actions: numerosity, commonality, typicality, and adequacy of representation.  Second, if the plaintiff seeks damages, she must demonstrate that the requirements of Rule 23(b)(3) are met—that common questions of law or fact predominate over individual inquiries, and that class treatment is the superior method for resolving the controversy.

On October 31, 2018, the United States Court of Appeals for the Seventh Circuit affirmed a district court’s certification of a class of consumers in Beaton v. SpeedyPC Software.  The Court’s opinion in Beaton provides a straightforward guide on several of these factors for litigants seeking class certification.

The Facts

In 2012, the plaintiff in the case, Archie Beaton, began looking online for an at-home fix to solve his laptop’s performance problems.  He discovered a free trial for SpeedyPC’s software, which offered to scan his computer and identify problems that affected the device’s performance.  Beaton ran the initial scan, which reported that his computer was in bad shape and encouraged him to purchase a licensed version of the software to correct the problems.  Beaton made the purchase, but when he clicked the “Fix All” button after running the scan, nothing happened.  Feeling scammed, Beaton sued SpeedyPC in 2013 for breach of warranties and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act on behalf of himself and a class of consumers who had similarly downloaded a free trial and thereafter purchased the full version of the software.

The district court certified the classes proposed by Beaton, and on appeal, the Seventh Circuit upheld the certification.  The Seventh Circuit found all the requirements of Rule 23(a) and 23(b)(3) satisfied.

Commonality

To satisfy the commonality factor, there must be “one or more common questions of law or fact that are capable of class-wide resolution and are central to the claims’ validity.”  This means that the court should look to see if the proposed class members have similar issues, which, if addressed, could help to resolve the litigation for the entire group.  In this case, the court found commonality easily satisfied because of the numerous common questions amenable to class-wide resolution, including: whether the customers availed themselves of any implied warranties, what functions the marketing materials indicated that the software would perform, and whether the software did, in fact, perform those functions, whether SpeedyPC typically deals in goods related to this software, and whether a reasonable consumer would be deceived by the advertisements’ representations.

Typicality

The typicality factor asks whether the lead plaintiff’s claims “arise from the same events or course of conduct that gives rise to the putative class members’ claims.”  For this requirement, the court noted that claims from individuals within the class may have slight factual variations, but typicality is still satisfied if the claims each “have the same essential characteristics.”  The Seventh Circuit explained that Beaton and the other users of the software were exposed to the same messages and promises from SpeedyPC and the software operated in the same way on each computer.  Thus, typicality was satisfied.

Adequacy

Adequate representation requires the named plaintiff to “be a member of the putative class and have the same interest and injury as other members.”  According to the Seventh Circuit, SpeedyPC launched a “scattershot” attack on Beaton’s adequacy as a class representative, disputing his reason for purchasing the software, accusing him of deleting evidence, and even launching an attack on his credibility.  However, with no evidence to support SpeedyPC’s claims, the Seventh Circuit found Beaton and his attorneys to meet the adequacy requirement of Rule 23(a).

Predominance

Rule 23(b)(3) requires a putative class representative seeking damages to demonstrate that common questions of law or fact predominate over differences within the class.  The Seventh Circuit clarified this requirement, explaining that the predominance factor requires the court to assess the questions that are common to the class, and weigh their relative importance to the case.  While not every issue must be capable of being resolved the same way for each member of the class, the court must look to see if the proposed class members’ claims “arise from a common nucleus of operative facts and issues.”

The Seventh Circuit concluded that, although some individualized inquiries might be needed, the individual issues were not significant enough to defeat a finding of predominance, especially since any outstanding questions could be resolved through streamlined mechanisms that would not harm the defendant’s due process rights.  Given that the material facts in the claims against SpeedyPC arose from a common nucleus of operative fact, the Seventh Circuit found that the predominance requirement satisfied.

Of note, the Court found predominance even in plaintiff’s consumer fraud claims by following recent precedent and explaining that class actions need not resolve every element of liability in a single stroke to be certified.  See Slip. Op. at 18-19 (citing Wal‐Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (requiring resolution in “one stroke” of a “common contention” central to the common claim); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997) (certain consumer fraud cases readily establish predominance); Suchanek v. Sturm Foods, Inc., 764 F.3d 750, 759-60 (7th Cir. 2014) (the fact that “[e]very consumer fraud case involves individual elements” does not preclude class actions); Pella Corp. v. Saltzman, 606 F.3d 391, 394 (7th Cir. 2010)).

Furthermore, the Court explained that, to the extent individual issues may be relevant, such issues could be established with affidavits, subject to the defendant’s right to challenge them.  The Court further offered that SpeedyPC could challenge class members’ credibility by “obtain[ing] the testimony of a representative sample of the class members and, if necessary, present[ing] evidence contradicting statements found in particular affidavits.”

Superiority

Finally, the Seventh Circuit determined that a class action was the superior way to resolve the dispute pursuant to Rule 23(b)(3).  Because common questions of law and fact predominated for the class, addressing the claims collectively would provide a more efficient use of the court’s resources.  Moreover, the amount of damages to which each plaintiff would be entitled was so small (less than $100) that it would be unlikely for an individual to bring this case, since the $400 filing fee to initiate the case exceeded the damages.  Finally, the Seventh Circuit emphasized that class action cases like this act as deterrents against “the proliferation of bogus products whose sticker price is dwarfed even by a court filing fee.”


While the Seventh Circuit’s opinion in Beaton v. SpeedyPC Software is useful for its discussion of the requirements for class certification, the court’s analysis concludes by reminding the litigants that class certification is “largely independent of the merits” and that a certified class can still “go down in flames” in subsequent proceedings.  This reminder is key, as class certification is only one part of a class action.  Due to the complexities of litigating class action cases, it is important to hire an experienced team of class action attorneys.

The attorneys at Goldenberg Heller & Antognoli, P.C. have extensive experience representing plaintiffs and defendants in complex class action litigation across the country.  Feel free to contact us today at (800) 782-8492.

Timeline of Key Events in Settlement between St. Louis Rams and PSL Owners

The $24 million class action settlement between the St. Louis Rams and the individuals who purchased personal seat licenses (PSLs), is currently undergoing formal review and approval by the United States District Court.  For more information on the settlement, click here. To help you understand the legal process and important dates and deadlines in the… Continue reading

The $24 million class action settlement between the St. Louis Rams and the individuals who purchased personal seat licenses (PSLs), is currently undergoing formal review and approval by the United States District Court.  For more information on the settlement, click here.

To help you understand the legal process and important dates and deadlines in the settlement process, Goldenberg Heller & Antognoli has created the following timeline, which we will update as the dates become known:

Action

 

Date

 

The Motion for Preliminary Approval is filed

December 5, 2018
The Court issues its Preliminary Approval Order

January 24, 2019
The Settlement Website goes live at www.ramspslclassactionsettlement.com

February 16, 2019
The first of 3 consecutive weekly Publication Notices is printed in the Sunday edition of the St. Louis Post Dispatch

February 17, 2019
E-mail and Postcard Notice of the Settlement is sent out to Class members

February 19, 2019
Deadline for Class members to opt-out of the Settlement or object to its terms

April 9, 2019
The Court conducts a Final Approval Hearing to rule on objections to the settlement and determine whether the settlement should be approved as fair and reasonable

June 24, 2019
Deadline to file a claim

August 23, 2019
The Court issues its Final Approval Order

June 24, 2019
The “Effective Date” of the Settlement Agreement
July 24, 2019

Claims Administrator provides counsel a list of all claims qualifying for payment

On or before December 1, 2019
Payment of Qualifying Claims
On or before December 31, 2019

For more information, or to file a claim, please visit the settlement website www.RamsPSLClassActionSettlement.com.

The attorneys at Goldenberg Heller & Antognoli, P.C. have extensive experience representing plaintiffs and defendants in complex class action litigation across the country.  Please contact us today at (800) 782-8492.

Supreme Court to Review Cy Pres Settlement

Can Google Settle Privacy Class Action by Paying Third Parties Not Involved in the Lawsuit? On Wednesday, the United States Supreme Court will hear oral arguments in Frank v. Gaos.  The topic before the Court involves a “cy pres” settlement.  In the class action context, a cy pres settlement occurs when all or part of… Continue reading

Can Google Settle Privacy Class Action by Paying Third Parties Not Involved in the Lawsuit?

On Wednesday, the United States Supreme Court will hear oral arguments in Frank v. Gaos.  The topic before the Court involves a “cy pres” settlement.  In the class action context, a cy pres settlement occurs when all or part of the settlement money is distributed to a public interest organization serving an interest similar to those sought to be protected in the lawsuit.  Cy pres distributions may be used to ensure that money paid by the defendant, but not claimed by class members, does not revert to the defendant.  Alternatively, parties utilize cy pres distributions when a class is large and the cost of identifying class members and distributing the settlement money makes it impractical to distribute the award to all class members.  These arrangements are called “cy pres” settlements based on the idea that they come “as near as possible” to awarding damages to the class members.  In all class action settlements, a court must approve the settlement after examining its terms and finding they are “fair, reasonable, and adequate.”

The Frank case involves an objection to a cy pres award in a class action settlement between the plaintiff, Paloma Gaos and Google.  Gaos filed a class action against Google alleging that Google violated users’ privacy by sharing their search terms with third party websites without consent.

According to Google and the plaintiff, the parties made several attempts to resolve the matter without success.  While Google’s third motion to dismiss the complaint was pending, the parties mediated the case before an experienced and well-respected mediator of class action disputes.  After a full day of negotiations, the mediator made a “mediator’s proposal” for settlement based upon his review of the facts and applicable law.  All parties accepted this proposal and used it to form the material terms of a settlement agreement, which was further negotiated for nearly two months before being fully executed.

As part of the settlement, Google agreed—for the first time—to disclose to users the ways in which it treats search queries entered in Google.com, so that users can make informed choices about whether and how to use Google search.

Google also agreed to make a total cash payment of $8.5 million, which was to be used for payment of settlement notice and administration expenses, cy pres distributions, any court-approved attorney fee or cost award to class counsel, and any court-approved incentive awards to the class representatives.  The district court approved the settlement, finding that a cy pres distribution was appropriate because it was not feasible to distribute the fund to the class members, and distributing the money to over 100 million class members would cost more than each person would receive.  The court, therefore, approved the distribution of the settlement fund to various institutions focused on privacy issues.  Google did not have any say in which institutions received the funds, and none of the settlement funds would revert to Google under any circumstances.

A group of class members objected to the settlement.  The objectors did not challenge the settlement’s size or amount, and did not contest the award of attorneys’ fees.  Instead, they challenged the court’s factual findings that: (a) distributing the roughly $5.3 million net settlement fund to a class consisting of approximately 129 million people was not feasible, and (b) that the cy pres recipients’ use of funds was tethered to the alleged injury and interests of the class.  The objectors argue that the Court should adopt a bright-line rule that no settlement should ever be approved if the settlement does not provide direct monetary relief to the class members.

The parties to the settlement argue that the objectors ignore the change to Google’s practices brought about by the lawsuit and, further, that the court correctly analyzed the three factors for approving a cy pres distribution: distribution of proceeds must be infeasible; the cy pres recipients must provide indirect benefits to the class member interests addressed in the lawsuit; and the recipients must be selected by merit rather than affiliation.

If the Court sides with Google and the class members, then the status quo will remain and district courts will retain their discretion to approve cy pres distributions—perhaps with more limitations or guidance by the Supreme Court.  If the Court sides with the objectors, however, it could create a rule that bars cy pres awards entirely, making it more difficult to prevent settlement money from reverting to the defendant and prolonging complex litigation by removing a tool for settling class actions with large numbers of class members who cannot be identified or receive compensation without a huge expenditure of money by the defendant.

With the new makeup of the Court, Chief Justice John Roberts will likely provide a critical vote.  In 2013, the Chief Justice utilized a denial of a writ of certiorari to explain his view that the Court should address “fundamental concerns” with cy pres awards, “including when, if ever, such relief should be considered.”  Departing from the typical one-sentence denial of a party’s request for review, the Chief Justice provided an eight paragraph statement along with the denial, which concluded that the Court “may need to clarify the limits” of cy pres awards in a future case.

Frank appears to be that case.

References:

Brief for the Petitioners, Frank v. Gaos, No. 17-961 (Jan. 3, 2018), available at https://www.supremecourt.gov/DocketPDF/17/17-961/26575/20180103095144639_USSC%20Petition%20for%20Writ%20of%20Certiorari.pdf.

Brief for the Respondents, Frank v. Gaos, No. 17-961 (Mar. 9, 2018), available at https://www.supremecourt.gov/DocketPDF/17/17-961/38328/20180309124415022_USSC%2017-961%20Brief%20in%20Opposition.pdf.

Marek v. Lane, 571 U.S. 1003 (2013).

Kevin Green represents plaintiffs and defendants in complex class action litigation across the country. Feel free to contact Kevin today at (800) 782-8492.