On December 10, 2020, the U.S. District Court for the Northern District of California held its Class Action Symposium. The symposium is as timely as ever. Food, beverage, and consumer product class actions are rocketing, with projected filings up 24 percent over 2019. The Northern District of California sees a substantial subset of these filings, earning it the nickname “the Food Court.”
The symposium featured distinguished speakers such as the Honorable Charles Breyer, Erwin Chemerinsky, and several of the nation’s leading class action litigators. In a matter of hours, the symposium packed in a variety of top-of-mind topics for practitioners: (1) guidance for class action settlements, (2) key developments in Ninth Circuit case law, and (3) predictions about class action cases at the Supreme Court.
Here we summarize the riveting discussion and cull top tips for litigators.
Panel 1: Class Action Settlement Approval
Panelists: Judge Breyer (U.S. District Judge), Melissa S. Weiner (Pearson, Simon & Warshaw, LLP), Bambo Obaro (Weil, Gotshal & Manges LLP)
The first panel emphasized the Northern District’s Procedural Guidance for Class Action Settlements that was updated in December 2018 but remains critical to approval of settlements in the Northern District. The panelists highlighted several provisions not to be missed:
1) Reversionary Clauses – The Guidance notes that the Ninth Circuit “disfavor[s]” reversions of unclaimed funds back to the defendant. Nevertheless, if parties insist on a reversionary clause in their settlement, the Guidance encourages that parties be prepared to explain—in a motion for preliminary approval and otherwise—the potential amount of such reversion and why reversion is appropriate at all. The panelists commented that parties can avoid a reversionary clause by entering into a common fund settlement (generally favored by plaintiffs) or claims-made settlement (generally favored by defendants—and objectors).
2) Settlement Administration – The Guidance reminds practitioners of several oft-omitted disclosures relating to class administrators. In a motion for preliminary approval, practitioners should disclose (1) the proposed administrator, (2) the selection process, (3) how many administrators submitted proposals, (4) what methods of notice and payment were proposed, (5) the administrator’s costs, (6) who will pay the costs, and (7) most often missed, the lead class counsel’s firms’ history of engagements with the settlement administrator over the last two years. The panelists urged that omitting this information could quickly lead the court to deny the parties’ proposal.
3) Notice – The Guidance sets out both suggestions and requirements for notice to class members—and even provides draft language for such notice. Practitioners should be prepared to address how notice will be as pervasive as possible, relying on mail, email, and/or social media and taking into account education level and language needs of class members. Several disclosures are required on the notice form: (1) contact information for counsel, (2) the address of the settlement website, (3) instructions on how to access the case docket, (4) the date of the final approval hearing, and (5) that the hearing date may change without further notice. As Judge Breyer observed, court’s remain keen on notice, so practitioners are advised to pay particular attention to this section.
5) Objections and 9) Timeline – Courts are also keen on opt-out and objection procedures. Like the notice provision, the Guidance provides a draft of the opt-out notice. The Guidance further recommends that parties “ensure that class members have at least thirty-five days to opt out or object to settlements and the motion for attorney’s fees and costs.” As the panelists pointed out, counsel are often caught off guard by the 35-day guidance.
Top Tip: In Judge Breyer’s own words, and on behalf of his judicial colleagues, “I urge all practitioners to read [the Guidance] at the outset of litigation.” Specifically, Judge Breyer suggested that early familiarity could give practitioners an edge going into settlement negotiations.
Panel 2: Recent Updates in Class Action Litigation
Panelists: Jocelyn Larkin, (The Impact Fund), Simona Agnolucci, (Willkie Farr & Gallagher LLP)
The second panel took a deep dive into two topics arising from recent Supreme Court decisions. As the panelists observed, district and circuit courts alike continue to grapple with applying these cases to the class action context.
Specific Personal Jurisdiction in light of Bristol Myers Squibb – The Supreme Court held in Bristol Myers Squibb v. Superior Court, 137 S. Ct. 1773 (2017) that a California state court did not have...
