CAFA Notice – It’s still a thing

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It’s been several years since The Class Action Fairness Act (“CAFA”), which significantly expanded federal diversity jurisdiction over class and mass actions, was at the top of everyone’s mind, but the requirements STILL exist.

CAFA requires all defendants to notify state and federal regulators where any class member may reside of any proposed class action settlement within ten (10) days of filing. If the location of the class members is unable to be determined, defendants should give notice to regulators in all fifty states.  Defendants who are unable to meet the ten day requirement are met with stark consequences:

A class member who can prove that regulators were not notified of the settlement can opt to not be bound by the settlement and the case can unravel.  Additionally, a court cannot enter an order to give final approval until 90 days after the CAFA notice is given. Thus, defense counsel must begin preparing this notice while settlement negotiations are still ongoing.

CAFA was implemented in the class action realm to protect class members from being involved in a settlement that may be deemed unfair or inconsistent with regulatory policies and to protect consumers from class-action abuse, particularly settlements that generate large attorney fees which consume most of the economic value of the settlement.  The requirement deliberately invites state and federal officials to intervene in the settlement process.  The content of the notice must include:

  • A copy of the complaint and all exhibits
  • Notice of any scheduled hearings in the class action
  • A copy of the proposed notice to class members
  • The proposed or final settlement agreement
  • Any simultaneous agreement between plaintiffs’ counsel and the settling defendants
  • The proposed dismissal
  • The names of class members who reside in each state and the share of claims of such members to the settlement (if able to be attained) and/or the estimates of the number of class members who reside in each state and the share of claims of such members to the settlement
  • Any written opinion relative to the settlement

The required information can often be problematic for defendants to gather As soon as a settlement is reached, defendants should begin gathering the documents listed above, and working to compile a class list, if available.  More, each settling defendant is responsible for providing a CAFA notice, so it is imperative to work with other defendants on the case to create a common form of notice, a class member database and a plan for the service of the notice.  The mail goal for defendants involved with class actions subject to CAFA is to plan ahead and be sure to not miss the 10 day deadline. 

Learn more about Heffler Claims Group.

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