The Northern District of California United States District Court recently released updated guidelines for class action settlements. These updates, effective immediately, outline new expectations of settlement administrators and class counsel, define appropriate cy pres awardees, make settlement results public information, and provide guidance to notice language. Failure to follow these guidelines could result in unnecessarily delayed or denied approval.
California’s Northern District is home to many class action suits, and class action procedural guidance commonly begins with guidelines from this Court. The Northern District is the first Court in the country to require this level of transparency.
Perhaps the most significant change in the guidance is a request to make settlement statistics publicly available on the settlement website within 21 days after funds and fees are distributed. This includes total claim rates, recovery per claimant, attorney’s fees, and injunctive relief.
Within 21 days after the distribution of the settlement funds and payment of attorneys’ fees, the parties should file a Post-Distribution Accounting, which provides the following information:
In addition to identifying a proposed settlement administrator and their costs during preliminary approval, counsel is required to add the following information:
The Court requires disclosure from lead counsel about their past comparable class settlements, including settlements involving the same or similar clients, claims, or issues.
The guidelines contain language designed to match upcoming Rule 23 amendments which go into effect December 1, 2018. The Court makes specific recommendations that class counsel consider notice to class members through social media and other digital sources, hiring of a notice or marketing specialists, and using third-party data sources.
In addition, the guidelines include new language listing U.S. mail, email, and social media as all appropriate methods to achieve the best notice that is practicable under the circumstances. Rule 23 amendments, which go into effect in December, place electronic means of notice on the same level as first-class mail.
The Courts added a step to cy pres preliminary approval that requires counsel to not only identify the cy pres awardee, but to also identify any relationship the parties or counsel may have with the proposed recipient.
If you have questions about the new Northern District guidelines and how they pertain to your class action settlement, our experts can help. Contact Heffler today for a free consultation.