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What Are the New Requirements for Preliminary Approval Out of the Northern District of California?

In November 2018, the highly influential Northern District of California released additions to its comprehensive set of procedural guidelines for class action settlement administration to follow throughout the class action settlement process. The guidance provides all parties with a clear, comprehensive set of procedural standards that should be followed throughout the settlement administration process that expedite the process and avoid unnecessary obstacles, objections, and appeals.

The Motion for Preliminary Approval occurs after the parties sign the final class action settlement agreement so that the court can review and approve the terms. If the motion is granted, the notice and distribution process can proceed. Gaining approval used to be something of a guessing game, with variables depending on the state, the court, and the judge. The guidance from the Northern District seeks to close the gap and provide a roadmap for class action practitioners to follow while increasing transparency through formalized reporting requirements. Parties are advised to note the following updates that will help get your Preliminary Approval granted most efficiently:

Estimated Claim Submissions

According to the guidelines:

“If there is a claim form, 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 those examples.”

A highly experienced claims administrator is most suited to handle the task of estimating the most accurate number of claims. While the court is simply asking for an estimation, there are unforeseeable factors that can impact claim rates. History does not guarantee a perfect estimate; However, an experienced settlement administrator will be able to combine historical knowledge, experience with similar cases, an understanding of the class demographics and behavior, and knowledge of the media landscape to help predict a response rate.

Anticipated Reversions

The guidelines state:

 “In light of Ninth Circuit case law disfavoring reversions, whether and under what circumstances money originally designated for class recovery will revert to any defendant, the potential amount or range of amounts of any such reversion, and an explanation as to why a reversion is appropriate in the instant case.”

The courts don’t usually favor reverting funds to the defendant in class actions after settlement distribution. Increasingly, we’re seeing a decline in reversions at the federal level. However, some instances may warrant a reversion situation. Cases where a class member does not have to participate in a claim filing process and simply receives the settlement benefit with no effort, barrier-free may warrant a reversion. A reversion under these circumstances is justifiable since no obstacles have been placed between the claimant and the money (other than the claimant’s own desire not to cash the free check).   

A Comprehensive Website

New guidelines recommend comprehensive class action settlement websites:

“Class counsel should consider the following ways to increase notice to class members:…providing a settlement website that estimates the claim amounts for each specific class member and updating the website periodically to provide accurate claim amounts based on the number of participating class members…”

All class actions should provide access to a comprehensive settlement website that includes all the information claimants need to make an informed decision. Websites are easy for experienced class action administrators to set up and cost-effective to maintain. Leading claims administrators identified the need for this tool long ago. At Heffler Claims Group, we have an  in-house team of IT professionals who develop customized online experiences for any type of class action case regardless of class size, practice area, or any other special criteria including language preference.

Gain Preliminary Approval for Your Class Action Lawsuit

Following the requirements set forth by the Northern District of California is the best way to ensure that your own Motion for Preliminary Approval is granted without hesitation. As the leading experts in class action administration for over 50 years, Heffler Claims Group is your resource for meeting the modern guidelines and getting your class action settlement resolved efficiently. Our clients have entrusted us with millions of claims, tens of millions of notices, hundreds of thousands of calls, and billions of dollars distributed worldwide. Our vast experience, dedicated team of professionals, state-of-the-art technology, and commitment to quality service and cost savings ensure a seamless experience from start to finish. Contact us for more information about adhering to the Northern District of California guidelines.

Heffler Claims Group
Heffler Claims Group is a national leader in class action settlement administration, specializing in the notice and administration of complex legal matters. Together with Prime Clerk, the leading bankruptcy claims and noticing agent and another Duff & Phelps company, we offer the most comprehensive administrative services in the industry.


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