Ninth Circuit Did Not Preclude Settlement Might Be Fair, But Value And Due Process Concerns Triggered A “Relook.”
The Ninth Circuit, in Bedolla v. Labor Ready Southwest, Inc., Nos. 13-5506 et al. (9th Cir. June 2, 2015) (published), denied an objector’s related motion to intervene (four years into the litigation) but did reverse the final approval of a class action settlement where a potential $4.5 million gross settlement fund was created and where class counsel were awarded $1.125 million (25% under a “clear sailing” settlement clause with the defense).
The reversal was hinged on two grounds: (1) the district judge failed to follow Bluetooth procedural requirements, given that evidence indicated the actual distributions were only $373,675—with the fee award being almost three times too large if the economic realities were followed; and (2) the scheduling was violative of the Ninth Circuit’s prior Mercury Interactive decision because the class’ objections were due even before the fee motion was filed. So, valuation and due process concerns required a “relook” in this one, although the circuit court did concede that the injunctive relief did provide a significant class benefit and the settlement still might be fair upon further scrutiny.