Pragmatic Valuation of Class Action Settlement Is Key In Voucher/Coupon Cases.
Rael v. The Children’s Place, Inc., 2021 U.S. Dist. LEXIS 63117 (S.D. Cal. Mar. 31, 2021) is a situation where class action counsel’s fee award was denied without prejudice until the true value of a voucher and coupon settlement could be determined under the Class Action Fairness Act (CAFA).
What happened here is that a retail store consumer class action was settled by which vouchers and coupons would be issued to the class members, with one voucher being good for $6 off a future purchase (no minimum purchase necessary) and a coupon good for a 25% discount on the first $100 of a purchase. Plaintiffs moved for final approval of the settlement and $1.08 million in attorney’s fees and costs, which defendant agreed to pay separately. The fee motion was based on a settlement fund of about $5.614 million, which assumed 100% of the vouchers would be redeemed at the $6-off level. Defendant did not oppose the motion under a “clear sailing” provision, but an objector challenged the settlement based on the true value of the redemption of vouchers and coupons.
District Judge Curiel sided with the objector for now. The district judge determined, based on the circumstances, that the $6-off vouchers and 25% off coupons were coupons under CAFA. As such, the award of attorney’s fees had to be delayed until the true amount of recovery was determined for the vouchers and coupons.