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Settlement Pitfalls

Understand the complexities of coupon settlements in legal cases, including rejected examples and Cy Pres considerations. Learn about judicial scrutiny and attorney fees. Stay informed to navigate settlement challenges effectively.

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Settlement Pitfalls

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  1. Payday Loan Bar Association Lewis S. WienerNovember 2, 2012 Settlement Pitfalls

  2. Agenda • Coupon Settlements • Cy Pres

  3. Coupon Settlements • 28 U.S.C 1712 • Attorneys’ fees based on value of coupons that are actually redeemed • Heightened judicial scrutiny

  4. What is a Coupon? • Not defined by CAFA • Common meaning: a plaintiff must spend money in order to realize the settlement benefit; a discount • Not a coupon if plaintiff does not have to spend money

  5. Coupon Settlements Rejected • Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292 (S.D. Fla. 2007) (refusing to approve a settlement that would have provided members of the plaintiff class with a $19.00 store credit because the cost of defendant's merchandise vastly exceeded $19.00, and the coupon could not be used to purchase a whole product. Settlement was not fair, adequate or reasonable) • True v American Honda Motor, EDCV 07-0287-VAP (C.D. Cal. Feb 26, 2010) (rejecting settlement that provided members of the plaintiff class $1,000 or $500 coupon offered to consumers to be applied toward the purchase of a new car) • Schlesinger v Ticketmaster Entertainment, Inc., BC304565 (Sept. 26, 2012) ($1.50 coupon to be applied toward a future ticket purchase does not represent real value for class members. Moreover, if a class member never buys a ticket from Ticketmaster, that person would never benefit from the settlement)

  6. Cy Pres • Should be a “driving nexus” between the plaintiff class and the cy pres beneficiaries • In re: Groupon, Inc. Marketing and Sales Practices Litigation, 3:11-md-2238-DMS (S.D. Cal. Sept. 28, 2012)

  7. Thank You Lewis S. Wiener 202.383.0140 lewis.wiener@sutherland.com

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