In re Easysaver Rewards Litigation
921 F. Supp. 2d 1040
S.D. Cal.2013Background
- Final order grants final settlement approval and plaintiffs’ motion for fees, costs, and incentive awards; Perryman objected to the settlement and fees.
- Settlement class includes customers enrolled in EasySaver Rewards, RedEnvelope Rewards, or Preferred Buyers Pass from Aug 19, 2005 to Preliminary Approval.
- Settlement provides $20 credits to each class member plus a $12.5 million cash fund for refunds of monthly fees; credits are transferable and usable online, with blackout periods.
- Cy pres awards fund internet privacy/ security programs at San Diego State University, UCSD, and USD School of Law; remaining funds revert to cy pres at court approval.
- Notice was provided to ~1.3 million class members; Perryman was the only objector among timely objections; Aaron Meyer submitted a letter not filed with the court.
- The court found the settlement fair, reasonable, adequate, and not the product of collusion, and approved the fee, incentive awards, and cy pres structure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Coupon CAFA effect on settlement value | Perryman argues the $20 credits are coupons inflating value | Settlement includes cash fund; not a pure coupon | Court finds overall relief fair and not a pure coupon problem; credits add real value |
| Cy pres propriety and nexus to class | Cy pres recipients tied to internet privacy objectives benefiting silent members | Recipients have nexus to underlying statutes and nationwide impact | Cy pres distribution approved; bears nexus to claims and benefits silent members |
| Attorneys’ fees and costs reasonableness | Fees up to $8.65 million plus costs; fee request justified by result | Objector questions proportionality and potential windfall | Fees approved at $8.65 million (22.7% of settlement value) with lodestar crosscheck supporting reasonableness |
| Objector standing and overall fairness of settlement | Objector properly filed objections; settlement negotiated at arm’s length | No collusion; terms fair and in best interests of class | Objector Perryman’s objections overruled; settlement approved |
| Appeal bond request | Bond protects against possible nonpayment on appeal | Premature to impose bond without notice of intent to appeal | Appeal bond denied pending potential future notice of appeal |
Key Cases Cited
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (cy pres must have a nexus to class and provide next-best relief)
- Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (cy pres must serve silent class members' interests and underlying statutes)
- Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012) (requires next-best distribution guiding cy pres awards)
- Lane v. Facebook, 696 F.3d 811 (9th Cir. 2012) (cy pres must align with class interests and statutes)
- In re Bluetooth Headset Prod. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (clear sailing fee arrangements raise concerns about class counsel incentives)