In Re Trans Union Corp. Privacy Litigation
741 F.3d 811
7th Cir.2014Background
- Plaintiffs sued Trans Union under the Fair Credit Reporting Act alleging unlawful sale/sharing of consumer credit lists; the MDL class was ~190 million people.
- Parties negotiated a settlement: all class members received basic credit monitoring; a $75 million cash fund was created for cash claims; Trans Union also provided ~$35M in enhanced in-kind relief.
- The settlement preserved individual (post-settlement) suits for class members who did not take cash or enhanced relief, but released collective/class claims; Trans Union agreed it could settle PSCs and be reimbursed from the $75M fund for settlement amounts (not defense costs).
- Enterprising lawyers filed >70,000 separate individual PSCs (many in low-fee Texas counties). Trans Union settled many PSCs and sought reimbursement from the fund; class counsel objected.
- The district court approved the PSC settlements and reimbursements; this court previously affirmed key interlocutory orders and here affirms the final distribution order and the interim reimbursement approvals.
Issues
| Issue | Wheelahan's Argument | Trans Union's Argument | Held |
|---|---|---|---|
| Whether the district court s final distribution order impermissibly modified the settlement by restricting who may raise reimbursement disputes | Final order narrowed who could raise reimbursement disputes, limiting Wheelahan s ability to represent class interests | Final order did not strip Wheelahan of class counsel status; any class counsel may still bring issues to court | Court: No modification; Wheelahan retained rights as class counsel and may raise disputes |
| Whether many PSCs were actually prohibited class or "aggregated" actions under the settlement | High-volume filings in low-fee venues were de facto aggregated/mass actions and thus barred by the settlement | Settlement expressly defined "Class Action"/"Aggregated Action" as suits by two or more plaintiffs; each PSC was a single-plaintiff action, so not barred | Court: PSCs were filed by individual plaintiffs and fall outside the settlement s definitions; reimbursements allowed |
| Whether Trans Union may be reimbursed from the fund for settling PSCs that were time-barred (outside the 2-year waiver) | Trans Union waived statute of limitations only in some instances; it should not be reimbursed for settling claims it could have defeated as time-barred | Settlement gave Trans Union discretion to settle any PSC or pre-suit demand and to be reimbursed for amounts paid to satisfy settlements; Trans Union need not assert every defense | Court: Trans Union had discretion to settle even winning claims; reimbursement authorized by the settlement |
| Whether Trans Union may be reimbursed for settling facially meritless PSCs (e.g., targeting claims impossible under facts) | Trans Union improperly reimbursed for settlements of claims that were clearly meritless and could have been defeated cheaply | Settlement did not require Trans Union to litigate every claim; settling meritless claims was within its contractual option and reimbursable | Court: Settlement granted Trans Union discretion to settle; reimbursement proper; some claimants might have valid alternative claims (e.g., firm-offer) |
Key Cases Cited
- Synfuel Technologies, Inc. v. DHL Express (USA), Inc., 463 F.3d 646 (7th Cir. 2006) (compare settlement relief to expected value of class claims when assessing fairness)
- Reynolds v. Beneficial Nat. Bank, 288 F.3d 277 (7th Cir. 2002) (same)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (U.S. 1980) (common-fund doctrine authorizes attorneys fees from funds created for benefit of a class)
- Bullard v. Burlington Northern Santa Fe Ry. Co., 535 F.3d 759 (7th Cir. 2008) (interpretation of "mass action" under CAFA discussed)
- In re Trans Union Corp. Privacy Litig., 629 F.3d 741 (7th Cir. 2011) (prior Seventh Circuit decision approving settlement counsel fees and related rulings)