Jane Doe v. Deja Vu Consulting, Inc., 925 F.3d 886

Background

A class of 28,177 current and former exotic dancers sued Déjà Vu alleging FLSA and state wage-and-hour violations; parties negotiated a settlement before merits rulings.
The Settlement provided injunctive relief (classification assessments, protections for employees and IPEs) and $6.55 million total value: $1M cash pool, $4.5M "secondary" pool of club-credit (rent or dance-fee credits), and $900K attorneys’ fees (plus up to $300K indirect fees tied to secondary-pool redemptions).
The secondary pool functions as credits redeemable at Déjà Vu clubs (default relief for class members who do not opt for the cash pool); unredeemed funds revert to defendants after limits.
Four objectors argued the settlement was unfairly valued, that the secondary-pool credits are coupons (triggering CAFA fee rules), that attorney-fee provisions (including a clear‑sailing clause) indicated collusion, and that Rule 23 notice/release breadth was deficient.
The district court applied the UAW fairness factors, found substantial litigation risks (including enforceable arbitration clauses after Epic Systems) and adequate informal discovery from a prior related case, and approved the settlement.
The Sixth Circuit affirmed in part, holding the district court did not abuse its discretion on fairness, valuation, notice, and release breadth; Judge White concurred in part and dissented on the coupon/fee issue, arguing CAFA required remand to calculate fees based on redeemed coupons.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Fairness/value of settlement vs. litigation recovery	Objectors: district court undervalued class claims; damages could be much larger at trial	Déjà Vu: class-wide damages modeling was impractical; arbitration and litigation risks made settlement reasonable	Affirmed: court did not abuse discretion; considered damages model, litigation risks, arbitration, and counterclaims
Coupon status of secondary-pool credits (CAFA)	Objectors: credits are coupons—require fee award based on redeemed value	Déjà Vu/Class: credits are not coupons because no purchase required and cash alternative exists	Majority: credits not treated as coupons for approval; concurrence (White) dissented, arguing credits are coupons and fees must be recalculated under CAFA
Attorneys’ fees / clear‑sailing clause	Objectors: fee provisions (clear‑sailing, large percentage) suggest collusion and overcompensation	Déjà Vu/Class: fees reasonable relative to total settlement and injunctive value; clear‑sailing not dispositive	Majority: fee award not an abuse of discretion; concurrence would remand because CAFA requires coupon‑based fee calibration
Rule 23 procedural requirements: notice and release breadth	Objectors: notice failed to explain distribution and pending related suits; release too broad	Déjà Vu/Class: notice met Rule 23 and due process; release limited to claims sharing factual predicate	Affirmed: notice adequate; release tailored to claims "based on" or "reasonably related" to pleadings and thus permissible

Key Cases Cited

International Union, UAW v. General Motors Corp., 497 F.3d 615 (6th Cir.) (multi‑factor test for fairness of class settlements)
Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d 235 (6th Cir.) (probability of success on merits is most important fairness factor)
In re Dry Max Pampers Litig., 724 F.3d 713 (6th Cir.) (standard of appellate review for settlement approval)
Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612 (U.S.) (enforceability of individual arbitration agreements against collective actions)
In re Easysaver Rewards Litig., 906 F.3d 747 (9th Cir.) (analysis of "coupon" settlements and CAFA fee requirements)
Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615 (9th Cir.) (settlement fairness analysis; courts need not resolve merits to approve compromise)
Gaffers v. Kelly Servs., 900 F.3d 293 (6th Cir.) (FLSA collective‑action/arbitration interaction post‑Epic Systems)