Loop LLC v. CDK Global, LLC
3:24-cv-00571
W.D. Wis.Apr 29, 2025Background
- Loop LLC, on behalf of a certified class, brought an antitrust suit against CDK Global, alleging CDK conspired with a competitor to restrain trade in the market for data-integration services, resulting in higher prices.
- The parties reached a proposed settlement two weeks before trial, agreeing on a $630 million payment from CDK to the class.
- The settlement would compensate class members based on their purchase volume, with significant sums allocated to attorney fees, expenses, a service award, and administrative costs.
- The court is asked to grant preliminary approval under Federal Rule of Civil Procedure 23(e)(1)(b), which requires a likelihood that the settlement is fair, reasonable, and adequate.
- The class consists of sophisticated business entities, each eligible for substantial recovery, which influenced the court’s preliminary approval despite concerns.
- The court identifies several concerns with the settlement structure, fee and expense requests, the service award, and the claims process, deferring final approval pending further justification and documentation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Attorney Fees (1/3 recovery + 5x lodestar) | Fees are typical and justified by risk and complexity | Not directly specified, but settlement reflects negotiated agreement | Court has concerns about the high percentage and multiplier; needs more justification |
| Expenses and Administrative Costs | Requested expenses proportionate to size/effort | Not directly specified | Court requires detailed accounting to assess reasonableness |
| Service Award ($250,000) | Loop's efforts justify an unusually large amount | Not directly specified | Court requires more support; typical awards are much lower |
| Claims Process/Settlement Structure | Calculations and identity verification will ensure proper distribution | Not directly specified | Court seeks clarity on process and ongoing court jurisdiction |
Key Cases Cited
- Williams v. Rohm and Haas Pension Plan, 658 F.3d 629 (7th Cir. 2011) (district courts must determine fees that mimic a hypothetical ex ante bargain)
- Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014) (one-third of settlement commonly approved, but may not suit large settlements)
- Silverman v. Motorola Solutions, Inc., 739 F.3d 956 (7th Cir. 2013) (tiered fee approach may be appropriate for large settlements)
- Birchmeier v. Caribbean Cruise Line, Inc., 896 F.3d 792 (7th Cir. 2018) (tiered fee percentages to ensure fairness in large settlements)
- Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014) (fees must reflect realistic market rates, escalator of risk is limited)
- Cook v. Niedert, 142 F.3d 1004 (7th Cir. 1998) (factors for awarding class representative service awards)