80 F. Supp. 3d 626
E.D. Pa.2015Background
- Eight years of antitrust class action against BRU and manufacturers; Third Circuit vacated initial settlement; post-appeal settlement (P-A) restructured terms to maximize direct class benefit; BRU purchase records identified 1.1+ million members; many claims auto-approved via BRU data; cy pres eliminated with funds reverting to defendants; reverter and coupons deemed not to undermine overall fairness; final approval included allocation, attorneys’ fees, expenses, and objector/participant awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Post-Appeal Settlement fair, reasonable, and adequate overall? | P-A maximizes direct class benefit and eliminates cy pres. | Settlement terms may still favor defendants via reverter/coupon mechanics. | Yes; settlement fair and adequate. |
| Does allocation maximize direct benefits consistent with Baby Products? | Proposed plan ensures broad direct payment to >1.1 million members. | Proposed plan had complexities and potential disparities. | Yes; pro rata, 29% recovery, no cy pres. |
| Are class counsel’s fees reasonable given the direct benefits achieved? | Fees should reflect substantial direct class benefit and efforts. | Fees appear outsized; challenge to fee basis. | Yes, with reduction for objector Young; net 31.2% of gross fund. |
| Should Objector Kevin Young receive fee/incentive for his role? | Young’s objection improved direct class benefit. | Objector fees should come from class fund, not counsel. | Yes; Young awarded $0.75 million (adjusted) incentive/fees; others denied. |
| Is the reverter and coupon mechanism fair and permissible? | Reverter encourages full cash distribution; coupons are ancillary. | Reverter/coupons could unjustly benefit defendants. | Fair and permissible within overall settlement plan. |
Key Cases Cited
- Girsh v. Jepson, 521 F.2d 153 (3d Cir. 1975) (nine Girsh factors guide settlement fairness analysis)
- In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283 (3d Cir. 1998) ( Prudential factors supplement Girsh; direct benefits matter)
- Baby Prods. Litig., 708 F.3d 163 (3d Cir. 2013) (direct-benefit inquiry; cy pres cautions; distribution realism)
- In re Cendant Corp. Litig., 264 F.3d 201 (3d Cir. 2001) (PRIDES; objectors and common fund jurisprudence)
- In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) (Gunter/Prudential factors guiding fee awards)