Tennille v. Western Union Co., 809 F.3d 555

Background

Western Union held approximately $100 million in unredeemed customer funds, collected interest and charged administrative fees while the funds remained unclaimed. Historically ~15% of customers reclaimed funds after notice.
Plaintiffs filed a putative class action alleging Western Union failed to timely notify customers and improperly retained interest/fees; parties settled before final class-certification rulings.
Settlement required Western Union to deposit about $135 million of unclaimed customer money into a Class Settlement Fund (CSF); CSF would pay claimants, administration costs, incentive awards, and attorneys’ fees; unclaimed remainder would go to a cy pres fund and possibly an indemnity fund for Western Union if States refused the cy pres distribution.
District court approved the settlement; this court affirmed settlement approval in Tennille v. Western Union Co., 785 F.3d 422 (10th Cir. 2015).
Class Counsel sought ~30% of the $135M CSF as attorney fees. Magistrate judge found the true benefit smaller (~$65M) and recommended fees based on that figure; district court instead used the full CSF value and awarded just over $40M (~30%).
Western Union appealed the fee award, arguing the award would deplete amounts available to indemnify it against potential enforcement actions by States; Class Counsel and the court questioned Western Union’s standing to appeal because the fees are paid from class members’ funds.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to appeal fee award	Class Counsel: settling defendant lacks Article III interest in fees paid from class recovery; thus no standing	Western Union: has a "reversionary"/indemnity interest in residual funds (via cy pres → indemnity fund) that will be diminished by an excessive fee award, so it will be injured	Western Union lacks Article III standing; appeal dismissed
Nature of Western Union's interest in CSF	Class Counsel: CSF comprises class members' funds; Western Union disclaimed present interest	Western Union: contractual path may result in indemnity payments to Western Union from leftover funds; thus it has an interest	Court: Western Union has no present legally protectable interest in CSF; only a contingent right to possible future reimbursement from a separate indemnity fund
Injury-in-fact required for standing	Class Counsel: speculative future contingencies do not create concrete, imminent injury	Western Union: threatened state enforcement and refusal to accept cy pres creates substantial risk of future liability that could exceed indemnity funds	Court: risk is too speculative; no judgments exist, likelihood and amount of liability are uncertain, and Western Union failed to show a non-speculative deficiency
Causation/Traceability	Class Counsel: fee award is not the cause of States' decisions to enforce; independent actors control those choices	Western Union: larger attorney fee reduces States' pro rata shares and thus could increase enforcement actions	Court: no evidence fee size will alter States' behavior; traceability requirement not met

Key Cases Cited

Tennille v. Western Union Co., 785 F.3d 422 (10th Cir. 2015) (affirming district court approval of the class settlement)
Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (defendant may have an interest in return of excess unclaimed funds in certain settlement structures)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete and particularized injury, causation, and redressability)
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167 (2000) (elements of standing explained)
Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013) (allegations of possible future injury insufficient absent substantial risk)
Susan B. Anthony List v. Driehaus, 573 U.S. 149 (2014) (certainly impending or substantial risk standard for threatened injury)
Hollingsworth v. Perry, 570 U.S. 693 (2013) (standing is jurisdictional and required on appeal)