Source - Developments in Class Action Law

Class Action Decisions Published August 2023

Highlights from this issue include:

Labeling Fraud. The Central District of California certified a class alleging skincare products sold under the brand name “C + Collagen” were misleadingly labeled because the products did not contain collagen, an ingredient associated with anti-aging effects; the product instead contained a small amount of an amino acid solution derived from corn, wheat and soy.

Class Action Waivers. The Fourth Circuit held “the time to address a contractual class waiver is before, not after, a class is certified.” In a case involving a Marriott data breach, all of the named plaintiffs had signed contracts including class action waivers, so the district court certified a class only of those who had signed such waivers, leaving the enforceability of such waivers for later proceedings. The Fourth Circuit held this was improper.

Standing. The Fifth Circuit discussed (but refused to decide) what standing theory applies. The court discussed the “class certification approach,” followed by the First, Third, Sixth and Ninth Circuits, and the “standing approach,” which is followed by the Second and Eleventh Circuits. The Fifth Circuit declined to adopt either approach, however, because it determined the plaintiffs had standing under either theory.

Class Action Settlements. The Second Circuit clarified some aspects concerning class action settlements. It held that Rule 23(e)(2) prohibits courts from applying a presumption of fairness to proposed settlements arising from an arms-length agreement. Courts evaluating the fairness, reasonableness and adequacy of a proposed settlement must consider the four factors outlined in Rule 23(e)(2) holistically, taking into account—among other considerations—the proposed attorneys’ fees and incentive awards. The Second Circuit also held that Rule 23(e) permits fair and appropriate incentive awards—i.e., incentive awards are not categorically prohibited.

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