Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour and Labor Code Class Actions (22nd Edition) 101 court on the grounds that there was “no reasonably foreseeable possibility” that a class would be certified, and that therefore CAFA’s jurisdictional requirements could not be satisfied.617 On appeal from the remand order, the Ninth Circuit disagreed, and held that, in the context of CAFA jurisdiction, the Red Cab rule applies “because no one suggests that a class action must be certified before it can be removed to federal court under the Act.”618 Further, the Ninth Circuit held that “[i]f a defendant properly removed a putative class action at the get-go, a district court's subsequent denial of Rule 23 class certification does not divest the court of jurisdiction, and it should not remand the case to state court.”619 The Ninth Circuit recently reaffirmed this holding in Madeira v. Converse, Inc. 620 There, the federal district court denied the plaintiff’s motion for class certification, and then sua sponte remanded the case back to California state court, reasoning that the court no longer had jurisdiction under CAFA. The Ninth Circuit reversed the district court’s decision, holding that “[w]here, as here, jurisdiction was proper at the time of removal, subsequent dismissal of class claims does not defeat the court's CAFA jurisdiction over remaining individual claims.”621 G. Settlement Process The enactment of CAFA has also brought changes to class action settlement procedures.622 In contingency fee cases, if a proposed settlement of a class action calls for provision of coupons to class members, the portion of any attorney’s fee award that is attributable to the coupons is based on the value to class members of the coupons that are actually redeemed.623 Alternatively, the fee award may be based on the lodestar method, which considers the amount of time the class counsel reasonably expended working on the action.624 The court may approve a coupon settlement only after a hearing and “a written finding” that the settlement is “fair, reasonable, and adequate for class members.”625 In True v. American Honda Motor Co., the district court reiterated that heightened scrutiny is necessary in reviewing coupon settlements.626 The court gave three reasons why such settlements are generally disfavored: “they often do not provide meaningful compensation to class members; they often fail to disgorge ill-gotten gains from defendant; and they often require class members to do future business with the defendant in order to receive compensation.”627 Nonetheless, coupon settlements can be 617 Id. at 1090. 618 Id. at 1091. 619 Id. at 1092. 620 826 Fed. App’x 634 (9th Cir. 2020). 621 Id. at 635. 622 28 U.S.C. § 1711. 623 See id. § 1712(a). 624 See id. § 1712(b) (1). 625 See id. § 1712(e). 626 True v. Amer. Honda Motor Co., 749 F. Supp. 2d 1052, 1069 (C.D. Cal. 2010). 627 Id. (citing Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1302 (S.D. Fla. 2007)).
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