18th Annual Workplace Class Action Report - 2022 Edition

706 Annual Workplace Class Action Litigation Report: 2022 Edition reasoned that the settlement adequately and fairly compensated class members. The Court also held that the scope of the release and the notice to class members were both fair and reasonable. For these reasons, the Court granted Plaintiffs’ motion for preliminary settlement approval. Caldwell, et al. v. UnitedHealthcare Insurance Co., 2021 U.S. Dist. LEXIS 196392 (N.D. Cal. Oct. 12, 2021). Plaintiffs, a group of healthcare plan participants, filed a class action alleging that Defendant denied coverage of liposuction to treat a chronic health condition including lipedema. The parties ultimately settled the matter, and filed a motion for preliminary settlement approval. Under the terms of the proposed settlement, Defendant would put into effect a new medical policy that would consider liposuction as reconstructive and medically necessary to treat lipedema when certain criteria were met. Defendant also agreed to provide coverage for currently covered class members and provide class members without coverage who paid for the procedure with reimbursements. The Court denied the motion for settlement approval. First, the Court noted that the attorneys’ fee agreement – insofar as Defendant agreed not to challenge Plaintiffs’ fee request – was "a clear sailing agreement,” which the Ninth Circuit had held is "a red flag indicating a potentially collusive settlement." Id . at *2. The Court explained that the Ninth Circuit had previously found that clear sailing agreements carried a risk of enabling Defendant “to pay class counsel excessive fees and costs in exchange for counsel accepting an unfair settlement on behalf of the class.” Id . at *3. The Court further ruled that that settlement was not fair and reasonable, as class members could not know if they would qualify under the coverage criteria. The Court also reasoned that the waiver included in the agreement was invalid as it included all further claims except for a fund for out-of-pocket expenses. For these reasons, the Court denied the motion for preliminary settlement approval. Fruitstone, et al. v. Spartan Race, Inc. , 2021 U.S. Dist. LEXIS 95860 (S.D. Fla. May 21, 2021). Plaintiffs, a group of race participants, filed a class action alleging that Defendant violated the Massachusetts Consumer Protection Law by misrepresenting that its "Racer Insurance Fee," was used solely to purchase insurance on behalf of the race registrant, when in fact Defendant used the Racer Insurance Fees to defray administrative expenses and as a hidden profit item. Id . at *2. The parties ultimately settled the matter and the Court granted preliminarily approval of the proposed settlement agreement. After notice was distributed to class members, Plaintiffs sought final settlement approval. The Court granted the motion. Under the terms of the settlement, class members were entitled to elect to receive either: (i) one four-month free membership to the "Spartan+ Membership Program;" or (ii) one $5 electronic voucher per each paid registration during the class period, up to a maximum of four total electronic vouchers. Additionally, Defendant agreed to provide injunctive relief. Out of approximately 800,000 class members, only two objections were filed in opposition to the proposed settlement. The objectors asserted that the settlement offered nothing more than a "coupon" under the CAFA. Id . at *13. Having considered the relevant submissions, the Court found that the settlement was not a "coupon settlement" and it overruled the objections. Id . at *13-14. The Court also concluded that the settlement was fair, reasonable, and adequate, as there was no suggestion of fraud or collusion, the settlement provided immediate and substantial relief to the members of the settlement class, class counsel were well-positioned to evaluate the strengths and weaknesses of Plaintiffs’ claims, and if the litigation would have continued, Plaintiffs could have stood to recover nothing on behalf of a nationwide class. To the extent class members raced in future events, the Court reasoned that the injunctive relief would provide them with an additional direct value. Thus, the Court ruled that the settlement offered class members excellent relief, and thus it confirmed that the settlement was fair, reasonable, adequate, and in the best interests of the settlement class. For these reasons, the Court granted final settlement approval. Hilsley, et al. v. General Mills Inc., 2021 U.S. Dist. LEXIS 105648 (S.D. Cal. June 4, 2021). Plaintiffs, a group of consumers who purchased Defendant’s fruit flavored snacks, filed a class action alleging that the snack label was misleading because it falsely claimed that the snacks had "no artificial flavors" and were "naturally flavored," although they contained malic acid as an artificial flavoring. Id . at *2. Plaintiffs alleged violations of California Unfair Competition Law, California False Advertising Law, and California Consumer Legal Remedies Act, as well as breach of express and implied warranties. The parties ultimately settled the matter, and Plaintiffs filed a motion for preliminary settlement approval. Thereafter, a party in a related matter pending in Illinois, David Hayes, filed a motion to intervene in the action. The Court denied Plaintiffs’ motion and granted the motion to intervene. The Court determined that the proposed settlement was not fair or adequate to class members because it failed to contain any monetary payout for Plaintiffs’ claims. The Court also opined that the