In a matter of first impression, the U.S. Court of Appeals for the Tenth Circuit clarified the role of district courts in ruling on class action settlement agreements that contain “kicker” and “clear-sailing” agreements. In re Samsung Top-Load Washing Machine Marketing, Sales Practices 10th Circuit Spotlightand Products Liability Litigation, — F.3d. —, 2021 WL 1825685 (10th Cir. May 7, 2021). The circuit court held that district courts must apply “heightened scrutiny” to settlement agreements containing these provisions, because “the “presence of both agreements in a settlement agreement also suggests the class members may not be receiving all reasonable benefits.” Id. at *7.

Underlying Class Action Litigation

In 2015, some Samsung top-load washing machines experienced weakness in their door mechanisms, which allowed “water to spew out of the machine.” Id. at *2. Samsung, together with the Consumer Product Safety Commission, announced a voluntary recall program, which (1) provided free repair and one-year warranty, (2) gave consumers a rebate toward the purchase of a new washer, or (3) offered certain consumers a full refund. Id. This voluntary recall program failed to appease consumers, who filed putative class actions around the country against Samsung and many retailers who sold the machines. The Judicial Panel on Multidistrict Litigation (JPML) combined the various lawsuits into a single action that proceeded in the Western District of Oklahoma.