A federal appeals panel appeared unlikely to unravel a controversial class action settlement over defects in Remington rifles, raising doubts that a low claims rate necessarily indicates there’s something inherently wrong with the notices that went out.
The settlement, designed to provide refunds or repair an estimated 7.5 million Remington Model 700 rifles with allegedly defective triggers, has been a target of critics because of its dismal claims rate. Attorneys general from 21 states filed contrasting amicus briefs in the case, divided over whether the settlement created a public safety hazard in failing to reach enough class members or had adequately attempted to compensate gun owners for economic injuries without infringing on their rights.
On Wednesday, Sarah Westcot, a senior associate at Bursor & Fisher in Walnut Creek, California, who represented two objectors to the settlement, told the U.S. Court of Appeals for the Eighth Circuit that a claims rate of 0.29 percent showed the notice plan was inadequate and, among other things, demanded reversal of the 2014 settlement’s approval.
“What it boils down to is a question of whether it is OK to approve a class settlement where the claims rate is just so appallingly low,” she said. Under Federal Rule 23 of Civil Procedure, lawyers are supposed to use the “best notice that is practicable” in reaching out to class members. “Direct mail notice gets the highest rates, and they simply chose to disregard that,” she said of the settlement’s lawyers.
But she got a lot of skepticism from the panelists: James Loken, a George H.W. Bush appointee; William Benton, an appointee of George W. Bush; and Donald Trump appointee Ralph Erickson, who joined the bench in October. The justices appeared dubious that just because class members hadn’t made claims didn’t mean the notice didn’t reach them.
“The way to reach particularly young people today may be completely off the charts in terms of what experts said 10 years ago,” Loken said. “Times change, and the law has general principles that have to be adaptable.”
They noted that class members could still make claims for several years, and the claims rate appeared to be going up regularly. They also pointed out that many class members might not have made claims because of concerns about the government taking their guns if they turned them over to Remington for repairs.
Plaintiffs attorney Kevin Parker at The Lanier Law Firm in Houston defended the deal, which resolved a case with numerous hurdles, such as statutes of limitations.
“The result of the defect is an unintentional discharge of the weapon, something everybody everywhere wants to avoid,” he said. “We want to get that fixed, and what this settlement does is provide away for that to happen.”
“The panel correctly recognized that the legal standard, which is the ‘best notice practicable under the circumstances’ means different things at different times,” Parker said in an interview. ”I think the panel understood that, and that’s right in line with the way we were looking at it, too.”
The Remington rifles were the subject of a CNBC report called “Remington Under Fire,” but Remington has denied the existence of such a defect. The settlement does not resolve lawsuits over injuries or deaths.
In 2015, District Judge Ortrie Smith of the Western District of Missouri refused to approve the settlement after the notice plan attracted only 2,327 claims—which he called an “appalling” claims rate. Lawyers in the case came up with a new plan, largely based on a “state-of-the-art social media campaign,” which raised the number of claimants to 22,000. Smith approved the deal, which includes $12.5 million in attorney fees and costs, but was still “concerned as to why more claims have not been submitted.”
Among the settlement’s critics are Todd Hilsee of The Hilsee Group in Philadelphia, who has worked with the Federal Judicial Center to develop class action notice standards. Hilsee has insisted that plans based on social media and emails are less effective than traditional postcards sent through the U.S. mail.
But a push to bring notice plans into the Internet age prompted the U.S. Judicial Conference’s Committee on Rules of Practice and Procedure to introduce a proposal that would encourage electronic notice plans.
That proposal should go into effect later this year, said John Sherk, a San Francisco partner at Shook, Hardy & Bacon, who represented Remington Arms Co., at Wednesday’s hearing. He insisted that the notice plan in the Remington settlement was “unprecedented.”
“It went way beyond as good as practicable,” he said. “It was the best that we could do.”