Like most cases, few class actions are filed with the intent of taking them to trial, and the vast majority that survive beyond the pleadings stage settle. But unlike most cases, class action settlements require court approval, which has become more challenging to obtain. Over the last several years, a growing number of courts have rejected class settlements—including high-profile, multimillion-dollar agreements—and recent decisions show that many courts continue to regard class settlements with a high degree of skepticism. Given the time, effort and expense involved in negotiating such settlements—as well as the significant stakes often involved—practitioners seeking to settle class actions should pay close attention to issues courts have identified in the course of rejecting classwide deals.
This article explores a selection of recent federal cases in which courts rejected class settlements, analyzes factors that prompted the decisions, and discusses means for avoiding similar outcomes.
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