In the world of class actions, the preliminary approval stage of a proposed settlement is a major milestone. At this juncture, the selected claims administrator is ramping up to notify potential class members about the settlement. Historically, it has often been the responsibility of either plaintiffs’ or defense counsel to vet the capabilities and experience of their chosen administrator. But in California, we are seeing a trend in which certain courts are also increasing their scrutiny of the administrator selection process. We find this fascinating and expect this trend may continue across more state and federal courts.

Courts have long maintained strict requirements for the administration process. All administrators must adhere to the Federal Rule of Civil Procedure 23, including its requirements for legal notice and class member payment calculations. But courts have seldom required counsel to formally document the administrator selection process, let alone details of the proposed administrator’s fee terms, data security practices, potential conflicts of interest or financial relationships, particularly not at the preliminary approval stage.

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