The Department of Justice’s Consumer Protection Branch Believes a Coupon-Driven Class Action Settlement Is “Unfair” and States it Is Cracking Down on “Unfair” Class Action Settlement Proposals

Is the government about to make it harder for companies to settle consumer class actions? The Department of Justice’s Consumer Protection Branch, in a Statement of Interest (Statement), has requested that a Judge set aside a proposed class action settlement that would enrich plaintiffs’ attorneys to the tune of nearly $2 million. Specifically, the DOJ argues that the settlement, in the form of coupons, would “transfer a massive $1.7 million windfall payment to plaintiffs’ counsel” and that such a payout outweighs the harm incurred by consumers. The DOJ, under the Class Action Fairness Act of 2005 (CAFA), receives proposed settlement notices from the participating defendants, and may issue a Statement of Interest to the presiding court if it believes a settlement is unfair or unreasonable. In Cannon v. Ashburn Corp., No. 1:16-cv-01452, 2016 WL 7130913 (D.N.J. Dec. 7, 2016), the plaintiffs alleged that a wine distribution member website, Wines…

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