UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

SARA HAWES, et al.,

Plaintiffs, 

v.

MACY’S INC., et al., 

Defendant.

Case No. 1:17-cv-754 (Lead Case)

(Consolidated with 2:20-cv-81) 

JUDGE DOUGLAS R. COLE

OPINION AND ORDER

This case is about sheets.1 Specifically, Plaintiffs, on behalf of themselves and 

a proposed nationwide class, sued Macy’s, along with various textile manufacturers,2

alleging that Macy’s misrepresented the thread count in some of the bed sheets it 

sells, in turn misleading consumers and violating consumer protection laws. (See 

generally Compl., Doc. 1). After litigating for more than five years, the parties seek 

to put the matter to bed. They have agreed to a global class action settlement that 

creates a $10,500,000 common fund to settle all claims of a nationwide class of 

consumers. They now jointly move the Court to approve that settlement under 

Federal Rule of Civil Procedure 23(e). (See Mtns. for Final Approval, Docs. 153, 155).

As more fully discussed below, though, due to a concern about one aspect of the 

1 Technically, “this case” is actually two consolidated cases. Unless otherwise noted, though, 

the docket references are to the docket in 1:17-cv-754, which is the lead case.

2 The textile manufacturers were eventually dismissed or dropped from the lawsuit. (See Doc. 

38 (order dismissing Defendant AQ Textiles); Doc. 64 (amended complaint naming only 

different Macy’s entities as defendants)). 

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Settlement Agreement—the proposed cy pres distribution—the Court DENIES the 

motions for final approval and REJECTS the class action settlement.

BACKGROUND

A. Nature of the Suit and Procedural Background

The factual and procedural background to this case is lengthy and warrants 

only a cursory overview here. Sara Hawes and Amy Hill3 filed this class action 

lawsuit4 against Macy’s and several upstream textile manufacturers alleging that 

they deceptively mislabeled the thread counts on bed sheets. (Doc. 1, #52–62). The 

crux of their claim was that the common industry standard is to count each yarn as 

one thread, regardless of whether that yarn was single-ply yarn or multi-ply yarn, 

such that the thread count captured the number of threads woven into the fabric. (Id. 

at #58–59). The defendants allegedly did not follow that practice, instead counting 

every strand twisted into a single thread of yarn (multi-ply yarn) as a separate thread 

for purposes of the weave thread count, thereby dramatically increasing the thread 

count beyond what it would otherwise be. (Id. at #58–62).

According to Plaintiffs, the allegedly overstated thread count substantially 

affected consumers’ decisions because consumers often rely on thread count as a 

3 Amy Hill voluntarily dismissed her claims and is no longer a plaintiff. (See Doc. 73).

4 As noted above, there is a related case, Chiaraluce et al. v. Macy’s, Inc. et al., No. 2:20-cv81, that was filed on January 6, 2020. The Court consolidated the cases for purposes of 

administering the Settlement Agreement, and the filings in each case have been identical 

since mediation. For simplicity’s sake, the Court collectively refers to the cases as one and 

disposes of the pending settlement motions in both matters. In light of the rest of this opinion, 

Macy’s Motion to Dismiss (Case No. 2:20-cv-81, Doc. 10) and Chiaraluce’s Motion for Leave 

to Conduct Jurisdictional Discovery (Case No. 2:20-cv-81, Doc. 13) are DENIED as moot.

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proxy for quality. (Id. at #57). Because the defendants’ practices allegedly inflated the 

reported thread count on their sheets, Plaintiffs claimed that they, along with 

millions of other consumers, overpaid for those sheets. (Id. at #62).

Litigation ensued. Plaintiffs filed their class action complaint in November 

2017. (Doc. 1). AQ, the principal textile manufacturer, moved to dismiss for lack of 

personal jurisdiction, (Doc. 16), which the Court granted.5 (Doc. 38). Macy’s 

separately moved to dismiss, claiming Plaintiffs lacked standing and failed to state a 

plausible claim. (Doc. 17). The Court held that Plaintiffs had standing but failed to 

state a plausible claim for some of their counts. (Doc. 39, #392, 394, 396, 401). As a 

result, the Court dismissed some claims against Macy’s but allowed others to go 

forward. (Id.).

After the Court denied in part Macy’s motion to dismiss, Plaintiffs twice 

amended their complaint, dropping the textile manufacturers as defendants and 

seeking certification of a nationwide class or, alternatively, subclasses for every state. 

(See Am. Compl., Doc. 55; Third Am. Compl., Doc. 64). Following discovery, Plaintiffs

moved to formally certify the case as a class action. (Doc. 84). Macy’s then moved for 

summary judgment. (Doc. 117). The Court certified a California class, defined as 

everyone in California who bought CVC6 sheets from Macy’s between November 8, 

2013, and January 22, 2022. (Doc. 137, #4011). And the Court also partially granted 

5 At that time, the matter was assigned to another judge. The case was reassigned to the 

undersigned on August 1, 2022. (Doc. 141).

6 CVC stands for “chief value cotton,” the type of sheets at issue in this lawsuit. (Doc. 84, 

#1076).

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Macy’s motion for summary judgment as to one claim, leaving the substantial portion 

of Plaintiffs’ claims intact. (Op., Doc. 139, #4024).

The matter was then reassigned to the undersigned. (Doc. 141). Shortly 

thereafter, the parties engaged in mediation which produced the proposed class 

action settlement. The parties sought preliminary approval of the settlement (Doc. 

143), which the Court granted, (Doc. 144). Since then, class counsel moved for an

award of attorneys’ fees and expenses, (Doc. 147), and sought final approval of the 

class action settlement, (Doc. 153). Macy’s likewise moved for final approval of the 

settlement. (Doc. 155).

B. Terms of the Proposed Class Action Settlement

Under the proposed Settlement Agreement, Macy’s agreed to settle the claims 

of a nationwide class7 for a total sum of $10.5 million. (Proposed Settlement Agmt., 

Doc. 143-2, #4107). It also agreed to change the packaging on its sheets to include the 

language: “Thread count determined from a sample of a representative sheet by 

counting cotton yarns and by separating and counting adjacent parallel polyester 

yarns.” (Id.).

The Settlement Agreement distributes the $10.5 million fund as follows. First, 

the fund will satisfy any notice and administrative costs. (Id. at #4108). These costs 

include funding for the notice plan and claims administration. (Id.). Next, the 

7 As stated previously, the Court certified a California class before the parties engaged in 

mediation. (Doc. 137, #4011). The parties’ Settlement Agreement proposes a nationwide class 

of consumers. (Doc. 143-2 ¶ 1.37, #4104). The Court provisionally certified the nationwide 

class when it preliminary approved the class action settlement. (Doc. 144, #4254–55).

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remaining balance will go towards the class counsel’s attorneys’ fees, incentive 

payments for the named plaintiffs,8 and payouts to the class members who submit 

eligible claims. (Id.).

Section 6.1 of the Settlement Agreement details the claim distribution 

process—the specifics of how absent class members will be compensated from the 

fund. The agreement creates three categories of claimants who can collect under the

settlement:

• Class members whose purchases Macy’s can verify through its 

own records will receive $7.50 per unit of CVC Sheets purchased

(and could potentially receive a secondary distribution, as 

discussed below). [Category 1]

• Class members who provide proof of purchase through a receipt 

will receive $7.50 per unit of CVC Sheets purchased (and likewise 

may be eligible for a secondary distribution). [Category 2]

• Class members who attest under penalty of perjury that they 

purchased CVC sheets receive $2.50. This amount is capped at 

$2.50 per household (no matter how many sheets persons in the 

household claim to have purchased) and this category of claims is 

ineligible to receive a secondary distribution. [Category 3]

(Id.).

If, after attorneys’ fees, named plaintiff incentive awards, administrative 

expenses, and a single round of distribution to all eligible claimants, funds remain 

from the original $10.5 million, and it is “economically feasible” to make a second 

distribution, then settlement class members in Categories 1 and 2 will receive a 

second distribution. (Id. at #4109). In that second distribution, Category 1 and 2

claimants will receive their pro-rata share of the remaining funds, weighted 

8 The named plaintiffs include Sara Hawes and the plaintiffs from the 2020 case: Jonathan

Fontaine and Cassandra Chiaraluce.

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according to the purchase price that each claimant paid for his or her sheets, but 

capped at 50% of that purchase price. (Id.). If it is not economically feasible to make 

a second distribution, or if funds remain even after a second distribution, the

agreement provides that the remaining funds will go to the Public Interest Research 

Group (PIRG), a nonprofit advocacy organization that the parties chose. (Id.).9

The Settlement Agreement separately provides that any attorneys’ fees and 

“[i]ncentive [a]ward[s]” to the class representatives will come out of the common fund

but does not specify amounts. (Id. at #4113). Class counsel has since requested $3.5 

million in fees and $216,561.44 in litigation expenses. (Doc. 147-1, #4296, 4314). They 

also request an incentive award of $3,500 for Plaintiff Hawes, $1,500 for Plaintiff 

Chiaraluce, and $1,500 for Plaintiff Fontaine. (Id. at #4313).

C. Notice Plan and Results

The Settlement Agreement tasks the claim administrator (here, Angeion

Group, LLC) with notifying the class members of the settlement. Under the 

agreement, Angeion would effectuate notice by mail or email to ascertainable class 

members, maintenance of an informational website regarding the settlement, 

internet and print advertising, and a call center. (Doc. 143-2, #4134).

After the Court preliminarily approved the class action settlement and notice, 

the parties began the notice process. The template postcard designed for class notice

informed the class members that a settlement had been reached with Macy’s in a 

9 Based on the attorneys’ representations at the fairness hearing, it appears that the 

Defendant was primarily responsible for identifying the organization. 

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class action lawsuit about Chief Value Cotton sheets sold by Macy’s that were labeled 

with inaccurate thread counts. (Doc. 145-1, #4270). It also included details about who 

is in the settlement class, how to file a claim, and when the Court’s fairness hearing 

was scheduled. (Id.).

Under a heading reading “What does the Settlement provide?”, the notice read:

“The Defendants have agreed to pay [$10,500,000] into a Settlement Fund. After 

payment of Attorneys’ Fees and Costs, Incentive Payments, and Administrative 

Expenses, the funds remaining from the Settlement Amount will be used to pay all 

Eligible Claims.” (Id.). The notice said nothing about the possibility of a cy pres

award, did not disclose that any of the common fund could go to any third party, and 

did not name PIRG as the chosen recipient for such funds.

To help Angeion send out the above-mentioned postcard to the absent class 

members, Macy’s provided Angeion with 3,161,381 purchase records involving the 

sheets at issue. (Id. at #4266). After analyzing them, Angeion determined that there 

were 405,879 unique mailing addresses and 1,582,574 unique email addresses 

associated with those records. (Doc 153–3, #4474). Angeion sent notice via mail (to 

the former) and email (to the latter) on July 8, 2023. (Id. at #4474–75). Around that 

time Angeion also began its print publication, press release, and internet advertising 

campaign. (Id. at #4475–76). On July 3, 2023, it set up the settlement website, which

had 744,060 page views as of September 21, 2023. (Id. at #4477). At the fairness 

hearing, class counsel represented to the Court that, based on raw purchase record 

data, the estimated class size was around 2.5 million individuals. So considering only 

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the number of initial contacts Angeion made through the direct notice process, 

Angeion reached between roughly 63% (1,582,574 notice recipients assuming 

complete overlap between mailing and email addresses; 1,582,574/2,500,000=63.3%) 

and 80% of the class (1,988,453 notice recipients assuming no overlap between 

mailing and email addresses; 1,988,453/2,500,000=79.53%).

The notice plan has already proven remarkably successful at generating claim 

submissions. As of October 18, 2023, Angeion received 608,346 claim form 

submissions. (Doc. 159, #4606). Class counsel estimates that Angeion will receive 

over one million claims before the close of the claims period. While Angeion’s report 

did not specify how many of those submissions included a proof of purchase, class 

counsel advised the Court at the fairness hearing that approximately 10% of the 

claims could be verified either by internal record or proof of purchase.

In response to the notice plan, as of September 21, 2023, only 59 class members 

opted out. (Doc. 153-3, #4480). No class members objected to the proposed settlement. 

(Id.; Doc. 153-1, #4458).

JURISDICTION AND CHOICE OF LAW

This Court has subject matter jurisdiction under the Class Action Fairness Act, 

28 U.S.C. § 1332(d), because there are more than 100 class members, the amount in 

controversy exceeds $5,000,000, and minimal diversity exists.10 Plaintiffs assert no 

10 Plaintiff Sara Hawes is a California citizen and Macy’s is a citizen of Delaware and Ohio. 

(Doc. 64, #835).

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live federal claims,11 so the Court’s jurisdiction at this point is exclusively diversity 

based.12

The Court notes that because, under the Erie doctrine, class action settlements 

in diversity actions present peculiar choice of law problems that courts often 

overlook.13 Admittedly, it is perhaps unsurprising that happens. The parties have 

already agreed to a settlement amount and a distribution structure, so in some sense 

the parties no longer care what law applies, nor what claims are still live or viable. 

Beyond that, in cases involving far-flung or nationwide classes, class actions often 

potentially involve many states’ laws, so determining what law controls is not always 

straightforward. Compounding the problem, the parties often tender a proposed (and 

often barebones) settlement approval order, which rarely addresses the choice-of-law 

issue. But that issue can matter. Both because of the constitutional implications that 

attend a court’s choice of law, and because the claims alleged (and the choice of law 

that accompany them) may affect a district court’s decision of whether to approve the 

class action settlement in at least two significant ways.

11 Plaintiffs previously asserted a federal claim in the original complaint under the 

Magnuson-Moss Warranty Act, 15 U.S.C. § 2310, but the Court dismissed that claim. (Doc. 

39, #393–94). Plaintiffs have not asserted any other federal claims in their amended 

complaints.

12 Given the earlier inclusion of a federal claim, the Court could perhaps instead exercise 

ongoing supplemental jurisdiction under 28 U.S.C. § 1367. The Court declines to do so, 

though, because federal courts should generally decline to assert supplemental jurisdiction 

when all federal claims have been dismissed. Sharwell v. Selva, 4 F. App’x 226, 227 (6th Cir. 

2001).

13 Ultimately it matters little whether the case is in this Court due to diversity jurisdiction 

or supplemental jurisdiction. Even if it is the latter, state substantive law still controls on 

the state law claims. United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966).

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First, a district court must finally certify the settlement class before approving 

the settlement. See Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 620 (1997). And for 

Rule 23(b)(3) class actions, a district court must first ensure that 23(b)(3)’s 

requirements are satisfied. One of those requirements, that “questions of law or fact 

common to class members predominate”, necessarily requires reference to the claims 

for relief. Id. at 623 n.18. For how could a district court determine whether a common 

question predominates—or is “more prevalent or important”—than uncommon 

questions but by reference to their legal significance? Tyson Foods, Inc. v. 

Bouaphakeo, 577 U.S. 442, 453–54 (2016). But the significance of a given question 

may depend on the results of the choice of law analysis, rendering that analysis a 

potentially important part of the certification decision. 

Second, and relatedly, in diversity cases, a federal court must apply 

substantive state law and federal procedural law. Hanna v. Plumer, 380 U.S. 460, 

465 (1965); Erie R. Co. v. Tompkins, 304 U.S. 64, 78–79 (1938). And attorneys’ fees 

awards, particularly when they depend on the outcome of the suit (as is almost always 

the case in class actions) often fall on the “substantive” side of the Erie line. See 

Chambers v. NASCO, Inc., 501 U.S. 32, 52 (1991). So the very standards and rules 

that govern a district court’s award of attorneys’ fees often stem from state law rather 

than federal law.

But which state’s law? Plaintiffs here assert several state law claims, including 

a Missouri consumer protection law claim, several California consumer protection 

law claims, and several common law claims including common law fraud, breach of 

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express warranty, and unjust enrichment. (See Doc. 64, #853–866). The common law

claims are universally pleaded. That is, Plaintiffs asserted generic common law

claims recognized in all 50 states. While Plaintiffs attempt to universally plead their 

consumer protection claims, (See id. at #853 n.4), they cannot do so for the reasons 

expressed below. The Court will evaluate each category separately, starting with the 

consumer protection claims.

A. Consumer Protection Claims

The Court concludes that Plaintiffs fall short in their attempt to universally 

plead their consumer protection act claims because claiming that “substantially 

similar statutes” exist in all other states is insufficient. (Id.). Federal Rule of Civil 

Procedure 8(a)(2) requires a plaintiff to include in her pleading a “a short and plain 

statement of the claim showing that the pleader is entitled to relief.” (Emphasis 

added). If the laws of different states involve the same elements and are sufficiently 

similar, a plaintiff’s assertion of a general common law claim can satisfy Rule 8. But

where one state’s version of some claim (whether common law or otherwise) 

materially differs from the elements of other states’ claims, ignoring that difference 

and simply alleging “substantial similarity” among various state laws does not satisfy 

Rule 8. That is so because when raising claims which differ across jurisdictions, 

Plaintiffs do not provide a short and plain statement of the claim. Id. Rather, they 

provide a short and plain statement of a claim and seek to raise numerous other, 

dissimilar claims by that statement—a statement which fails to describe those 

dissimilar claims in any meaningful way.

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Those concerns apply to the consumer protection claim here. California and 

Missouri consumer protection law, which is what Plaintiffs cite in the Complaint,

differ from other states’ laws in significant ways. California’s consumer protection 

law statute does not require proof of knowledge or intent, while Pennsylvania’s or 

Ohio’s, for example, do require such a showing. See, e.g., Cimoli v. Alacer Corp., 587 

F. Supp. 3d 978, 990 (N.D. Cal. 2022) (contrasting California’s and Pennsylvania’s 

consumer protection laws); Durnell’s RV Sales Inc. v. Beckler, 2023-Ohio-3565, ¶ 42

(3d Dist.) (Ohio’s statute requires proof of knowledge). And Missouri’s consumer 

protection statute does not require proof of justifiable reliance by the consumer, while 

California’s does. Tershakovec v. Ford Motor Co., Inc., 79 F.4th 1299, 1312 (11th Cir. 

2023) (Missouri statute); Cal. Med. Ass’n v. Aetna Health of Cal. Inc., 532 P.3d 250, 

264 (Cal. 2023) (California statute). Because the statutes vary widely from state to 

state, Plaintiffs’ attempt to plead generic nationwide claims under all 50 states’ 

consumer protection laws fails Rule 8’s requirement of a short and plain statement.14

Because the Court finds that Plaintiffs have not pleaded consumer protection 

claims from every state, they now face a new hurdle. The parties seek to certify a 

nationwide class—not just a California or Missouri class. (Doc. 143-2, #4104). To do 

so, Plaintiffs must assert claims that can govern the entire class. In re 

14 Moreover, even if Plaintiffs had pleaded 50 separate consumer protection law claims, one 

for each state, the Court would then face the question of whether the divergence among the 

states’ laws renders such claims unsuited to class adjudication. In re Am. Med. Sys., Inc., 75 

F.3d 1069, 1085 (6th Cir. 1996). The Court’s problem is not so much that Plaintiffs were not 

sufficiently specific, but that, because of the divergent legal landscape and Rule 8’s 

requirements, all that Plaintiffs actually pleaded were two causes of action: a California claim 

and a Missouri claim.

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Bridgestone/Firestone, Inc., 288 F.3d 1012, 1015 (7th Cir. 2002) (“No class action is 

proper unless all litigants are governed by the same legal rules.”). So to certify a class 

as to the consumer protection claims, the Court must find that California or Missouri 

laws, which are the only specific consumer protection laws Plaintiffs cite, govern 

every consumer’s purchase—nationwide—of Macy’s CVC sheets during the relevant 

time period. But the Supreme Court’s decision in Phillips Petroleum Co. v. Shutts, 

472 U.S. 797 (1985), forecloses that result here. Shutts involved a Kansas court 

applying Kansas law to a nationwide class action even though the nature of the suit—

royalties over oil and gas leases—centered on contracts that almost entirely took 

place out of state. Id. at 814–16. The Supreme Court held that applying Kansas law 

violated the Due Process Clause and the Full Faith and Credit Clause because 

Kansas did not have “a significant contact or a significant aggregation of contacts” 

with the dispute that could create a legitimate state interest allowing Kansas law to 

apply. Id. at 818–23.

So too here. The parties have not shown that either California or Missouri has

“significant contact” or an “aggregation of contacts” with the purchasing transactions 

of individuals outside their borders. Those transactions (relative to California and 

Missouri) took place by foreign citizens in a foreign state with a foreign corporation. 

The Court, therefore, cannot constitutionally apply California or Missouri consumer 

protection law to the entire nationwide class’s claims.

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B. Common Law & UCC Claims

But all is not lost. Plaintiffs also assert two common law claims—fraud and

unjust enrichment—along with a UCC breach of express warranty claim. (Doc. 64, 

#861–66). Federal courts sitting in diversity apply the choice of law principles of the 

forum state—in this case, Ohio. Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 

328 F.3d 870, 873 (6th Cir. 2003). But under Ohio’s choice-of-law principles (and 

virtually every other state’s), an extensive choice-of-law analysis is not necessary 

where no conflict exists between the laws at issue. McDonald v. Williamson, 2003-

Ohio-6606, ¶ 7 (8th Dist.). And where no conflict exists, the Constitution does not 

prohibit the application of that state’s law extraterritorially. Shutts, 472 U.S. at 

816.15

Here no conflict exists as to these three claims. Ohio’s version of common law 

fraud is virtually identical to the Restatement’s.16 Compare State ex rel. The 

Illuminating Co. v. Cuyahoga Cnty. Ct. of Common Pleas, 776 N.E.2d 92, 97–98 (Ohio 

2002) with Restatement (Second) of Torts § 525 (Am. L. Inst. 1977). Same with unjust 

enrichment. Compare Padula v. Wagner, 37 N.E.3d 799, 813 (Ohio Ct. App. 2015) 

with Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a (Am. L. 

Inst. 2011). As for the breach of warranty claim, Ohio has adopted Article 2 of the 

Uniform Commercial Code (UCC), which codifies the legal standards for the creation 

15 Or, perhaps more accurately, no cognizable injury results from extraterritorial application 

when the substance of the law in the various states is the same. Shutts, 472 U.S. at 816.

16 The Court finds that the common law claims asserted are sufficiently uniform that 

reference to the Restatement suffices to demonstrate the lack of a conflict. Compiling 50 

states’ versions of common law claims is unnecessary and cumbersome, to say the least.

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(and breach) of express warranties in § 2-313. See Ohio Rev. Code § 1302.26. The

same is true of the vast majority of other states.17 The Court finds that no conflict 

exists and will therefore apply Ohio law to the nationwide class for the common law

and UCC claims.

C. Settlement Agreement

One final preliminary point. The Settlement Agreement contains a choice-oflaw provision, stating that Ohio law will govern the contract and its terms. (Doc. 143-

2, #4122). And that choice of law governs unless “the chosen state has no substantial 

relationship to the parties or the transaction and there is no other reasonable basis 

for the parties’ choice.” Schulke Radio Prods., Ltd., v. Midwestern Broad. Co., 453 

N.E.2d 683, 686 (Ohio 1983) (citing Restatement (Second) of the Conflict of Laws 

§ 187 (Am. L. Inst. 1971)). The parties had a reasonable basis for choosing Ohio law. 

During the time that Macy’s sold the sheets at issue in its stores, Macy’s was 

headquartered in Ohio, and its operational decisions were presumably based there. 

(Doc. 1, #55). The Court will therefore apply Ohio law in assessing the terms of the 

Settlement Agreement.

LAW AND ANALYSIS

A. Final Class Action Certification

Before the Court can evaluate the fairness of the proposed settlement, it must 

certify the settlement class. Amchem Prods., Inc., 521 U.S. at 620. For settlement 

17 Louisiana has not adopted Article 2 of the UCC, Sale of Goods, which is the applicable 

article here. And, as a civil law jurisdiction, rather than a common law one, some aspects of 

the other common law causes of action may be different in Louisiana. 

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purposes, the parties agreed to a nationwide class consisting of all persons in the 

United States who bought CVC sheets from Macy’s, supplied by AQ, between 

November 8, 2013, and March 24, 2023. (Doc. 143-2, #4104). The Court provisionally 

certified that class when it preliminarily approved the settlement. (Doc. 144, #4254–

55).

Under Amchem, the Court must ensure that the proposed settlement class 

meets the requirements of Rule 23 (other than manageability concerns of 23(b)(3)(D)). 

521 U.S. at 620; see also Whitlock v. FSL Mgmt., LLC, 843 F.3d 1084, 1091 (6th Cir. 

2016). Rule 23 allows a class to be certified only if: 

(1) the class is so numerous that joinder of all members is impracticable; 

(2) there are questions of law or fact common to the class; (3) the claims 

or defenses of the representative parties are typical of the claims or 

defenses of the class; and (4) the representative parties will fairly and 

adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). On top of the Rule 23(a) requirements, a class must satisfy one 

of the conditions of Rule 23(b). In this case, the parties point to Rule 23(b)(3), which 

requires “that the questions of law or fact common to class members predominate 

over any questions affecting only individual members, and that a class action is 

superior to other available methods for fairly and efficiently adjudicating the 

controversy.”

1. Numerosity, Commonality, Typicality, and Adequacy

The Court finds that all four Rule 23(a) requirements are met as to the common 

law and UCC breach of warranty claims. The parties stipulated to the numerosity 

requirement, (see Doc. 111), which is independently supported by the over 2.5 million 

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potential claimant class size. See, e.g., Hunter v. Booz Allen Hamilton Inc., No. 2:19-

cv-00411, 2023 WL 3204684, *3 (S.D. Ohio May 2, 2023) (647 class members meets 

numerosity requirement).

Commonality is also satisfied. To demonstrate the existence of questions of law 

or fact common to the class, Plaintiffs must show that the claims of the class “depend 

upon a common contention” that is “of such a nature that it is capable of classwide 

resolution” such that determination of the contention’s “truth or falsity” will resolve 

a central issue to the claims “in one stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 

338, 350 (2011). A central issue to Plaintiffs’ common law and UCC claims18 is 

whether Macy’s misrepresented, by deviating from industry standards, the thread 

count in its sheets. See Illuminating Co., 776 N.E.2d at 97–98 (requiring 

misrepresentation of material fact as an element of the common law tort of fraud).

Whether Macy’s did so is a question of fact capable of classwide resolution. Similarly, 

Macy’s intent or knowledge of the purportedly inaccurate thread count is a common 

question, at least as to the common law claims,19 the answer to which would not differ 

among class members.

The class also satisfies typicality because the named plaintiffs’ claims “arise[]

from the same event or practice or course of conduct that gives rise to the claims of 

18 Because the Court cannot constitutionally apply California or Missouri law to the 

nationwide class, the questions of fact or law related to Plaintiffs’ consumer protection law 

claims do not meet the commonality requirement. Accordingly, the Court does not certify a 

nationwide class as to the consumer protection claims. See Fed. R. Civ. P. 23(c)(1)(B) (“An 

order that certifies a class action must define the class and the class claims.”).

19 Breach of warranty under the UCC does not have an intent requirement.

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other class members.” Miller v. Charter Nex Films - Delaware, OH, Inc., No. 2:18-cv1341, 2020 WL 2896913, *4 (S.D. Ohio June 2, 2020) (cleaned up). The named 

plaintiffs’ theory of the case is virtually identical to that of every other class 

member—they bought mislabeled sheets for a higher price than they would have paid

but for the mislabeling.

Lastly, the named plaintiffs “fairly and adequately protect[ed] the interests of 

the class.” Fed. R. Civ. P. 23(a)(4). Class representatives adequately represent the 

rest of the class when (1) they share common interests with the absent class 

members, and (2) vigorously “prosecute the interests of the class through qualified 

counsel.” Hunter, 2023 WL 3204684, at *4 (cleaned up). As to the first, the Court has 

some misgivings about whether the interests of the class representatives adequately 

align with the rest of the class when a proposed settlement agreement, like this one, 

handsomely rewards the representatives far more than the rest of the other class

members. But despite the possibly perverse incentives that such a structure may 

produce, it seems that the award sought for the named plaintiffs did not impair the 

class’s interests in this case. The named plaintiffs prosecuted this case for over five 

years to obtain relief for the rest of the class. Hawes herself was deposed. (Doc 84–

11). Class counsel successfully defended the viability of the class action claims against 

a motion to dismiss and a motion for summary judgment. The Court finds that the 

class representatives, through their counsel, have adequately protected the interests 

of the class. Thus, the Court finds that all the Rule 23(a) factors have been satisfied.

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2. Predominance and Superiority

The Court likewise finds that the class action meets Rule 23(b)(3)’s

requirements: (1) that the common question to the class “predominate[s],” and 

(2) that a class action is superior to other adjudication methods. 

To evaluate predominance, the Court must first determine which issues of fact 

or law are common to the class and then weigh their predominance against individual 

questions which vary from class member to class member. Martin v. Behr Dayton 

Thermal Prods. LLC, 896 F.3d 405, 413 (6th Cir. 2018). Factors relevant to that 

balancing test include: “(A) the class members’ interests in individually controlling 

the prosecution or defense of separate actions; [and] (B) the extent and nature of any 

litigation concerning the controversy already begun by or against class members.” 

Fed. R. Civ. P. 23(b)(3).

The common questions of fact outweigh any questions which may differ among 

class members. Using the common law tort of fraud as an example, the common 

questions of fact include (1) whether Macy’s misrepresented the thread count of its 

sheets at all (the misrepresentation element) and (2) whether Macy’s knew of the 

misrepresentation and intended to defraud its consumers (the scienter elements). 

Illuminating Co., 776 N.E.2d at 97–98. Adverse answers to both questions come close 

to a prima facie case of fraud. Accordingly, class members have a significant interest 

in having those questions answered for the entire class, particularly considering the 

low value of any individual claims and the amount of discovery received during this 

litigation relevant to those elements.

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The only uncommon questions are (1) whether the class member justifiably 

relied on the misrepresentation, and (2) damages. Id. Those questions do not tip the 

scale against certification. Individual answers to the reliance and damages elements 

are not difficult to prove, nor do they require extensive discovery.

As to superiority, the Court considers the difficulties of managing a class 

action, the alternative adjudication methods to a class action, and the nature of the 

class claims. See Martin, 896 F.3d at 415–16 (6th Cir. 2018) (citation omitted). Any 

manageability difficulties are irrelevant at this stage where the Court has already 

managed over five years of litigation and certifies the class for settlement purposes 

only. Alternative adjudication methods—presumably individual suits by individual 

claimants—would be inferior to class adjudication, especially given the nature of the 

class claims and the quantum of each claimant’s potential damages here. Individual 

trials would be costly for both the judicial system and defendants. Plaintiffs would 

suffer too, as the small value of individual damages would likely dissuade most if not 

all class members from filing suit. See id. at 416 (“[S]mall awards weigh in favor of 

class suits.”)). Class adjudication, therefore, is superior to all other methods at this 

stage.

The Court finds that the common questions of fact predominate and that a 

class action is superior to other adjudication methods. The Court accordingly finally 

certifies the nationwide class proposed in the Settlement Agreement. (See Doc. 143-

2, #4104).20

20 The Court also finally appoints Michael McShane of Audet & Partners LLP, Charles 

LaDuca of Cuneo Gilbert & LaDuca, Charles E. Schaffer of Levin Sedran & Berman, Stuart 

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B. Fairness of the Proposed Settlement

Having certified the class, the Court next turns to the proposed settlement. 

Unlike most settlements, class action settlements require court approval under 

Federal Rule of Civil Procedure 23(e). Before approval, the Court must hold a hearing 

on the proposed settlement and find that the settlement is “fair, reasonable, and 

adequate.” Fed. R. Civ. P. 23(e)(2). Factors that the Court must consider when 

determining whether a settlement is “fair, reasonable, and adequate” include: 

(1) the risk of fraud or collusion; (2) the complexity, expense and likely 

duration of the litigation; (3) the amount of discovery engaged in by the 

parties; (4) the likelihood of success on the merits; (5) the opinions of 

class counsel and class representatives; (6) the reaction of absent class 

members; and (7) the public interest.

Int’l Union, United Auto., Aerospace, and Agr. Implement Workers of Am., et al. v. 

Gen. Motors Corp. et al., 497 F.3d 615, 631 (6th Cir. 2007).

International Union’s list of relevant factors predates amendments to Rule 23 

in 2018. Before the amendments, Rule 23 required a court to find only that the 

settlement was “fair, reasonable, and adequate,” with no elaboration as to what 

factors were relevant to that finding. The 2018 amendments instruct the Court to 

consider whether:

(A) the class representatives and class counsel have adequately 

represented the class; 

(B) the proposal was negotiated at arm’s length; 

(C) the relief provided for the class is adequate, taking into account: 

(i) the costs, risks, and delay of trial and appeal; 

L. Cochran of Cochran Law PLLC, and Drew T. Legando of Merriman Legando Williams & 

Klang, LLC as class counsel under Rule 23(c), (g). The Court has considered the factors in 

Rule 23(g) and finds that counsel’s conduct in this litigation warrants final appointment as 

class counsel.

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(ii) the effectiveness of any proposed method of distributing relief 

to the class, including the method of processing class-member 

claims; 

(iii) the terms of any proposed award of attorney’s fees, including 

timing of payment; and 

(iv) any agreement required to be identified under Rule 23(e)(3); 

and 

(D) the proposal treats class members equitably relative to each other.

Fed. R. Civ. P. 23(e)(2).

Comparing the two sets of factors reveals considerable overlap. International 

Union factor 1 folds into whether the proposal was “negotiated at arm’s length.” 

Factors 2–4 involve what is essentially a detailed inquiry into the “costs, risks, and 

delay of trial and appeal.” Factors 5–6 assess the opinions of class counsel, named 

plaintiffs, and absent class members—a substantially similar consideration as to 

whether the “class representatives and class counsel have adequately represented 

the class.” Factor 7, lastly, is a broadly formulated factor designed to ensure the 

adequacy of representation, the absence of fraud or collusion, and the equitable 

treatment of class members—something the totality of Rule 23(e)(2) ensures.

Because the International Union factors are largely subsumed in the 2018 

amendments to Rule 23, the Court will not separately analyze each International 

Union factor but rather will evaluate the settlement under the four factors identified 

in Rule 23(e)(2) in sufficient detail to also satisfy International Union. As described 

more fully below, doing so, the Court finds that the class action settlement is not “fair, 

reasonable, and adequate” under Rule 23(e)(2), but solely in one regard. Specifically, 

the Settlement Agreement’s cy pres award unfairly and unreasonably diverts class 

funds to an unrelated organization that does not benefit the class. But before 

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discussing the Court’s reasoning with respect to the cy pres award, the Court will 

analyze the totality of the agreement to assist the parties in the event they wish to 

amend the Settlement Agreement or seek appeal of this decision.

1. Adequacy of Representation

Rule 23(e)(2)(A) instructs the Court to consider whether the class 

representatives and class counsel have “adequately represented the class.” This

provision mirrors the adequacy prong of Rule 23(a) that the Court analyzed when 

certifying the class. But Rule 23(e)(2)(A), as a settlement approval requirement, 

requires the Court to consider adequacy of representation in relation to the 

settlement terms and notice process.

The settlement terms and notice process show that class representatives and 

counsel have adequately represented the rest of the class. At the fairness hearing, 

counsel for both the class and Macy’s disclosed that a key battle in the settlement 

negotiations was whether to structure the settlement as a common-fund settlement 

or a claims-made settlement. Class counsel pushed for, and ultimately achieved, a 

common-fund settlement to provide both adequate relief for the class and adequate 

deterrence against similar behavior on Macy’s part in the future. The result of the 

negotiation was the deal described above.

The reaction of absent class members further supports the adequacy of class 

counsel’s representation. Only 59 class members have opted out of a class of around

2.5 million people. (Doc. 153-3, #4480). Not a single class member has objected. (Id.; 

Doc. 153-1, #4458); see Olden v. Gardner, 294 F. App’x 210, 217 (6th Cir. 2008) (79 

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objectors out of an 11,000-member class “tend[ed] to support a finding that the 

settlement is fair”).

2. Arm’s Length Negotiations

The Court is satisfied based on counsel’s representation at the fairness hearing 

that the settlement was negotiated at arm’s length. Each party entered mediation 

with separate sets of goals and each extracted concessions from the other. The Court 

therefore presumes the settlement negotiations were not plagued by fraud or 

corruption. See Todd S. Elwert, Inc. DC v. All. Healthcare Servs., Inc., 2018 WL 

4539287, *2 (S.D. Ohio Sept. 21, 2018).

3. Adequacy of Relief

Rule 23(e)(2)(C) asks whether “the relief provided for the class is adequate.” To 

assess the adequacy of relief, the Court considers: (1) “the costs, risks and delay of 

trial and appeal”; (2) “the effectiveness of any proposed method of distributing relief 

to the class”; and (3) “the terms of any proposed award of attorney’s fees.”21 Id. 

The relief provided in the settlement (at least for those whose purchases are

verifiable by Macy’s business records or who can provide proof of purchase) likely 

meets or exceeds what any class member could have procured by an individual 

lawsuit. While Plaintiffs’ claim for relief could be construed as a request for complete 

refunds of the purchase price of their sheets, (see Doc. 64, #866–67), that request does 

21 The parties identified no agreements (other than the Settlement Agreement) that are 

relevant to the Court’s consideration, so the fourth adequacy of relief prong is not relevant. 

See Fed. R. Civ. P. 23(e)(2)(C)(iv).

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not present a viable theory of restitution.22 See Restatement (Third) of Restitution 

and Unjust Enrichment § 51 (Am. L. Inst. 2011) (“[T]he unjust enrichment of a 

conscious wrongdoer ... is the net profit attributable to the underlying wrong.”) 

(emphasis added). The true theory of injury underlying Plaintiffs’ claims was the 

failure to fully realize the represented and expected value of their sheets—an injury 

quantifiable by subtracting the purchase price from the expected value. At the 

fairness hearing, counsel estimated that the injury accounted for about 20% of the 

purchase price of the sheets.

Under this metric, the class members with Category 1 or 2 claims will fully 

recover (because they will likely receive 50% of the purchase price of their sheets 

through two distributions) and could not have done better at trial. Indeed, even the 

first distribution ($7.50), which represents about 20% of the average sale price for the 

bed sheets, probably constitutes near complete recovery for the reason noted 

immediately above. Admittedly, the rest of the class will receive less than that 

amount. But that discount reflects both (1) the risk discount of a settlement versus a 

trial and (2) the risk that unverified claims may wrongly deplete the common fund 

(as the claimant may not have actually purchased sheets)—a reasonable limitation 

on recovery.

22 While the equitable remedy of rescission may allow for the undoing of a transaction (and 

thus the full refund of a purchase price upon the return of the product) under many 

circumstances, see Versatile Helicopters, Inc. v. City of Columbus, 548 F. App’x 337, 340 (6th 

Cir. 2013), class actions are unsuited to that remedy, Gawry v. Countrywide Home Loans, 

Inc., 640 F. Supp.2d 942, 962 (N.D. Ohio 2009).

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The adequacy of the settlement’s proposed relief is further evidenced when 

considered against the costs of continued litigation. At the time the parties negotiated 

the Settlement Agreement, there were no low-cost steps remaining in the litigation. 

The Court had certified a California class and denied both a motion to dismiss and a 

motion for summary judgment. (See Docs. 137, Doc. 39, 139). The parties had 

engaged in discovery. The prospect of a jury trial loomed. The likely costs of trial 

compared to the possibility of marginally better recovery for the class show that the 

Settlement Agreement provides adequate relief.

The proposed relief under the settlement is not merely a nominal award 

unlikely to be distributed to the class. As detailed above, over 600,000 class members 

have already submitted claims. Class counsel estimates that number will exceed one 

million before the end of the claims period. That accounts for around 40% of the class. 

For low-value-claim class actions like this one, a 40% distribution rate weighs 

towards a finding of adequate relief.

Lastly, the proposed attorneys’ fees award does not weigh against the adequacy 

of the class recovery. While the Court will not opine on whether it would approve the 

attorneys’ fees awards (given that the Court is rejecting the settlement), it will note 

that the fees are reasonable enough for fairness purposes under Rule 23(e). And, in 

any event, the Settlement Agreement doesn’t require payment of any specific amount 

of attorneys’ fees, it just says that class counsel will seek them. So any 

unreasonableness as to that amount actually sought could be addressed separately.

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4. Equitable Treatment Among Class Members

The settlement does not technically treat all class members equally. Category 

1 and 2 claimants receive $7.50 on a first-round distribution and up to 50% of the 

purchase price of their sheets on a second round. (Doc. 143-2, #4108–09). Category 3 

claimants receive a capped amount of $2.50. (Id.). But, while the distribution scheme 

may not treat members strictly equally, it does treat them equitably. Category 1 and 

2 claimants receive more from the fund because either they or Macy’s can prove that 

they in fact purchased the sheets at issue in the lawsuit. Category 3 claimants, while 

required to swear under penalty of perjury that they purchased sheets, need not 

provide actual proof. Because “[i]t is reasonable to allocate the settlement funds to 

class members based on ... the strength of their claims on the merits,” the Court finds 

that the distribution scheme treats class members equitably. Grady v. RCM Tech., 

Inc., No. 5:22-cv-842, 2023 WL 3327093, *11 (C.D. Cal. May 2, 2023) (citation 

omitted).

Separately, the named plaintiffs’ requested incentive award gives the Court 

some concerns about equitable treatment. But as the Court alluded to above in 

discussing attorneys’ fees, the motions for final approval of the Settlement 

Agreement, (Docs. 153, 155), are distinct from the motion for attorneys’ fees, incentive 

awards, and other expenses (Doc. 147). The Settlement Agreement itself says nothing 

about the amount of incentive awards, only that class counsel will seek them, and 

any awarded amount would come out of the common fund. (Doc. 143-2, #4113). So the 

only question at this juncture—in assessing whether the settlement treats class 

members equitably—is whether the inclusion of potential incentive awards 

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categorically renders a settlement agreement inequitable and invalid under Rule

23.23

The Court acknowledges that the Sixth Circuit has never explicitly authorized 

incentive awards in class actions. But it has not precluded them either. In re Dry Max 

Pampers Litig., 724 F.3d 713, 722 (6th Cir. 2013). And many other circuits have 

approved the practice. Moses v. New York Times Co., 79 F.4th 235, 253–56 (2d Cir. 

2023); Camp Drug Store, Inc. v. Cochran Wholesale Pharm., Inc., 897 F.3d 825, 834 

(7th Cir. 2018); Tussey v. ABB, Inc., 850 F.3d 951, 961–62 (8th Cir. 2017); In re Apple 

Inc. Device Performance Litig., 50 F.4th 769, 785–87 (9th Cir. 2022); but see Johnson 

v. NPAS Sols., LLC, 975 F.3d 1244, 1255–61 (11th Cir. 2020) (holding that class 

action incentive awards are per se impermissible). Even the Supreme Court has 

hinted at their validity. China Agritech, Inc. v. Resh, 138 S. Ct. 1800, 1811 n.7 (2018).

And the Court can see some pragmatic reasons supporting their use. Particularly in 

low-value-claim class actions, such awards help induce the named plaintiffs to step 

forward and participate in the suit when otherwise they would be economically 

disincentivized from bringing a legally valid claim. See Camp Drug Store, 897 F.3d 

at 834. And at the same time, they also help ensure that absent class members do not 

“free ride” off the class representatives’ efforts. Moses, 79 F.4th at 245 (citation 

omitted).

23 Whether a court’s award of an incentive payment to class representatives is authorized by 

law or permissible in scope is of course distinct from whether such an award is equitable 

under Rule 23. The Court here analyzes only the latter.

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The Court is persuaded by the consensus of authority and finds that Rule 23’s 

equitable treatment requirement does not prohibit—indeed, it may be furthered—by 

appropriate incentive awards to class representatives. Because Rule 23 does not 

prohibit these awards categorically and because the Settlement Agreement does not 

guarantee any particular amount of such an award here, the Court finds the 

Settlement Agreement treats class members equitably relative to each other. (The 

Court acknowledges that the quantum of such awards may matter. And if the 

Settlement Agreement had specified an amount, that could have changed the 

analysis. As matters stand, though, the Court considers only the relevance of the 

incentive award’s inclusion in the Settlement Agreement to settlement approval as a 

whole, not any appropriate amount the Court may award in its discretion if faced 

with a settlement it is inclined to approve.)

5. Cy Pres Award

Finally, the Court considers an aspect of the Settlement Agreement that does 

not fit neatly within any of the factors under Rule 23(e)(2), but that the Court 

nonetheless concludes is fatal to the request for approval. Specifically, the Settlement 

Agreement provides that, after a second distribution to the class claimants, or, if a 

second distribution is not economically feasible, after a single distribution, the rest of 

the settlement fund will be awarded to the Public Interest Research Group (PIRG), a 

nonprofit that purportedly “has as its purpose the advancement of consumer 

protections and rights.” (Doc. 143-2, #4109). PIRG is not a party and is not a class 

member. It has not, so far as the Court knows, purchased any Macy’s sheets. So it is

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not receiving part of the common fund because of any injury it sustained at Macy’s

hands. Rather, PIRG will receive a portion of the class fund under what is termed the

cy pres doctrine. 

Cy pres—“as near as possible”—developed in the charitable trust context. In 

re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679, 682 (8th Cir. 2002). It arose 

out of the need to distribute the assets of a trust in accordance with the trust’s 

purpose when no beneficiaries had claimed the assets and they would otherwise lie 

dormant. Id. As applied to class actions, the doctrine provides a mechanism for 

parties to distribute proceeds of a common fund that, because of administrative 

difficulties, cannot be distributed to the class. See id.

The validity and scope of cy pres awards in class actions is a subject of debate. 

Some jurists decry cy pres awards as a form of civil fine, extracting more from a 

defendant than a lawsuit could justify under a compensatory framework. See Klier v. 

Elf Atochem N. Am., Inc., 658 F.3d 468, 481–82 (5th Cir. 2011) (Jones, C.J., 

concurring). Others view the doctrine as a useful tool to indirectly benefit the class. 

In re Google Inc. Street View Elec. Commc’ns Litig., 21 F.4th 1102, 1116 (9th Cir. 

2021). Two amici filed briefs with the Court to discuss the award here, one arguing 

that the cy pres award is unlawful, the other seeking its approval in the settlement. 

(Doc. 158; Doc. 165).

Before delving into that debate, the Court pauses to note yet another 

governing-law issue. When a class-action alleges state law claims and a federal 

court’s jurisdiction is diversity based, whether cy pres awards are substantively 

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authorized (a state law question) is distinct from whether a cy pres award is 

procedurally fair (a federal law question). A state’s substantive law may affect the 

availability of a cy pres distribution in certain cases. See, e.g., All Pls. v. All Defs., 645 

F.3d 329, 331–37 (requiring the district court to apply Texas Unclaimed Property Act, 

under which abandoned property escheats to the State, to unclaimed settlement fund 

proceeds, thereby precluding cy pres distribution). But even where governing 

substantive law authorizes cy pres awards, a federal court may not approve a 

settlement providing for such an award unless that settlement is fair under Rule 23.

The Court begins with the first question—substantive authorization. In this 

case, the proposed Settlement Agreement24 contractually provides for (assuming 

certain preconditions are met) a cy pres award to PIRG. (Doc. 143-2, #4109). Because 

the agreement provides that the cy pres recipient will receive the remaining funds as 

a matter of contractual right, the Court’s authority to unilaterally order a cy pres

distribution as a matter of Ohio common law is not at issue. Rather, the proper 

inquiry is whether such Ohio law permits and enforces such contracts. So far as the 

Court can tell, no Ohio cases address the issue of cy pres awards in class action 

settlement agreements. However, Ohio (like many other states) generally permits 

and enforces contracts creating third-party beneficiaries, see Hill v. Sonitrol of Sw. 

Ohio, Inc., 521 N.E.2d 780, 784 (Ohio 1988), a similar structure to the contract here. 

And because courts do not normally scrutinize the adequacy of a contract’s 

consideration, see Sowry v. Todd, 213 N.E.3d 212, 221 (Ohio Ct. App. 2023), the 

24 As stated previously, the Settlement Agreement is governed by Ohio law.

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Court’s only job at this juncture is to discern whether the Settlement Agreement is a 

valid contract. No party disputes that it is, which is sufficient for the Court to find 

that Ohio law substantively authorizes the Court to approve the cy pres award.

The second question—whether the proposed cy pres component renders the 

Settlement Agreement procedurally unfair for Rule 23 purposes—is harder. The 

Sixth Circuit has not considered whether cy pres awards are fair or equitable under 

Rule 23.25 That said, every circuit to squarely consider the issue has found that Rule 

23 does not preclude them altogether. See In re Lupron Mktg. & Sales Pracs. Litig., 

677 F.3d 21, 38 (1st Cir. 2012); Hyland v. Navient Corp., 48 F.4th 110, 121–22 (2d 

Cir. 2022); In re Baby Prods. Antitrust Litig., 708 F.3d 163, 172 (3d Cir. 2013); Hughes 

v. Kore of Ind. Enter., Inc., 731 F.3d 672, 675 (7th Cir. 2013); In re BankAmerica Corp. 

Sec. Litig., 775 F.3d 1060, 1064 (8th Cir. 2015); In re Google Inc. Street View, 21 F.4th 

at 1120 (9th Cir.); Poertner v. Gillette Co., 618 F. App’x 624, 629 (11th Cir. 2015).

Consistent with that, no party has identified, and the Court has not found, any circuit 

that has found them categorically impermissible. In fact, based on this apparent 

consensus, the American Law Institute has compiled generally applicable principles 

of law related to cy pres awards in class action settlements. See Principles of the Law 

of Aggregate Litigation § 3.07 (2010) (stating that “[a] court may approve a settlement 

that proposes a cy pres remedy even if such a remedy could not be ordered in a 

25 Gascho v. Glob. Fitness Holdings, LLC, 822 F.3d 269 (6th Cir. 2016) considered whether 

an attorney’s fee award should be based off the entire common fund (including the cy pres

award) or only the portion of the fund distributed directly to class members. The Gascho 

Court did not have the occasion to consider the cy pres award’s permissibility.

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contested case”). For present purposes then, the Court is persuaded by the consensus 

of authority that cy pres awards can, under certain circumstances, be “fair” under 

Rule 23.

But that leads to the key question here. If a cy pres award can be fair under 

certain circumstances, what are those circumstances? The Eighth Circuit provides 

helpful limiting principles, rooted in the origins of the cy pres doctrine. First, in Jones 

v. Monsanto Co., 38 F.4th 693 (8th Cir. 2022), and BankAmerica, 775 F.3d at 1064,

that court concluded that cy pres awards are proper only when “existing classmember claimants have been fully compensated and further distribution to 

remaining class members is not feasible.” Jones, 38 F.4th at 698–99 (citing 

BankAmerica, 775 F.3d at 1064). To be clear, fully compensated does not necessarily 

mean the class is afforded the entire relief sought in the complaint. Id. Rather, the 

Court must make its own assessment of the damages “that would be recoverable” by 

class members. Id. But, thus understood, the requirement for full compensation, flows 

from the logic of cy pres distributions. As implied by the name itself, cy pres awards 

are never a first resort. Cy pres awards exist to provide relief “as near as possible” to 

the relief that should actually occur—relief to class members. And this Court agrees 

that requiring the settlement to fully compensate the identified class members before 

making second-best distributions is reasonable. Moreover, in reaching that 

conclusion, the Court adds one gloss to the aspect of Jones and BankAmerica

requiring the Court to assess the damages that would be recoverable by class 

members. In particular, the Court concludes that this means a district court should

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calculate the strength of the plaintiffs’ claims. A plaintiff with no or little evidence of 

injury could not likely recover in an individual trial. Likelihood of success on the 

merits is thus relevant to recoverability.

Separately, the Eighth Circuit adds a second limiting principle—one focused

on the nature of the cy pres recipient. In BankAmerica, the Eighth Circuit held that 

cy pres distributions must be “for the next best use for indirect class benefit.” 775 

F.3d at 1067 (cleaned up). Accordingly, the use to which the funds are put must be 

“consistent with the nature of the underlying action and with the judicial function.” 

Id. (citation omitted). To ensure that this will be the case, the recipient must be one 

that “relates directly to the injury alleged in [the] lawsuit and settled by the parties.” 

Id. (cleaned up). Perfunctory allegations that such recipients are hard to identify or 

not “immediately apparent” do not absolve a court (or, in a settlement case, the 

parties) of their duty to find a qualified recipient. Id. Rather, a “thorough 

investigation” is often required. Id. Nor is the Eighth Circuit alone in imposing a 

next-best requirement. Dennis v. Kellogg Co., 697 F.3d 858, 866–67 (9th Cir. 2012) 

(reversing cy pres award for food pantry in deceptive advertising suit over cereal 

packaging); In re Google Inc. St. View Elec. Commc’ns Litig., 21 F.4th at 1116 

(upholding cy pres distribution but noting that “the factors that guide judicial 

oversight of cy pres settlement provisions—whether the distributions account for the 

nature of the plaintiffs’ lawsuit, the objectives of the underlying statutes, and the 

interests of the silent class members—are designed to ensure that cy pres payments 

particularly benefit the plaintiff class”) (cleaned up); Masters v. Wilhelmina Model 

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Agency, Inc., 473 F.3d 423, 436 (2d Cir. 2007) (noting that “the purpose of Cy Pres 

distribution is to put the unclaimed fund to its next best compensation use, e.g., for 

the aggregate, indirect, prospective benefit of the class”) (cleaned up).

The Court finds that, here, the first threshold—whether the parties properly 

resorted to cy pres—is met. As detailed previously, the Settlement Agreement fully 

compensates Category 1 and 2 claimants. The Court also finds that Category 3 

claimants are fully compensated for the purposes of the Jones test. While Category 3 

claimants will only receive $2.50, which would fall short of a full recovery for a fullyproven claim, the claimants in that category would likely not succeed at trial because 

they would struggle to prove they actually bought sheets. Taking that into account, 

the Court finds that the existing class members in all three categories will be fully 

compensated for Jones purposes. Beyond that, further distributions to absent class 

members are also infeasible. Because the class action involves claims by anonymous 

retail customers, the class members are not ascertainable unless they submit a claim. 

And because the claims administrator cannot distribute to non-ascertainable class 

members, the parties properly resorted to cy pres as a secondary means of indirect 

class recovery.

But the next threshold—the choice of a permissible cy pres recipient—is where 

the parties go astray. As noted, the parties elected to direct any remaining funds to 

PIRG. As far as the Court can tell, though, PIRG does no work addressing false or 

misleading labeling for bed sheets, textiles more generally, or even false advertising 

as a category. As the Hamilton Lincoln Law Institute (one of the amici here) pointed 

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out in its brief (and as the Court independently confirmed through PIRG’s website), 

PIRG’s work appears to primarily focus on company or government policy related to 

toxins, waste, or climate change. (Supp. Brief of HLLI, Doc. 166, #4665). Delving into 

PIRG’s “Consumer Protection” page (which is only one of many subpages under “Our 

work,” including “Global warming”, “Energy”, “Health”, and “Democracy & 

government”) reveals that most of PIRG’s consumer-related campaigns relate to 

product safety, food safety, and unfair loan practices. See https://perma.cc/984ZWJC8. True, the bed sheets here may have had a rougher texture than the customers 

had been led to believe, but uncomfortable and unsafe are two different categories, 

and no one contends the sheets raised safety issues.

Perhaps even more troubling to the Court in its assessment of PIRG as a 

potential cy pres recipient, HLLI points out that PIRG uses portions of its funds to 

donate to other organizations—organizations whose missions are even a further cry 

from any issues this suit presents. In 2016, PIRG granted $40,000 to the People’s 

Action Institute,26 an organization that advocates for socialized medicine, pursues 

“climate justice,” and fights against “the growing threat of authoritarianism in rural 

communities.” (Doc. 166, #4667 (quotes from People’s Action Institute website)). 

PIRG also donated over a million dollars to Environment America, an organization 

that seeks to ban plastic. (Id.). Last, but not least, PIRG donated $60,000 to “Onward 

Together,” a PAC that supports progressive candidates in their runs for offices across 

the country. (Id.); https://perma.cc/QH5K-8BCB.

26 HLLI accessed PIRG’s public tax filings via a public record request.

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Whatever one may think of the merits of such endeavors, it is hard to see how 

they have much to do with bed sheets, thread count mislabeling, or even consumer 

fraud more generally. In sum, the Court can discern no way in which a potential 

multi-million-dollar award to PIRG is the “next best use” for a class fund created to 

settle consumer fraud claims stemming from inaccurate bed sheet thread counts.

BankAmerica, 775 F.3d at 1067. PIRG does not relate “directly to the injury” suffered 

by the class members and it would be an inappropriate exercise of the “judicial 

function” to divert class money to an unrelated organization that has nothing to do 

with the class or the injury its members suffered. Id. (cleaned up).

Compounding the problem, the parties have made little effort to defend their 

selection of PIRG. The Plaintiffs’ motion for preliminary approval, for example,

provided nothing beyond a vague, unsupported statement that PIRG “has as its 

purpose the advancement of consumer protections and rights.” (Doc. 143-2, #4109). 

While such bland assurances may have sufficed for preliminary approval, more is 

needed now. But the motion for final approval fails to provide it, merely asserting 

that PIRG’s Consumer Watchdog team “make[s] sure consumers are informed and 

empowered to protect themselves in today’s rapidly changing marketplace,” a 

sentence gleaned from PIRG’s “Consumer protection” page on its website—a page, as 

the Court noted above, that is focused on product safety, not product mislabeling. 

(Doc. 153-1, #4461). Then, when the Court asked at the fairness hearing the basis for 

the parties’ belief that PIRG is a consumer protection organization, Macy’s counsel 

responded, “Macy’s interprets it as a consumer protection organization.” (Case No. 

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2:20-cv-81, Fairness Hrg. Trans., Doc. 45, #635). That’s not enough. Asking the Court 

to rely on a snippet from PIRG’s website coupled with the parties’ subjective 

interpretations of PIRG’s goals misunderstands the Court’s role in class action 

settlement approval.

That said, because the Court was concerned that such questions may have 

caught the parties off-guard, the Court also offered them an opportunity to supply 

additional information supporting the choice. Specifically, the Court ordered 

supplemental briefing on whether “the proposed cy pres recipient meets the 

standards for such recipients as described in, for example, In re BankAmerica Corp. 

Securities Litig., 775 F.3d 1060 (8th Cir. 2015).” Again, though, the parties came up 

short. The upshot of their argument? PIRG has represented that they will use any 

award “to promote accurate and truthful labeling and advertising of consumer 

bedding products ... [to] educate consumers with a focus on truth in labeling ... [to] 

serve as a marketplace watchdog ... [and to] research and monitor the marketplace.” 

(Doc. 168, #4686). They then attach a declaration from the Director of the Consumer 

Watchdog team for PIRG stating that PIRG will use the funds in the ways mentioned. 

(Doc. 168-2).

There are two problems with this argument. First, the promise is vague at best. 

How will the Court ensure that PIRG is using these funds to “promote[] accurate and 

truthful labeling” or “serve[] as a marketplace watchdog”? And even if the Court 

could, what recourse would there be if PIRG used the funds for other purposes? 

Second, the parties’ efforts to show that these funds will be used only for identified 

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purposes ignores a fundamental economic principle: money is fungible. Any funds 

that go to PIRG as an entity (as opposed to being directed to some trust or segregated 

fund) necessarily free up dollars for PIRG generally. Accordingly, a cy pres award to 

PIRG funds all of PIRG’s work, the vast majority of which is in no way relevant to 

the class issues here. (Indeed, as noted above, beyond its representations about what 

it will do with these moneys, the Court can find no evidence that PIRG has ever 

engaged in any work related to the issues here.) 

Shifting gears, Plaintiffs argue for a less restrictive understanding of cy pres 

recipients. According to Plaintiffs, “while use of funds for purposes closely related to 

their origin is still the best cy pres application, the doctrine of cy pres and courts’ 

broad equitable powers now permit use of funds for other public interest purposes by 

educational, charitable and other public service organizations.” (Doc. 153-1, #4460

(quoting Rosser v. A & S Cont.’g, Inc., No. 2:15-cv-711, 2017 WL 666121, *2 (S.D. Ohio 

Feb. 17, 2017) (cleaned up)) (emphasis added)). Plaintiffs then cite several district 

court decisions to bolster their claim. These decisions are unpersuasive, though, 

particularly because almost none of them include much, if any, discussion regarding 

the propriety of the cy pres award at issue in the given case, or much, if any, 

discussion of the appropriate limitations on the selection of cy pres recipients 

generally.27

27 See Rosser v. A & S Cont.’g, Inc., No. 2:15-cv-00711, 2017 WL 666121 (S.D. Ohio Feb. 17, 

2017); Shanahan v. KeyBank, No. 1:19-cv-2477, 2021 WL 1034403 (N.D. Ohio Mar. 16, 2021); 

Swigart v. Fifth Third Bank, No. 1:11-cv-88, 2014 WL 3447947 (S.D. Ohio July 11, 2014); 

Kritzer v. Safelite Sols., LLC, No. 2:10-cv-0729, 2012 WL 1945144 (S.D. Ohio May 30, 2012).

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Beyond that, as noted above, the Court’s own survey of the case law suggests 

the standard is more demanding. The courts of appeals that have addressed the issue 

in any depth have consistently (or at minimum, frequently) required some sort of 

identifiable relationship between the class injury and the cy pres recipient. See, e.g.,

BankAmerica, 775 F.3d at 1067 (reversing cy pres award for legal services 

organization in shareholder suit); Dennis, 697 F.3d at 866–67 (reversing cy pres

award for food pantry in deceptive advertising suit over cereal packaging); In re 

Airline Ticket Comm’n, 268 F.3d 619, 625–26 (8th Cir. 2001) (reversing cy pres award 

for Minnesota law schools and charities in airline antitrust suit). True, the Sixth 

Circuit has yet to weigh in. But the discussion in such cases, coupled with the 

historical development of the cy pres doctrine, convinces the Court that this limitation 

is appropriate. 

In sum, contrary to the parties’ argument, the cy pres doctrine does not provide 

the Court with freewheeling authority to dole out class funds to unrelated parties, 

merely because they happen to be charitable organizations. Article III courts resolve 

cases and controversies; they are not a legislature that appropriates funds in pursuit 

of the public good. Consistent with that, the Court’s role is to adjudicate the legal 

rights of the parties before it. In the class setting, that means the Court has an 

obligation to ensure that settlement proceeds benefit the class. The cy pres doctrine 

simply allows for a distribution that achieves those benefits indirectly. The question, 

then, is not what may be a good use of funds, or even the best use of funds, in some 

generic sense. Rather the sole question is the next best use from the class’s 

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perspective as measured against a direct distribution to absent class members. To 

clear that threshold, the cy pres award must at least benefit the class indirectly by 

either (1) remedying the underlying harm, or (2) reducing similar harms in the 

future. The thrust of PIRG’s work—which runs the gamut from climate change to 

product safety, but does not seem to have a meaningful consumer education or 

mislabeling component—is far too attenuated or remote from the interests 

underlying this suit. Compare PIRG’s work with, for example, the National 

Advertising Division of the Better Business Bureau. The latter exists entirely to 

address false advertising, which it does by conducting its own investigations into 

advertising campaigns and referring certain practices to the FTC. See

https://perma.cc/5WAK-BZ8D. While not a perfect fit, programs such as that one 

seem, at least at first glance, far more narrowly tailored to the class’s interests here. 

The bottom line is that the cy pres award included in the Settlement 

Agreement diverts class funds to an unrelated third party, whose use of the funds 

will not benefit the class’s interests here, directly or indirectly. Thus, the Court 

concludes it must reject the settlement. Moreover, as the Settlement Agreement 

provides that any requested fee award, incentive payment, or litigation expense will 

come only from the (as yet non-existent) common fund, the Court finds that the 

motion for approval as to those items (Doc. 147; Case No. 2:20-cv-81, Doc. 26) is 

MOOT.

That said, as the above should make clear, the Court’s concerns about the 

Proposed Settlement Agreement are limited to this single issue. The parties are free 

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to modify the Settlement Agreement to identify a new cy pres recipient, one that bears 

a closer relationship to the types of consumer protection issues that this case raises, 

or in other words, an organization that verifiably engages in meaningful work related 

to deceptive advertising. Alternatively, if the parties wish to seek an appeal of this 

Opinion and Order, they should move for certification under 28 U.S.C. § 1292(b).

One final issue bears mention. If the parties pursue the former course, the new 

settlement agreement will mean that new notice to the class is also necessary. On 

that front, the Court offers one additional observation: class action settlement notices 

must comply with the Due Process Clause. Gooch v. Life Investors Ins. Co. of Am., 672 

F.3d 402, 422 (6th Cir. 2012). To do so, the notice must (1) be “reasonably calculated 

to reach interested parties,” and (2) “fairly apprise prospective members of the class 

of the terms of the proposed settlement so that class members may come to their own 

conclusions about whether the settlement serves their interests.” Id. (cleaned up).

Upon further reflection, the Court has concerns that the notice here may not

have “fairly apprised” the class of one of the terms of the settlement. Specifically, the 

settlement notice postcard distributed to potential class members included no 

mention of the cy pres award. In fact, the notice suggests that the settlement fund 

will go only towards attorneys’ fees and costs, incentive payments, administrative 

costs, and distributions to the class itself. But, under the terms of the settlement, a 

potentially large amount of the settlement fund will go to a third party—the cy pres 

recipient. As such, the cy pres provision is a material term of the proposed settlement 

and should therefore be included in any future notice so that class members can raise 

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objections to that distribution if they wish. In re Katrina Canal Breaches Litig., 628 

F.3d 185, 198 (5th Cir. 2010). 

CONCLUSION

For the above reasons, the Court CERTIFIES the nationwide class—as

defined in the currently-rejected Settlement Agreement at Doc. 143-2, #4104—as to 

the asserted common law and UCC claims and APPOINTS the attorneys listed as 

class counsel. The Court, however, DENIES the motions for final approval (Docs. 

153, 155; Case No. 2:20-cv-81, Doc. 32, Doc. 34) of the proposed class action settlement 

and REJECTS the proposed settlement as currently structured. And because the 

Court rejects the settlement, the Court also DENIES the motions for attorneys’ fees, 

incentive awards, and expenses (Doc. 147; Case No. 2:20-cv-81, Doc. 26) as MOOT. 

SO ORDERED. 

December 20, 2023

DATE DOUGLAS R. COLE

 UNITED STATES DISTRICT JUDGE

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