Opinion ID: 6496264
Heading Depth: 2
Heading Rank: 1

Heading: Size of the Cy Pres

Text: St. John’s first objection is to the size of the cy pres distribution. St. John argues that the district court should have (1) required the parties to take additional steps to identify additional class members and (2) increased the pro rata portion of the Common Fund up to 100% of the weighted average retail price. The district court did not abuse its discretion in concluding that notice to the class was sufficient in light of the comprehensive notice plan and the estimated results from the claims administrator. This court has noted that “a claim rate as low as 3 percent is hardly unusual in consumer class actions and does not suggest unfairness.” Keil v. Lopez, 862 F.3d 685, 697 (8th Cir. 2017) (affirming the district court’s conclusion that a settlement was fair, reasonable, and adequate where the -5- potential class covered 3.5 million households, an estimated 87% of those received notice, and 105,173 claims were submitted against a settlement fund of $32 million). St. John points to cases in which the parties subpoenaed consumer data from retailers and were able to make direct payments to consumers based on those records, including to consumers who did not opt in to the class. The district court engaged the parties about that possibility during a hearing, asking, “So in light of the objector’s objection, have you done any additional investigation as to whether – whether additional notice is possible, the cost of additional notice, the reference that the objector makes to subpoenaing records from big-box retail locations, actions or steps of that sort?” Plaintiffs’ counsel responded that after conferring with the claims administrator, they concluded that the notice plan already in place was actually more effective than seeking subpoenas from retailers who have increasingly imperfect data. Especially with ongoing privacy concerns, retailers – major retailers are now getting rid of a lot of that data, they’re not holding on to it in the way that they used to. They, of course, aren’t tracking people who make purchases with cash and, of course, it would not include people who purchased from smaller retail outlets. So it was our conclusion that that would not have been a most effective form of updating notice and that the steps that we already took were, in fact, more effective. There is no further discussion in the record of the feasibility of St. John’s proposed approach. We do not doubt that there are circumstances in which pursuing records from retailers is a reasonable and effective way to get relief to class members, especially because it might allow for direct payments to affected consumers without a cumbersome claims process. Based on this record, however, the district court did not abuse its discretion by not requiring the parties to pursue this approach in addition to the notice plan that had already been implemented, which advertised the settlement in a targeted way across numerous platforms and was revised twice in an effort to reach more consumers. The second issue St. John raises is whether the class members who have been identified are entitled to a larger proportion of the price of the product, up to 100%, -6- before the residual funds are allocated cy pres. Relying on In re BankAmerica Corp. Securities Litigation, 775 F.3d 1060 (8th Cir. 2015), St. John argues that because class members’ damages are unliquidated, they should be able to recover up to the full purchase price before the district court may order cy pres distribution. Concerns about a windfall to class members, St. John asserts, are not relevant in the context of unliquidated damages. This argument overstates BankAmerica’s holding. In BankAmerica, we held that unclaimed funds may only be distributed cy pres where existing class-member claimants have been fully compensated and further distribution to remaining class members is not feasible. Id. at 1064. Where class members have claims for liquidated damages, they are fully compensated when those claims are “100 percent satisfied by the initial distribution.” Id. (quoting Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 475 (5th Cir. 2011)). When damages are unliquidated, class members are not necessarily “‘fully compensated’ by payment of the amounts allocated to their claims in the settlement.” Id. at 1065. If the settlement provides “only a percentage of the damages” sought by the plaintiffs and “the settling parties disagree as to both liability and damages, and do not agree on the average amount of damages per share that would be recoverable by any of the Classes,” then “the notion that class members were fully compensated by the settlement is speculative, at best.” Id. at 1066. Contrary to St. John’s assertion, however, this does not require that classmember claimants receive the full amount of unliquidated damages claimed in the complaint before cy pres distribution. Rather, it requires the district court to make its own assessment of the damages “that would be recoverable” by class members before approving distribution of the residual funds cy pres. The reversible error in BankAmerica was not that plaintiffs had not received the full change in stock value but that the district court had not determined the measure of class members’ damages and whether they had been fully compensated before granting a cy pres distribution. In this case, the district court conducted such an analysis, and we find no abuse of discretion in its conclusion that a payment to class members of 50% of the average weighted retail price for the items they purchased “fully compensated” the class -7- members and that they had no equitable claim to the remaining funds, which were appropriately distributed cy pres. The district court reasoned that even if class members claimed they would not have purchased Roundup if it had not borne the allegedly misleading label, their damages would still have to be reduced from 100% to account for the value they received from using Roundup. The conclusions of both parties’ experts also support this finding—Monsanto’s expert’s survey found a 2.5% differential and plaintiffs’ expert’s survey found a differential of 7.9% to 15.9%. We see no clear error of judgment in the district court’s conclusion.