As promised in our New Year’s Resolutions, the Editors of CAFA Law Blog decided to launch the CAFA Law Blog “Guest Commentator Series,” in which guest commentators submit posts or articles on issues of interest to those who practice in the class action area. The following is a guest commentary prepared by Victoria Pavlick of JP Morgan Chase Bank’s Bankruptcy and Settlement Services group on the topic of notice under the Class Action Fairness Act of 2005.
Oh, yeah — since all of the Editors of the CAFA Law Blog are lawyers, it’s time for the disclaimer, which applies to all guest commentaries, in pure legalese (which is also listed below in our “Disclaimers” section below) — “The views and opinions expressed herein are exclusively the personal views of the authors only, unless otherwise attributed. Information and comments provided through CAFA Law Blog do not necessarily represent the views of McGlinchey Stafford, its attorneys or clients, or of the CAFA Law Blog Editors, and should not be attributed to them. The posting of an item on CAFA Law Blog does not mean that McGlinchey Stafford, its attorneys or clients, or CAFA Law Blog Editors approve or disapprove of the selection or contents of that item.” Et cetera, et cetera. Now for the post:
Notice Requirements under the Class Action Fairness Act
On February 18, 2005, the Class Action Fairness Act (the “Act”) was signed into law.
While the main purpose of the Act was to reduce forum shopping and to make national class actions filed in state court removable to federal court, the Act also imposed new notice requirements, as well as limitations on coupon settlements and attorneys’ fees. The following is a summary of the notification requirements of class settlements under the Act.
The Act has significantly altered the process by which class action settlements have been approved by the court. The Act imposes on defendants the duty of serving the proposed settlement documents (i.e., copy of the settlement and any contemporaneous agreements, the complaint, notice of scheduled hearings, and any proposed or final orders or judgments) on appropriate state and federal officials, including the U.S. Attorney General; state attorneys general for each state in which class members reside; and licensing or regulatory bodies, within 10 days of filing a proposed settlement with the court. The court, thereafter, must wait at least 90 days after the last governmental official is notified before issuing a final approval of a proposed settlement. If notice is not provided properly, then a class member may refuse to be bound by the settlement agreement.
As set forth above, the Act imposes new notice requirements upon defendants — the non-compliance of which may result in class members deciding not to proceed in the class action setting. Notifying the appropriate federal and state officials and submitting to them the necessary settlement documents within the filing deadline may prove challenging for defendants. Accordingly, selecting an experienced class action administrator to assist defendants in fulfilling the Act’s regulatory requirements to avoid the Act’s remedy in the event of non-compliance is of critical importance. While counsel for the proposed class members have previously taken the lead in selecting the class action administrator, with the new requirements under the Act placing the above notification procedures upon the defendants, assisting in the selection of the administrator by the defendants will enable defendants to seek an experienced administrator who can fulfill the Act’s notification requirements.
JP Morgan Chase’s Bankruptcy and Settlement Services group provides defendants with the experience necessary to meet the Act’s new notice requirements. Our professionals bring a wealth of class action experience and our ability to partner with you will ensure that the class action administration process is handled efficiently and accurately. To learn more above JP Morgan Chase’s Bankruptcy and Settlement Services, please contact:
JP Morgan Chase Bank
6525 West Campus Oval, Suite 200
New Albany, Ohio 43054
JP Morgan Chase Bank
4 New York Plaza, 17th Floor
New York, New York 10004
Or visit JP Morgan Chase Bank online at www.jpmorgan.com/visit/classaction_online today!
This article was prepared by Victoria Pavlick who works within JP Morgan Chase Bank’s Bankruptcy and Settlement Services Group. This article does not provide legal advice.
Editor’s Note: We appreciate the efforts of JP Morgan Chase Bank’s Bankruptcy and Settlement Services Group in providing this post, and solicit readers’ comments on the subject matter. Let JPM or us hear from you.