A District Court granted final approval to a settlement reached between the parties holding that the settlement was fair and reasonable, and that because the settlement did not involve coupons, CAFA did not apply.
The plaintiff brought an action under the California’s Song-Beverly Credit Card Act alleging that the defendant requested and recorded personal identification information when shoppers used a credit card for purchases at Louis Vuitton retail stores. After the parties settled their disputes, the District Court granted final approval to the Settlement Agreement under which class members were entitled to Merchandise Certificates amounting to $1 million, which divided by the number of class members provided each class member with a $41.00 Merchandise Certificate.
For the purposes of settlement, the District Court certified a class comprising of all persons who made a credit card purchase at a Louis Vuitton store in California and who were upon request provided personal identification information, excluding transactions where such personal identification information was collected for shipping, delivery, servicing or repairing of the purchased merchandise or for special orders or paid holds.
While determining whether the settlement was fair and reasonable, the District Court noted various factors that favored granting final approval. The plaintiff asserted that the uncertainty surrounding the voluntariness of consumers was an affirmative defense which created risk for both parties, and the complexity of the issues would involve risky litigation if not resolved. The District Court agreed, observing that the risk of litigation and the extensive investigation, discovery, and subsequent settlement discussions conducted by the parties all favored granting final approval.
The District Court also noted that the plaintiff’s attorneys were well qualified to conduct this litigation and to assess its settlement value, and that the class had been fairly and adequately represented during settlement negotiations. Additionally, the District Court remarked that there were no objections, only seven requests to be excluded, and the settlement process was devoid of any collusion.
Next, the District Court analyzed whether CAFA applied to the settlement, and observed that it was not a coupon settlement. Here, the Merchandise Certificates could be redeemed on all purchases at stand-alone Louis Vuitton retail stores in California, could not be combined, were fully transferable with one-year expiration on use, and could not be redeemed at leased store locations within department stores.
Because a class member could use the Merchandise Certificate to acquire free merchandise, and did not need to spend any additional money to realize the benefit of the settlement, the District Court opined that the Merchandise Certificates were vouchers and not coupons, and thus, CAFA did not apply. Moreover, the Court held that, even if CAFA applied, the Court had satisfied CAFA’s requirement that a hearing be held and the Court’s findings be in writing.
Accordingly, the District Court granted final approval to the settlement.
Finally, the District Court also granted the parties request for an award of $375,000.00 in attorney’s fees and costs, and a $5,000.00 incentive award to the named plaintiff.