May 29, 2020 Articles

Continuing Jurisdiction: A Federal Court’s Power to Enforce a Nationwide Class Action Settlement

Tips to ensure that your nationwide class action settlement is not undermined after final approval is granted.

By Theodore W. Seitz and Kyle M. Asher

Coming to terms on a nationwide class action settlement in federal court is not easy. First, unlike typical settlement agreements, a class settlement requires a multifaceted agreement, with provisions covering a wide array of issues—the scope of the class, the settlement fund, notice and claims provisions, safe harbor, release, and the list goes on and on. Second, it is axiomatic that any class settlement must be free of collusion—the result of extensive arm’s-length negotiations conducted by experienced counsel. Thereafter, the federal rules mandate a judge’s preliminary approval, a fairness hearing, and the judge’s final approval after hearing from and addressing concerns raised by any settlement objectors. Under the Class Action Fairness Act, 28 U.S.C. § 1715, notice of the proposed class settlement must also be provided to the U.S. Department of Justice, state attorneys general, and in some instances, state and federal regulators at least 90 days before the final approval hearing. In other words, the nationwide class action settlement must navigate through many checkpoints before crossing the ultimate finish line. Although most of these steps are well known, less attention has been paid to how to protect that hard-won settlement from challenges—especially in the context of a federal court’s continuing jurisdiction to enforce a nationwide class settlement.

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