October 24, 2016 Articles

Combating Objectionable Objections

Rule 23 rules committee takes aim at frivolous objections to class settlements

by Jonathan Uslaner and Brandon Marsh

Courts and class action practitioners have struggled for years with the role of objectors to class action settlements. Under Rule 23, class members have the right to file with the district court an objection to a proposed settlement that they believe is “not fair, reasonable, or adequate.” If the settlement is approved over a class member’s objection, the objector has the right to appeal that approval. Allowing class members to file objections and to appeal approved settlements promotes fairer and more adequate recoveries for the class—at least in theory.

Unfortunately, there are certain objectors—colloquially referred to by courts as “professional objectors”—who file objections, or threaten to file objections, to class action settlements without the aim of improving the settlement at all. Rather, these objectors aim for something far different: to achieve a cash payoff from the litigants in exchange for dropping the frivolous objections or threat of appeal. These professional objectors, many of whom turn out not to be class members once proof of class membership is required, know that litigating the objections can impose substantial costs on the parties and their counsel and lead to years of delay, even if the objections are unreasonable or meritless.

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