February 25, 2016 Practice Points

MA District Court Discounts Ninth Circuit's Approach to Coupon Settlements

Just what is a “coupon” that would trigger CAFA’s stringent provisions?

by Ashley Trehan

The Class Action Fairness Act of 2005 (CAFA) made sweeping changes to federal class action law, particularly with respect to “coupon settlements.” But just what is a “coupon” that would trigger CAFA’s stringent provisions? The Honorable William G. Young of the United States District Court for the District of Massachusetts recently answered that question (and others), taking his cues from the Seventh Circuit and eschewing competing standards out of the Ninth Circuit. See Tyler v. Michaels Stores, Inc., No. 11-cv-10920, 2015 WL 8484421 (D. Mass. Dec. 9, 2015).

Background

In Tyler, consumers sued Michaels—a national craft-supply store—for unjust enrichment and violations of the Massachusetts Unfair Trade Practices Act. Tyler, 2015 WL 8484421 at *2. The challenged practice was the stores’ collection of customers’ zip codes and addresses during credit card transactions. Id.

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