If You Are Crossing Boardwalk and Park Place on Your Way to Go in Your CAFA Monopoly Game/Case, Then You Need to Pay Attention to This Practice Pointer Before You Complete the Settlement. Otherwise, You May Not Collect Your $200.

IUE-CWA v. General Motors Corp., ___ F.R.D. ___, 2006 WL 3147739 (E.D. Mich. 2006.).

Practice Pointer – This one makes an important CAFA point! The new 28 U.S.C. § 1715(b) states that you have to give notice to the appropriate state and federal officials of proposed class settlements. If you don’t, then class members may refuse to comply with and may choose not to be bound by a settlement agreement.

In this case, the United States District Judge Denise Page Hood writing for the Eastern District of Michigan handed down her Findings of Fact and Conclusions of Law. The Judge stated that GM had issued notice to the appropriate federal and state attorneys general pursuant to the Class Action Fairness Act of 2005, 28 U.S.C. § 1715(b) and none submitted an objection.

At this point you might me asking what in the world does that mean. Well, its an important new aspect of class action practice, so pay attention.

CAFA’s new 28 U.S.C.A. § 1715(b) provides that:

not later than 10 days after a proposed settlement of a class action is filed in court, each defendant that is participating in the proposed settlement must serve upon the appropriate state official of each state in which a class member resides and the appropriate federal official, a notice of the proposed settlement consisting of

(1) a copy of the complaint and any materials filed with the complaint and any amended complaints (except such materials will not be required to be served if such materials are made electronically available through the Internet and such service includes notice of how to electronically access such material);

(2) notice of any scheduled judicial hearing in the class action;

(3) any proposed or final notification to class members of the members’ rights to request exclusion from the class action or, if no right to request exclusion exists, a statement that no such right exists, and a proposed settlement of a class action;

(4) any proposed or final class action settlement;

(5) any settlement or other agreement contemporaneously made between class counsel and counsel for the defendants;

(6) any final judgment or notice of dismissal;

(7) if feasible, the names of class members who reside in each state and the estimated proportionate share of the claims of such members to the entire settlement to that state’s appropriate state official, or if the provision of information is not feasible, a reasonable estimate of the number of class members residing in each state and the estimated proportionate share of the claims of such members to the entire settlement; and

(8) any written judicial opinion relating to the materials provided.

Also, the new 28 U.S.C.A. § 1715(d) provides that an order giving final approval of a proposed settlement may not be issued earlier than 90 days after the later of the dates on which the appropriate federal official and the appropriate state official are served with the required notice.

Importantly, a class member may refuse to comply with and may choose not to be bound by a settlement agreement or consent decree in a class action if the class member demonstrates that the required notice has not been provided. A class member may not refuse to comply with or to be bound by a settlement agreement or consent decree if the required notice was directed to the appropriate federal official and to either the state attorney general or the person that has primary regulatory, supervisory, or licensing authority over the defendant. These rights apply only to class members or any person acting on a class member’s behalf, and will not be construed to limit any other rights affecting a class member’s participation in the settlement.