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No Standing to Sue, No Class Action Settlement - U.S. Supreme Court Remands Cy Pres Settlement Case Without Reaching the Merits

We have been following the Frank v. Gaos, 586 U. S. __ (2019) class action case, which presented an opportunity for the U.S. Supreme Court to determine the limits on the use of the cy pres doctrine in the context of class action settlements to distribute damages paid by a defendant company to entities other than the plaintiff class. On March 20, 2019, the U.S. Supreme Court halted Gaos in its tracks, vacating the Ninth Circuit’s decision approving the contested cy pres settlement and remanding the case for further proceedings to determine whether any named plaintiffs had ...

Standing in the Way of a Supreme Court Decision on Cy Pres-Only Class Action Settlements

What is the value of the class action mechanism if no redress is provided to plaintiffs at all? Is the class action about providing a remedy to plaintiffs, is it just about getting the defendant company to pay something to someone…or has it evolved simply into a mechanism for plaintiffs’ attorneys to collect fees? These are several of the questions raised by Frank v. Gaos, (No. 17-961), which presents the U.S. Supreme Court with an extreme case of the use of the cy pres doctrine in the context of class action cases. The High Court is faced with a cy pres-only settlement in which the ...

What About the Merits – What, If Anything, Will the Supreme Court Do With Cy Pres-Only Class Action Settlements?

We have been talking about Frank v. Gaos, (No. 17-961), since the U.S. Supreme Court decided to tackle the extreme case of the use of the cy pres doctrine in the context of class action cases. The settlement is a cy pres-only agreement which called for distribution of all funds paid by the defendant directly to charitable organizations and plaintiffs’ attorneys (in the form of attorneys’ fees) and there was no attempt at all to distribute any funds to the plaintiff class. The Supreme Court oral argument was held in Gaos on October 31st and the Justices probed several aspects of the heart ...

How Much is that Disclosure Worth? NC Business Court Curbs Attorney Fee Award in Shareholder Disclosure-Only Class Action

Class actions challenging corporate merger transactions often result in settlement agreements in which the only remedy obtained by the plaintiff class is the company defendants’ additional disclosure of information related to the merger. These “disclosure-only” settlements have proliferated in recent years, drawing criticism, in part, due to questions regarding the materiality of any additional disclosures that are obtained and the broad release of claims that the corporate defendants typically receive in exchange for the disclosures. The Delaware Chancery Court ...

Has Cy Pres Gone Too Far: U.S. Supreme Court to Consider When Class Action Plaintiffs Get Nothing, but Their Lawyers and Charities Cash-In Via Plaintiffs’ Settlement

There has been a lot of discussion surrounding class action litigation over the course of the last several years. The U.S. Supreme Court has tackled a variety of issues ranging from the use of class action waivers in arbitration agreements to whether class action plaintiffs can base claims solely on statutory damages when they have suffered no concrete injury themselves. The use of class waivers in arbitration agreements, in particular, has been front and center with the Consumer Financial Protection Bureau’s (CFPB) arbitration study declaring that class waivers were ...

As class action litigation has continued to proliferate, we have seen efforts to rein in the perceived abuses of the system on multiple fronts. Over a decade ago, Congress passed the Class Action Fairness Act of 2005 (CAFA) to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. In the last several years, the courts have been called on repeatedly to define the contours of CAFA and the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) initiated proposed amendments to Federal Rule of ...

Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. In recent years, we have seen more class actions challenging corporate merger transactions and settlements in which the only remedy obtained by the plaintiff class was the company defendants’ additional disclosure of information related to the transaction. In exchange for the additional disclosures, the corporate defendants typically would receive a broad-based release of ...

NC DISCLOSURE-ONLY CLASS ACTION SETTLEMENTS & ATTORNEYS' FEES MAY FACE INCREASED SCRUTINY (Feb. 2, 2017): Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. Read More

Federal class action jurisprudence has been evolving rapidly over the course of the last 5-6 years, with several major U.S. Supreme Court decisions defining and redefining many aspects of class litigation. With the first round of proposed amendments in over a decade, the civil rule governing federal class litigation is set to follow suit. On August 12, 2016, the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) published proposed amendments to Federal Rule of Civil Procedure 23, which have been in the works since the 2011 formation of the Rule 23 ...

MLB Litigation Brief: Class Action Questions Open After Scalia’s Death, Arbitration Fees and American Rule & More


Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the MVA ...

The North Carolina Court of Appeals considered for the first time whether it is legal in a class action settlement agreement for one party to agree to pay the other’s attorneys' fees and expenses. The court concluded that it is legal, subject to appropriate judicial review. But, the court’s ruling leaves local North Carolina counsel shut out of the roughly $1 million attorneys’ fee award granted to New York lead counsel. The appellate court’s opinion in Ehrenhaus v. Baker, Nos. 14-1201, 14-1083 (N.C. Ct. App. Sept. 15, 2015)(“Ehrenhaus II”) reads much like a primer on ...

The Four Factual Findings Necessary to Make an Award of Reasonable Attorneys’ Fees Stick in North Carolina

As a matter of course, a prevailing party cannot recover its attorneys’ fees from an opposing party in North Carolina.  But, attorneys’ fees can be awarded if there is specific statutory authority.  At the conclusion of litigation, the last thing the prevailing party wants to face is the reversal of its award for attorneys’ fees.  The plaintiff in Brown's Builders Supply, Inc. v. Johnson et al., No. COA14-836 (N.C. Ct. App. Mar. 17, 2015), a home renovation-related contract dispute, found itself in this unfortunate position because the trial court’s order granting ...

About MVA Litigation Blog

Companies are operating in an increasingly globalized and regulated business environment, facing ever-changing and complicated litigation and regulatory challenges. The Moore & Van Allen Litigation Blog provides cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. 

Read about our practice and meet the MVA Litigation Team.

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