Checklist · Litigation

Settling a Class Action: A Rule 23(e) Approval Checklist

Type
Checklist
Jurisdiction
National
Date
2024-10-20
Topic
Litigation

Settling a class action is not a private deal — it is a judicial proceeding in which the court acts as fiduciary for absent class members who never hired anyone. Rule 23(e) forbids the parties to dismiss or compromise the claims of a certified or putative class without court approval, and the 2018 amendments made that approval a demanding, evidence-backed exercise rather than a formality. This checklist walks the entire approval process in fourteen phases: structuring a settlement that can survive scrutiny, defining a settlement class that could actually be certified under Amchem, scoping the release to the identical factual predicate, designing relief and a claims process with an honest take rate, the preliminary approval motion and the "likely be able to approve and certify" showing, the four Rule 23(e)(2) factors, the best notice practicable, CAFA notice under 28 U.S.C. § 1715 and its 90-day waiting period, claims administration, attorney's fees and the clear-sailing and reversion red flags, service awards and the circuit split over their legality, cy pres and coupon scrutiny, objectors and the amended Rule 23(e)(5), and the final approval hearing and judgment. A running worked example — a consumer settlement with a clear-sailing clause and a serial objector — carries the analysis through every phase. Each phase pairs check items with a short explanation of why the item matters and the trap that catches practitioners who skip it. It closes with the mistakes that sink deals and a consolidated one-glance checklist.

Settling a Class Action: A Rule 23(e) Approval Checklist

Litigation > Class Actions | Published 20 October 2024 - Updated 5 February 2026 | UpLaw - uplaw.us

In an ordinary case, settlement ends the court's involvement. In a class action, settlement begins it. Rule 23(e) turns the judge into a fiduciary for thousands of people who never hired a lawyer, never signed a release, and will never read the docket — and it requires the judge to say, on the record, that the deal is fair to them.

Keywords: Rule 23(e), class settlement, preliminary approval, final approval, settlement class, Amchem, CAFA notice, class notice, claims administration, take rate, common fund, clear-sailing, reversion, service award, cy pres, coupon settlement, objectors

How to use this checklist

This is a working document for the lawyer — plaintiff-side or defense-side — who has a class settlement in hand and needs to get it approved. It tracks the sequence a real deal follows: negotiate, paper, move for preliminary approval, notice, administer, move for final approval and fees, survive objectors, and enter judgment.

Two structural facts drive everything below. First, the settling parties are, at the moment of settlement, no longer adverse. Both sides want the deal blessed. That is precisely why Rule 23(e) exists and why courts apply what the case law repeatedly calls "heightened scrutiny" to settlements negotiated before a class is certified. Second, the class is bound whether or not it participates. A class member who ignores the notice is released just as thoroughly as one who cashes a check.

Scope, and what this checklist does not cover. Rule 23 is a federal rule, and this checklist is written for a settlement in federal court. Most states have an analogue to Rule 23 — many are modeled on it — but state approval standards, notice practice, fee doctrine, and the treatment of service awards and cy pres genuinely diverge, and a few states depart from the federal model substantially. If you are settling in state court, use this document for the architecture and then confirm every deadline and standard against your own state's rule and case law. The same caution applies to anything time-sensitive below: circuit benchmarks, standing orders on post-distribution accounting, and the law of incentive awards are all moving. Verify current authority before relying on any rule stated here.

If you have not yet reached settlement, start with Class Action Litigation: A Comprehensive Guide to Rule 23 for the doctrinal architecture, and with Moving for Class Certification: A Practical Checklist or Opposing Class Certification: A Defense Checklist depending on which side of the "v." you sit on. The Class Action Toolkit maps the whole field.

Our running example. Ibarra v. Trellis Pay, Inc. is a consolidated consumer class action in the Northern District of California. Trellis Pay, a peer-to-peer payments app, allegedly sent unsolicited marketing texts to users who had opted out (a TCPA claim) and, separately, suffered a credential-stuffing incident exposing partial account data. After mediation, the parties reach an $18 million non-reversionary common fund covering roughly 4.1 million users, with a claims process, two years of credit monitoring, and injunctive commitments. Plaintiffs' counsel will seek 30% of the fund; Trellis has agreed not to oppose anything up to that number. A serial objector named Merrick Vance is already circling. We will follow this deal through every phase.

Phase 1 — Structure a settlement that can actually be approved

  • [ ] Confirm you have authority to settle on a classwide basis: named plaintiffs must consent, and class counsel must be able to certify that the deal was reached at arm's length.
  • [ ] Document the negotiation process contemporaneously — mediator identity, sessions, exchanges, whether a mediator's proposal was used. This becomes your Rule 23(e)(2)(B) proof.
  • [ ] Negotiate the class relief before the fees. Do not discuss fee numbers until the merits consideration is fixed; say so in a declaration.
  • [ ] Decide the fund architecture: common fund vs. claims-made, reversionary vs. non-reversionary, capped vs. uncapped.
  • [ ] Identify every side agreement now — Rule 23(e)(3) requires the parties to identify any agreement made in connection with the proposal, including opt-out "blow" provisions and walkaway rights.
  • [ ] Confirm the defendant's ability to pay and, if solvency is a concern, build in security or escrow.
  • [ ] Decide whether the settlement is being negotiated pre-certification (heightened scrutiny) or post-certification (somewhat lighter, but still real).

Why it matters, and the traps. A settlement that cannot be described in a single honest paragraph usually cannot be approved. The most common structural sin is the reversionary fund: unclaimed money goes back to the defendant. Courts treat reversion — especially when combined with a fee that is calculated off the gross fund — as evidence that class counsel traded class recovery for fee certainty. In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2011), catalogued the three classic warning signs: a disproportionate fee, a "clear sailing" clause, and a "kicker" or reverter returning unawarded fees to the defendant. Any one of them draws attention; all three together are close to fatal.

The second structural trap is the blow provision — a term letting the defendant walk if opt-outs exceed some threshold. These are permissible and common, but Rule 23(e)(3) requires you to identify the agreement, and many courts require the threshold itself to be disclosed to the court (often under seal) rather than hidden entirely. Concealing a blow provision is how otherwise good settlements get vacated.

In Trellis Pay, counsel made the fund non-reversionary from the first mediation session — every dollar not claimed is redistributed pro rata to claimants in a second distribution, with only a residual cy pres. That single choice removed the strongest objection the deal would otherwise have faced.

Phase 2 — Define the settlement class and confirm it could be certified (Amchem)

  • [ ] Draft a settlement class definition that is objectively ascertainable and tied to records the defendant actually has.
  • [ ] Run the full Rule 23(a) analysis: numerosity, commonality (Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011)), typicality, adequacy.
  • [ ] Run the Rule 23(b)(3) analysis: predominance and superiority — or identify the (b)(1) or (b)(2) basis if the relief is truly indivisible.
  • [ ] Confirm no intra-class conflict requiring subclasses with separate counsel (present vs. future claimants; different statutes with different damages; different states with different UDAP remedies).
  • [ ] Confirm every class member who will receive damages has Article III standing under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021).
  • [ ] Note in the motion that trial manageability under Rule 23(b)(3)(D) is not a consideration for a settlement class.

Why it matters, and the traps. Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), is the foundational rule: a settlement class must satisfy every Rule 23 requirement except manageability, and the requirements "designed to protect absentees" — adequacy and predominance above all — "demand undiluted, even heightened, attention in the settlement context." A fair-sounding settlement cannot cure a class that could never be certified. Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), made the same point about limited-fund settlements under Rule 23(b)(1)(B).

The trap is conflict blindness. In Amchem, currently injured asbestos claimants and exposure-only future claimants had structurally opposed interests in how a fixed pot was divided; a single class with a single counsel could not adequately represent both. Ask yourself: does any group inside my class definition want a different allocation than another group, and are they represented by anyone who is loyal only to them? If yes, you need subclasses with separate representatives — and probably separate counsel.

The second trap is a nationwide class over state-law claims. Predominance requires the court to confront material variations in state consumer-protection, warranty, and unjust-enrichment law. The Ninth Circuit sitting en banc in In re Hyundai and Kia Fuel Economy Litigation (9th Cir. 2019) held that a district court may approve a nationwide settlement class without a state-by-state choice-of-law march where no party has shown that variations actually matter — but the burden-shifting only works if you build the record. Do the choice-of-law work; do not assume it away. For the substantive state-law landscape, see Consumer Protection Law: A Comprehensive Guide to the FDCPA, FCRA, TCPA, and State UDAP Statutes.

Phase 3 — Scope the release

  • [ ] Draft the release to cover claims arising from the identical factual predicate as the claims pleaded — no broader.
  • [ ] Check the release against the operative complaint (see Drafting a Federal Civil Complaint: A Practical Checklist) — every released theory should trace to pleaded facts.
  • [ ] Decide explicitly whether to release future conduct (usually: do not) and personal injury claims (almost always: carve out).
  • [ ] Decide whether to include a general-release waiver (e.g., California Civil Code § 1542) — and whether the class was given anything extra for it.
  • [ ] Define released parties precisely (affiliates, vendors, retailers) and confirm each gave consideration or is genuinely derivative.
  • [ ] Confirm the release does not extinguish claims of persons outside the class definition.

Why it matters, and the traps. A class judgment can release only what the class action could have litigated. The governing principle — the identical factual predicate rule — permits a release of claims not pleaded, but only where they arise from the same underlying facts. A release drafted by the defendant's transactional team, sweeping in "any and all claims of any kind whatsoever," is an invitation to an objector and to reversal.

In Trellis Pay, the defendant's first draft released "all claims relating to the use of the Trellis application." That would have covered a user's unrelated dispute over a fraudulent transfer. The final release is limited to claims arising from (i) the transmission of marketing text messages during the class period and (ii) the security incident of March 2024 — and it expressly carves out personal-injury and identity-theft claims arising from future misuse of data outside the incident.

Phase 4 — Design the relief and the claims process (be honest about take rates)

  • [ ] Model the expected claims rate using comparable settlements, and state your assumption in the motion.
  • [ ] Choose between direct distribution (checks/ACH/digital payment to all identifiable class members, no claim form) and a claims-made process. Prefer direct distribution wherever records permit it.
  • [ ] If a claim form is required, make it short, mobile-friendly, and free of documentation demands that no ordinary consumer can meet.
  • [ ] Build a second distribution of residual funds to claimants before any cy pres.
  • [ ] Value the non-monetary relief honestly (credit monitoring at cost, not "retail value"); disclose the methodology.
  • [ ] Set a claims deadline that runs at least 60–90 days after notice completion.

Why it matters, and the traps. Nothing has damaged the credibility of class settlements more than the gap between a headline fund and the money that reaches class members. Claims rates in consumer settlements are frequently in the low single digits, and empirical studies of consumer class settlements — including work published by the Federal Trade Commission — have generally reported median claims rates in the single digits or low teens. (Treat any specific figure as illustrative rather than authoritative: rates vary enormously with notice method, payment mechanism, and per-claimant value, and you should benchmark against comparable settlements in your own district rather than a headline national number.) Courts have caught on, and Rule 23(e)(2)(C)(ii) now expressly directs the court to consider the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims.

The trap is the paper wall: a claim form requiring a receipt, a serial number, or a sworn statement about a purchase made four years ago. Every barrier reduces the take rate — and, if the fund reverts, every barrier is worth money to the defendant. Assume the court will ask, at final approval, "How much of this fund will actually reach a human being?" Have a number, and have a defensible basis for it.

Trellis Pay has the class list — these are app users with verified email addresses and phone numbers. So there is no claim form for the cash: every class member gets a digital payment or a check automatically, with a claim form only for those seeking documented out-of-pocket losses up to $2,500. Projected participation: near 100% for the base payment. That fact does more to earn approval than any adjective in the brief.

Phase 5 — The preliminary approval motion and the "likely be able to approve" standard

  • [ ] File a motion under Rule 23(e)(1) supported by the settlement agreement, the proposed notice plan, the proposed order, and declarations from class counsel, the mediator (if permitted), and the notice/claims administrator.
  • [ ] Provide the court with information sufficient to determine that it will likely be able to (i) approve the settlement under Rule 23(e)(2) and (ii) certify the class — this is the 2018 amendment, and it is the whole ballgame.
  • [ ] Address the Rule 23(e)(2) factors now, not for the first time at final approval.
  • [ ] Disclose all Rule 23(e)(3) side agreements.
  • [ ] State the maximum fee and service award that will be sought, so the notice can say so.
  • [ ] Propose the notice plan, the administrator, the claims deadline, the objection deadline, the opt-out deadline, and the final approval hearing date — with enough runway for the CAFA 90-day clock (Phase 8).
  • [ ] Ask the court to appoint class counsel under Rule 23(g) and the class representatives.

Why it matters, and the traps. The 2018 amendments deliberately abolished the old, lax practice of rubber-stamping "preliminary approval" and deferring all hard questions. Rule 23(e)(1)(B) now requires an affirmative front-end showing. In practice, a preliminary approval motion is a certification motion and a fairness motion combined, filed before you have spent the money on notice.

The trap is treating preliminary approval as a formality and filing a six-page motion. Courts now routinely deny preliminary approval outright — sometimes with a detailed list of defects — because the parties did not show certifiability, did not explain the claims process, or did not justify the fee structure. A denial is expensive: notice is delayed, the mediator's leverage is gone, and objectors have a published roadmap.

Phase 6 — The four Rule 23(e)(2) factors

  • [ ] (A) The class representatives and class counsel have adequately represented the class — document the investigation, the discovery taken, the motion practice survived.
  • [ ] (B) The proposal was negotiated at arm's length — mediator declaration; fees negotiated after relief; no side deals.
  • [ ] (C) The relief is adequate, taking into account: (i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of the distribution method; (iii) the terms of any proposed fee award, including timing of payment; and (iv) any Rule 23(e)(3) agreement.
  • [ ] (D) The proposal treats class members equitably relative to each other — explain and justify every allocation tier.
  • [ ] Layer in your circuit's traditional multi-factor test (the Second Circuit's Grinnell factors, the Ninth Circuit's Hanlon factors, the Third Circuit's Girsh factors) — the 2018 amendments supplement rather than displace them.
  • [ ] Quantify the risk discount: what is the realistic recovery at trial, what is the probability of certification surviving Rule 23(f) review, and what is the collectability?

Why it matters, and the traps. Factor (C)(i) is where the settlement is actually valued. Do the arithmetic in the brief: maximum statutory exposure, realistic damages model (post-Comcast Corp. v. Behrend, 569 U.S. 27 (2013), the damages model must match the theory of liability), probability of surviving summary judgment and Daubert, and the time value of a recovery four years away. See Moving for Summary Judgment Under Rule 56: A Practical Checklist and Challenging an Expert Under Daubert and Rule 702: A Practical Checklist for the risks you are pricing, and The Litigation Damages Toolkit: Valuing and Proving Money Awards for the valuation methodology.

Factor (D) is the sleeper. If your allocation gives text-message claimants $45 and data-incident claimants $12, say why — different statutory damages, different limitations exposure, different proof burdens. An unexplained tier is an equity problem, and equity problems suggest inadequate representation, which is an Amchem problem, which is a certification problem. The factors are a chain.

In Trellis Pay, class counsel's brief shows: statutory TCPA exposure of $500–$1,500 per text against roughly 900,000 recipients (nominally billions, but plainly uncollectible against a company with $60 million in cash), a live Facebook v. Duguid autodialer defense that could have zeroed the TCPA claim entirely, and a data-incident claim with a serious Article III standing problem after TransUnion. The $18 million represents roughly 22% of a realistically litigated recovery. That is a number a judge can work with.

Phase 7 — Class notice: the best notice practicable

  • [ ] For a Rule 23(b)(3) class, provide "the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort" — Rule 23(c)(2)(B).
  • [ ] Confirm the notice may be by United States mail, electronic means, or other appropriate means (Rule 23(c)(2)(B), as amended 2018) — email notice is now expressly authorized.
  • [ ] Include all seven Rule 23(c)(2)(B) content elements: the nature of the action; the class definition; the claims, issues, or defenses; the right to appear through counsel; the right to opt out and how; the binding effect of a class judgment; and the time and manner for opting out.
  • [ ] Draft the notice in plain, easily understood language — test it; do not let the defendant's counsel write it.
  • [ ] State the maximum fee and service award in the notice.
  • [ ] Build a supplemental media/digital plan for unreachable members; get a declaration from the administrator estimating reach (target: 70–85%).
  • [ ] Stand up a settlement website with the agreement, the motion, the fee application (before the objection deadline), and an online claim/opt-out portal.

Why it matters, and the traps. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950), sets the due-process floor: notice "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action." Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974), holds that individual notice to identifiable members is mandatory in (b)(3) cases and that the plaintiff bears the cost. Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), confirms that absent members must get notice, an opt-out right, and adequate representation before a court may bind them.

The recurring trap is a fee application filed after the objection deadline. Rule 23(h) requires notice of the fee motion "in a reasonable manner to all class members," and courts have vacated fee awards where class members had to object to a fee they had not yet seen. Post the fee motion on the settlement website at least 14 days before the objection deadline — and preferably 30.

Phase 8 — CAFA notice and the 90-day clock

  • [ ] Serve CAFA notice under 28 U.S.C. § 1715 within 10 days after the proposed settlement is filed with the court.
  • [ ] Serve the appropriate federal official (the U.S. Attorney General, or the primary federal regulator if the defendant is a regulated entity such as a bank) and the state attorney general of every state in which a class member resides.
  • [ ] Include the § 1715(b) contents: the complaint, notice of any scheduled hearing, any proposed or final notice to the class, the settlement agreement, any side agreements, any final judgment, and either the names of class members per state or a reasonable estimate of the per-state proportion of the class.
  • [ ] Calendar the 90-day waiting period: under § 1715(d), a court may not issue a final approval order earlier than 90 days after the later date on which the appropriate federal and state officials are served.
  • [ ] File a declaration of CAFA compliance from the administrator before final approval.

Why it matters, and the traps. This is the single most avoidable disaster in class settlement practice. Section 1715(e) provides that a class member may refuse to comply with and may choose not to be bound by a settlement agreement or consent decree if the required notice was not provided. A defective CAFA notice therefore hands every class member a collateral-attack argument against the very release the defendant paid for — which is the defendant's entire consideration.

Two mechanical traps. First, the 10-day trigger runs from filing the proposed settlement, not from preliminary approval. Second, the 90 days runs from service, not from the preliminary approval order — and it runs to the date of the final approval order, not the hearing. Schedule the final approval hearing at least 95–100 days out and you will never think about it again. CAFA itself (28 U.S.C. § 1332(d)) is also the jurisdictional basis for most of these cases; if you removed under CAFA, confirm the removal record is clean before you ask for a classwide judgment.

Phase 9 — Claims administration and the settlement fund

  • [ ] Select the administrator through a competitive bid; disclose the bids and the relationship (if any) with class counsel.
  • [ ] Cap administration costs in the agreement and disclose them in the notice.
  • [ ] Establish a qualified settlement fund under 26 U.S.C. § 468B and Treas. Reg. § 1.468B-1; get tax counsel on the structure and on any Form 1099 reporting for class payments.
  • [ ] Define the fraud-detection protocol (deduplication, IP and device screening, identity verification) — digital claims fraud is now a real and quantified problem.
  • [ ] Define the dispute process for rejected claims (a neutral, and a written standard).
  • [ ] Require regular reporting: notice reach, claims filed, claims rejected and why, opt-outs, objections.
  • [ ] Specify what happens to uncashed checks (re-issuance window, then second distribution or cy pres — never reversion).

Why it matters, and the traps. The administrator's declaration is the evidentiary spine of the final approval motion. If it is thin, the record is thin. Insist on a reach estimate and a claims-rate number, and get the deduplication protocol on paper before the first claim arrives — settlement fraud rings now file six-figure volumes of automated claims, and a court that learns of fraud after approval has a very bad set of options.

Phase 10 — Attorney's fees: percentage vs. lodestar, and the red flags

  • [ ] File the fee motion under Rule 23(h) and Rule 54(d)(2), on notice to the class, before the objection deadline.
  • [ ] Choose the method: percentage-of-the-fund (the modern default in common-fund cases under Boeing Co. v. Van Gemert, 444 U.S. 472 (1980)) or lodestar (mandatory in fee-shifting statutory cases; see Hensley v. Eckerhart, 461 U.S. 424 (1983), and note that enhancements are rare under Perdue v. Kenny A., 559 U.S. 542 (2010)).
  • [ ] Run the lodestar cross-check even in a percentage case — report hours, rates, and the implied multiplier.
  • [ ] Benchmark against your circuit (the Ninth Circuit's 25% benchmark; the Third Circuit's declining-percentage approach for megafunds) and justify any upward departure.
  • [ ] Scrub for the Bluetooth trio: disproportionate fee, clear-sailing clause, kicker/reverter.
  • [ ] Consider staging payment: a portion on final approval, the balance after distribution is complete and reported.
  • [ ] If the settlement is a coupon settlement, apply 28 U.S.C. § 1712 — fees attributable to coupons must be calculated on the value of coupons actually redeemed.

Why it matters, and the traps. Trellis Pay has a clear-sailing clause: Trellis will not oppose a fee up to 30%. Clear-sailing is not per se improper, but it is a Bluetooth factor, and it means the fee will be adversarially tested only by objectors and the court. Counsel's answer must be substantive: the fund is non-reversionary (so a lower fee goes to the class, not back to Trellis — no kicker), the requested percentage is above the 25% benchmark and must be justified by results (a near-100% participation rate, real injunctive relief), and the lodestar cross-check shows a 1.9x multiplier on 11,400 hours — defensible, and disclosed. Ask for 30%; expect 25%; be genuinely happy with either. On fee doctrine generally, Damages in Employment Litigation: Back Pay, Statutory Caps, and Punitive Awards illustrates how statutory fee-shifting interacts with class recovery.

Phase 11 — Service awards and the circuit split

  • [ ] Determine your circuit's rule before you promise a named plaintiff anything.
  • [ ] If awards are permitted, keep them modest, tie them to documented time and burden, and disclose the amount in the notice.
  • [ ] Never make the service award contingent on the representative's support for the settlement — that is a conflict, full stop.
  • [ ] Consider whether the award creates a Rule 23(a)(4) adequacy problem (a representative promised $15,000 out of a fund paying class members $8 is not obviously loyal to the class).
  • [ ] Have a fallback: draft the agreement so that a denial of the service award does not unravel the deal.

Why it matters, and the traps. This is genuinely unsettled, and the answer depends on where you are. The Eleventh Circuit held in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244 (11th Cir. 2020), that incentive awards to class representatives are prohibited by two nineteenth-century Supreme Court common-fund decisions, Trustees v. Greenough, 105 U.S. 527 (1882), and Central Railroad & Banking Co. v. Pettus, 113 U.S. 116 (1885), which permit reimbursement of litigation costs and attorney's fees from a common fund but not a salary or bounty for the plaintiff. Other circuits — including the First, Second, Sixth, Seventh, and Ninth — have continued to approve reasonable service awards, expressly declining to follow Johnson. The Supreme Court has not resolved the split.

Practical consequence: in the Eleventh Circuit, do not build a service award into the deal. Elsewhere, keep it proportionate and severable. Verify the current state of the law in your circuit before filing — this is an area where a single en banc decision or a grant of certiorari could change the answer.

Phase 12 — Cy pres and coupon settlements

  • [ ] Use cy pres only for a genuine residue after a second distribution to claimants is infeasible.
  • [ ] Select recipients whose mission is as near as possible to the interests of the class and the purposes of the statutes sued upon.
  • [ ] Disclose any relationship between the recipient and counsel, the parties, or the court — and if one exists, pick someone else.
  • [ ] Name the recipients in the class notice, not after approval.
  • [ ] If any part of the relief is a coupon, voucher, or discount, run 28 U.S.C. § 1712 in full: heightened scrutiny under § 1712(e), a written finding that the settlement is fair, and redemption-based fee calculation.
  • [ ] Consider whether coupons should be freely transferable and whether they stack with other promotions — non-transferable, non-stackable, short-fuse coupons are worth close to nothing and courts know it.

Why it matters, and the traps. Cy pres is under sustained judicial suspicion. Chief Justice Roberts, respecting the denial of certiorari in Marek v. Lane (2013), flagged fundamental unresolved questions about when, if ever, cy pres relief is appropriate. The Supreme Court took up a cy pres-only settlement in Frank v. Gaos, 139 S. Ct. 1041 (2019) (per curiam), and then declined to reach the merits, remanding on Article III standing instead. The doctrine therefore remains alive but disfavored — and a settlement whose only relief is a charitable donation, with a large fee attached, is the archetype of what objectors and appellate courts look for.

The rule of thumb: money should go to class members until it cannot. A first distribution, then a second pro rata distribution to claimants, then — and only then — a residual to a well-matched nonprofit.

Phase 13 — Objectors, Rule 23(e)(5), and appeals

  • [ ] Set an objection deadline that follows publication of the fee motion.
  • [ ] Require objections to state, per Rule 23(e)(5)(A), whether the objection applies only to the objector, to a subset, or to the whole class, and the grounds — with specificity.
  • [ ] Distinguish the substantive objector (fix the deal) from the serial objector (extract a toll). Respond to the first on the merits; do not pay the second quietly.
  • [ ] Remember Rule 23(e)(5)(B): court approval is required for any payment or other consideration in connection with (i) forgoing or withdrawing an objection, or (ii) forgoing, dismissing, or abandoning an appeal from a judgment approving the proposal.
  • [ ] File a written response to every objection; a reasoned response is what makes the final approval order appeal-proof.
  • [ ] Anticipate appeal: an unnamed class member who objected may appeal the approval order without intervening — Devlin v. Scardelletti, 536 U.S. 1 (2002).
  • [ ] Calendar the appeal window and consider whether to seek an appeal bond.

Why it matters, and the traps. The 2018 amendment to Rule 23(e)(5)(B) was aimed squarely at objector blackmail: the practice of filing a boilerplate objection, appealing the approval order, and then selling the dismissal of the appeal — a delay tax that came straight out of the class's pocket. The rule now makes any such payment subject to court approval, on the record, at any stage including on appeal. The practical instruction is simple: do not settle with an objector off the docket. Take the appeal. Objector economics collapse when the payoff must be disclosed and approved.

In Trellis Pay, Merrick Vance files a two-page objection asserting that the fee is "excessive" and the release "overbroad," with no analysis. Class counsel responds on the merits in four pages — lodestar cross-check, redlined release scope — and separately notes Vance's appearance in eleven prior settlements. The court overrules the objection, enters judgment, and when Vance appeals, counsel declines to pay him a dollar. The appeal is dismissed as frivolous eight months later. For the mechanics on that side, see Taking a Civil Appeal: A Practical Checklist and Federal Civil Appeals: A Comprehensive Guide.

Phase 14 — The final approval hearing, findings, and judgment

  • [ ] Confirm the CAFA 90 days has run before the court signs the final order.
  • [ ] File the final approval motion and the administrator's declaration (reach, claims, opt-outs, objections) at least 14 days before the hearing.
  • [ ] File the opt-out list — and, in a Rule 23(e)(4) case, consider whether the court should offer a second opt-out window now that terms are known.
  • [ ] Be ready for a hearing that is real: the court may take testimony, may question the claims rate, and may deny approval.
  • [ ] Submit a proposed order with findings, not conclusions: findings on each Rule 23(a) and 23(b) element, each Rule 23(e)(2) factor, the adequacy of notice (constitutional and Rule 23(c)(2)(B)), CAFA compliance, the fee (with the lodestar cross-check figures), the service award, and the release scope.
  • [ ] Enter a separate judgment under Rule 58 and a clear injunction/bar order against relitigation of released claims.
  • [ ] Retain jurisdiction to enforce the settlement and to supervise distribution; set a post-distribution accounting date.
  • [ ] After distribution, file the post-distribution accounting: dollars paid, checks cashed, residual disposition.

Why it matters, and the traps. The final approval order is the document an appellate court will read. Courts reverse settlement approvals overwhelmingly for inadequate findings — a "the Court finds the settlement fair, reasonable, and adequate" recital with no reasoning is unreviewable and gets vacated. Write the order as if you are the reviewing judge. And do not skip the post-distribution accounting: many districts now require it by standing order, and a settlement that delivered 3% of the fund to the class after promising 40% is exactly the record that produces the next round of restrictive case law.

Common mistakes to avoid

  1. Filing a thin preliminary approval motion. Rule 23(e)(1)(B) demands a front-end showing on both approvability and certifiability. A short motion invites a denial that hands objectors a roadmap.
  2. Blowing the CAFA clock. Ten days to serve; ninety days before the court can sign. Get it wrong and § 1715(e) lets class members walk away from the release.
  3. The reversionary fund plus clear sailing plus a kicker. The Bluetooth trifecta. Eliminate at least the reverter.
  4. A release broader than the factual predicate. Defense transactional instincts will overreach. Litigators must hold the line, or the deal is unenforceable where it matters.
  5. A claims process designed to fail. Documentation demands, short windows, and paper-only submission suppress take rates — and courts now measure them under Rule 23(e)(2)(C)(ii).
  6. Filing the fee motion after the objection deadline. Rule 23(h) requires class members to be able to object to an actual number.
  7. Assuming service awards are fine. They are not, in the Eleventh Circuit. Check your circuit; make the award severable.
  8. Ignoring intra-class conflicts. Amchem is not a technicality. Subclass, or lose the class.
  9. Nationwide state-law classes with no choice-of-law work. Build the record on variation, or the predominance finding will not survive.
  10. Paying an objector quietly. Rule 23(e)(5)(B) now requires court approval — including for dismissing an appeal.
  11. Valuing non-cash relief at retail. Credit monitoring is worth what it costs, not what the vendor's website says.
  12. A conclusory final approval order. No findings, no affirmance.

The consolidated settlement-approval checklist

Structure and class

  • [ ] Non-reversionary fund (or a very good reason)
  • [ ] Fees negotiated after class relief; mediator declaration secured
  • [ ] All Rule 23(e)(3) side agreements identified, including any blow provision
  • [ ] Settlement class ascertainable; Rule 23(a) and 23(b) satisfied (Amchem); no intra-class conflict
  • [ ] TransUnion standing confirmed for every damages class member
  • [ ] Release limited to the identical factual predicate; personal-injury carve-out

Relief and process

  • [ ] Direct distribution wherever records permit; claim form minimal if required
  • [ ] Take rate modeled and disclosed; second distribution before any cy pres
  • [ ] Qualified settlement fund established; administrator selected by bid; fraud protocol in place

Motions and notice

  • [ ] Rule 23(e)(1) motion makes the "likely be able to approve and certify" showing
  • [ ] All four Rule 23(e)(2) factors briefed with evidence
  • [ ] Notice satisfies Rule 23(c)(2)(B) (all seven elements, plain language, electronic means permitted); reach estimated at 70%+
  • [ ] Settlement website live; fee motion posted before the objection deadline

CAFA

  • [ ] § 1715 notice served on the appropriate federal official and every state AG within 10 days of filing
  • [ ] Final approval date set at least 90 days after the later CAFA service
  • [ ] CAFA compliance declaration filed

Fees and awards

  • [ ] Rule 23(h) motion filed on notice; percentage benchmarked; lodestar cross-check disclosed
  • [ ] Bluetooth factors addressed head-on
  • [ ] § 1712 applied if any coupon relief
  • [ ] Service award consistent with circuit law and severable

Endgame

  • [ ] Every objection answered in writing; no off-docket payments (Rule 23(e)(5)(B))
  • [ ] Final approval order contains findings on certification, each 23(e)(2) factor, notice, CAFA, fees, awards, and release
  • [ ] Rule 58 separate judgment; jurisdiction retained
  • [ ] Post-distribution accounting filed

Primary Authority

A currency note on the authorities above. Rule 23 itself is stable, but the practice around it is not. The service-award question is the subject of a live circuit split that a single en banc or certiorari grant could resolve in either direction; circuit fee benchmarks and megafund practice shift; and many districts impose settlement requirements by standing order that appear nowhere in Rule 23. Where the underlying claims are creatures of state law — UDAP, warranty, unjust enrichment, insurance, or tort theories — there is no nationwide rule, and both the merits and the predominance analysis turn on state-by-state variation you must actually research. Shepardize or KeyCite every case in this section before you cite it, and check your district's standing orders and your circuit's most recent settlement-approval decisions.

Secondary sources: Newberg and Rubenstein on Class Actions (the standard treatise); Wright & Miller, Federal Practice and Procedure §§ 1797–1803; Manual for Complex Litigation (Fourth) § 21.6 (settlement); Federal Judicial Center, Judges' Class Action Notice and Claims Process Checklist and Plain Language Guide; American Law Institute, Principles of the Law of Aggregate Litigation (2010).

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This checklist is general legal information from UpLaw (uplaw.us), not legal advice, and does not create an attorney-client relationship. Class settlement practice varies meaningfully by circuit and by district standing order — most notably on service awards, fee benchmarks, and post-distribution accounting — and the law changes over time; verify current requirements and consult qualified counsel before acting.