Class Action

New Fifth Circuit class action settlement decision: In re: Katrina Canal Breaches Litigation

By Kimberly A. Kralowec

In In re: Katrina Canal Breaches Litigation, ___ F.3d ___ (5th Cir. Dec. 16, 2010), the Fifth Circuit reversed an order granting final approval of a class action settlement.  The opinion discusses the "limited fund mandatory class," and summarizes the holding as follows:

Appellants, objecting members of a proposed settlement class of plaintiffs damaged or injured by Hurricanes Katrina or Rita, seek review of the district court?s certification of a limited fund mandatory class under Federal Rule of Civil Procedure 23(b)(1)(B) and its approval of a final class settlement. We hold that the Supreme Court?s opinion in Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), requires decertification of the mandatory class because the settlement fails to provide a procedure for distribution of the settlement fund that treats class claimants equitably amongst themselves. We further hold that the settlement is not fair, reasonable and adequate because its proponents fail to show that the class members will receive some benefit in exchange for the divestment of their due process rights in a mandatory class settlement. We therefore reverse.

Slip op. at 5.  [Via How Appealing.]

This decision reminds me about the Third Circuit diamonds case, Sullivan v. DB Investments, which is scheduled for argument on February 23, 2011.  We'll all want to mark our calendars.  Also on the horizon is the U.S. Supreme Court's decision in AT&T Mobility LLC v. Concepcion, no. 09-893, which was argued on November 9, 2010. 

Full post as published by The UCL Practitioner on December 20, 2010 (boomark / email).