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I know that the out of court settlements subject to FRCP 23 require court approval. If the plaintiff and defendant are each in

Elmhurst, NY |

agreement to the terms in this, a class-action suit and the plaintiffs will be adequately compensated, can the court disapprove of the amount the lead plaintiff will receive? In an actual case, the defendant is more than willing to settle out of court; if they didn't, they would have to pay out damages than are far greater than those obtained via settlement, not to mention serious harm to the company by a loss of business, and severe stock losses and embarrassment. I'm sure the defendant would be outraged at the lead plaintiff's demand, but they would probably capitulate (UNLESS there is some ruling that would preclude this) , realizing that discretion is the better part of valor.Is there confidentiality in federal class actions which are settled out of court or just no admission of guilt

Attorney Answers 2


  1. First, no defendant in a class action would ever admit to liability (guilt is a concept that applies to criminal cases) as part of a settlement; that's just how it goes. Second, class action settlements are are never confidential, although counsel do not have to reveal their precise motivations in agreeing to settlement. Third, If plaintiffs' lead counsel and defendants' counsel have agreed to a settlement, including amounts payable to lead plaintiffs, it is highly unlikely that the court would tinker with something as minor as lead plaintiff compensation.

    Upon notice of the final hearing to approve a class settlement, a class member may become an Objector and submit papers opposing specific elements of the settlement. But unless the objections are by a large number of class members and the part of the settlement that is objected to would cause a real detriment to the class, judges will politely consider but ultimately ignore the objections.


  2. OK, this is the third time you have posted a question, and you still don't seem to understand that there is no confidentiality for settlements of class actions. The papers that are filed with the court in order to obtain preliminary approval and final approval of a class action settlement are extremely detailed, and must set forth all material terms of the settlement. Those papers are a matter of public record. It would be illegal for the parties to withhold information from the court and the class about some kind of secret side deal. Assuming the lawyers involved in this case are ethical, and want to be able to continue practicing law, they would never agree to a secret side deal.

    As for admissions of guilt, as my colleague stated, the concept of guilt only applies to criminal cases. Class actions are civil cases, not criminal, and the concept of guilt does not apply. More to the point, the defendants do not admit to liability or wrongdoing in the settlement of a class action because the idea of a settlement is that it is a compromise of valid claims by the plaintiff(s) and viable defenses by the defendant(s). Furthermore, in a class action, members of the class have the opportunity to exclude themselves from a settlement. If a defendant admitted to liability in the settlement documents, then anyone who opts-out of the class would only need to prove damages to obtain a recovery from the defendant. No defendant would agree to such a thing.

    As for "compensation" for the lead plaintiff, that is something that is completely within the court's discretion (just like the award of attorneys' fees for plaintiffs' counsel). A named plaintiff in a class action is eligible to receive whatever benefits they would otherwise be entitled to receive as a class member. They can also seek an incentive award, which must be approved by the court (and is paid by the defendant(s)). Although the parties can agree to an amount for such incentive awards, the court is not bound by such agreements, and will make its own judgment as to what is fair and appropriate. And the court is not going to approve an amount that would be a huge windfall for the lead plaintiff. It will be an amount that reflect the amount of time the lead plaintiff spent on the case assisting his lawyers and the overall outcome of the case.

    Legal Information is Not Legal Advice My answer provides information about the law based on the limited information provided in the questions asked and is not intended to provide legal advice or opinions, and does not constitute an attorney-client relationship. The answer to the question is for educational and informational purposes only. The law differs in each jurisdiction and may be interpreted or applied differently depending on the jurisdiction or situation. Accordingly, I highly recommend that you consult with an attorney to discuss the details of your problem so you can get legal advice tailored to your particular circumstances.

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