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Settlement Issues May Force 9th Circ. Rethink Of Hyundai Kia

June 29, 2018

Law360
By Linda Chiem

Consumer class action settlements are hitting snags after the Ninth Circuit ruled in January that courts must weigh whether varying state consumer protection laws were thoroughly considered in nationwide deals, signaling that the federal appeals court may revisit the controversial ruling, attorneys say.

Wary of being faulted for failing to scrutinize a settlement class to the same degree as a litigation class in light of the Ninth Circuit’s Hyundai Kia ruling, several district court judges have sidelined or have only conditionally approved nationwide settlements in several recent class actions. These include a $32.5 million deal that Uber Technologies Inc. reached in a dispute over its “safe rides fee” and a $5.4 million deal that Tesla Inc. negotiated in a suit over its Autopilot feature, among others.

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Peter Breslauer, a partner with Montgomery McCracken Walker & Rhoads LLP, told Law360 that the state-law analysis question is tricky in the settlement context.

“I think the Ninth Circuit panel’s decision was more concerned [about] substantive rights of class members than it was about manageability,” Breslauer said. “The Ninth Circuit has something of a reputation of being a historically favorable circuit for class actions … so I would think the Ninth Circuit will give this petition for rehearing careful consideration.”

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