Class Action: Uber Class Action Settlement Challenges Were Not Sustained On Appeal

Main Reason Was That The Settlement Was Not A “Coupon” Settlement.

            The Ninth Circuit, in McKnight v. Hinojosa (Uber Technologies, Inc.), Case Nos. 21-16623 et al. (9^th Cir. Nov. 30, 2022) (published), affirmed a class action settlement against Uber over certain objectors’ challenges. 

            The district court approved a class action settlement, after concluding that “coupon” settlement restrictions did not apply, by awarding class counsel close to $5.7 million, 17.5 of the face value of the settlement fund and 2.9 times the lodestar—even though they sought $8.125 million in fees (25% of face value of the settlement fund and a 4.4 multiplier on a $1.961 million lodestar).

            Objectors primarily argued this was too rich, because they argued that the settlement was a coupon settlement with stricter restrictions.

            The Ninth Circuit disagreed.  Two of the three factors on gauging a coupon settlement cut against such a determination—class members can claim their award upfront or get a passive cash payment and a reversionary payment feature provided a flexible alternative to using credits as well as saving administrative expenses.