Recent Class Action Settlement Activity
There has been a great deal of activity in class action litigation over the past several weeks, including a number of settlements. We will mention several significant settlements below.
HSBC Bank Settles Gold Price-Fixing Class Action For $42 Million
HSBC Bank investors and traders have asked a New York federal judge to preliminarily approve a $42 million agreement to settle class action claims that the bank was one of several to engage in illegal price-fixing of the gold market.
HSBC would also provide transaction data and discovery to help the Plaintiffs continue to go after the banks remaining in the suit – The Bank of Nova Scotia, Barclays Bank PLC, Société Générale SA and The London Gold Market Fixing Ltd. – pursuant to the agreement. The March 2014 putative antitrust class action represents 18 consolidated suits that allege several banks were involved in a wide-ranging alleged conspiracy to price-fix the gold market.
London Gold Market Fixing Ltd. members held secret meetings to share information on the real-time price of gold to set a rate beneficial to the members, including Barclays, HSBC and Deutsche Bank, according to the suit. The HSBC settlement is the second such settlement in the class action following a 2016 settlement with Deutsche Bank AG for $60 million. UBS AG was dismissed from the suit in 2018.
The settlement class would be anyone who from Jan. 1, 2004, through June 30, 2013, bought or sold any physical gold or financial or derivative instrument, including futures contracts. The motion for preliminary approval of the settlement agreement with HSBC asks U.S. District Judge Valerie E. Caproni to combine notice of the HSBC and Deutsche Bank settlements and distribute the money from both settlements to the identical settlement class.
Quinn Emanuel Urquhart & Sullivan LLP and Berger & Montague PC, co-lead counsel for the Deutsche Bank AG settlement class, and proposed co-lead counsel for the HSBC settlement, would seek up to $28.2 million for attorney fees, 28% of the $102 million common settlement fund, according to the motion for settlement approval. HSBC, among other banks, tried unsuccessfully to get the claims dismissed, arguing in 2017 that the data analysis used by a group of investors and traders don’t support allegations of collusive trading once the flaws are corrected.
Barclays and Societe Generale got a partial win in 2019 when Judge Caproni allowed them to redact some customer data from discovery production, but the judge rejected the request from HSBC and Bank of Nova Scotia. Daniel L. Brockett of Quinn Emanuel Urquhart & Sullivan LLP, counsel for the Plaintiffs, said in a statement:
We are pleased with the HSBC settlement. Together with the earlier $60 million settlement with Deutsche Bank, we have now recovered over $100 million for the gold investors who are part of the class action. We look forward to continuing to prosecute the case against the remaining defendants.
Plaintiffs are represented by Merrill G. Davidoff, Martin I. Twersky, Michael C. Dell’Angelo and Zachary D. Caplan of Berger & Montague PC and Daniel L. Brockett, Sami H. Rashid, Alexee Deep Conroy and Christopher M. Seck of Quinn Emanuel Urquhart & Sullivan LLP.
The case is In Re: Commodity Exchange Inc., Gold Futures and Options Trading Litigation (case number 1:14-md-02548) in the U.S. District Court for the Southern District of New York.
Pork Buyers Seek Initial Approval Of $24.5 Million Settlement
Direct buyers have moved for preliminary approval of a $24.5 million settlement with JBS USA Food Co. (JBS). The settlement also comes with a company pledge to provide “material cooperation” to the Plaintiffs. This is the first settlement in the massive Minnesota federal court case accusing pork producers of conspiring to raise prices.
The proposed class action settlement is the “first ‘ice-breaker’ settlement in this litigation.” It offers “significant and substantial relief” because of the financial payout along with cooperation against JBS’s fellow pork producers, which include Tyson and Hormel, according to the brief. The direct buyers said:
[T]he settlement agreement is the product of protracted arm’s-length settlement negotiations with the assistance of an experienced and nationally-renowned mediator, provides substantial monetary and nonmonetary relief to the DPP settlement class, and should be granted preliminary approval because it falls well within the range of possible approval.
The filing represents the first disclosure of the settlement terms after the buyers and JBS first said they had reached a settlement in early November.
Thirteen putative classes filed complaints in 2018 against JBS and others – claiming they manipulated the price of pork by restricting supply as early as 2009. The lawsuits claimed that the producers were able to do this through coordinating public statements and sharing price information.
The lawsuits were later consolidated in August 2018. Buyers were put into classes of direct purchasers, indirect buyers that resold the pork and indirect purchasers like consumers. With their first settlement in hand, the direct buyers said that their settlement had all the hallmarks required for approval, including “extensive good faith negotiations.”
The settlement would cover anyone who bought pork “for use or delivery in the United States” directly from JBS “or any co-conspirator” from 2009 until the date of preliminary approval. Thousands of such buyers are estimated to comprise the class. Certification is also sought for that class.
The settlement does, however, give JBS the power to terminate the agreement if would-be class members “representing more than a specified [and sealed] portion of relevant transactions” decide to opt out.
Claims against the other producers are also moving forward after U.S. District Judge John R. Tunheim largely refused in October to dismiss the claims.
The direct purchasers are represented by W. Joseph Bruckner, Brian D. Clark, Simeon A. Morbey and Arielle S. Wagner of Lockridge Grindal Nauen PLLP and Clifford H. Pearson, Daniel L. Warshaw, Bobby Pouya, Michael H. Pearson, Bruce L. Simon, Melissa S. Weiner and Joseph C. Bourne of Pearson Simon & Warshaw LLP.
The case is In re: Pork Antitrust Litigation (case number 0:18-cv-01776) in the U.S. District Court for the District of Minnesota.
Allstate And Drivers Reach Settlement In $10 Million ‘Diminished Value’ Suit
A Washington federal judge has preliminarily approved a $10 million class action settlement in a lawsuit filed by drivers accusing Allstate Fire & Casualty Insurance Co. of not covering all of the losses they incurred under the company’s uninsured motorist (UIM) policy.
According to the suit, the company and its various entities in the state did not cover “diminished value” losses when a car was repaired after an accident with an uninsured motorist. The proposed settlement would cover an estimated 14,418 claims filed in Washington and pay an average estimate of $500 per vehicle, according to the unopposed settlement filed by Plaintiff drivers Daniel Kogan and Christopher Hewitt. The drivers said in the proposed settlement:
The proposed settlement here provides an excellent resolution to this now over five-year-old litigation, warranting preliminary approval and submission to the class for its consideration. It would resolve this matter, providing an end to hard-fought litigation that has consumed considerable time of the court and the parties’ counsel.
The lawsuit was first filed in Washington Superior Court in 2015 and Allstate removed it to federal court. The drivers said in the complaint:
Plaintiffs allege that when certain automobiles, those within the proposed class, sustain damage to their structural systems and bodies, they cannot be repaired to their pre-accident condition, and are as a result tangibly different than they were pre-accident. This causes the vehicles to suffer a loss in value called diminished value at the time of the accident.
The complaint added that the uninsured motorist portion of Allstate’s policies in Washington did not include a diminished value exclusion, but the company excluded it anyway and “continued with its practice of failing to disclose the loss or coverage, and failing to adjust losses to consider and include payment for diminished value in settling first-party UIM claims.”
The proposed settlement would certify a conditional class of drivers who submitted UIM claims from July 6, 2009, through the approval of the proposed settlement with specific requirements including that repair estimates on the vehicle totaled at least $1,000, the vehicle was no more than six years old, and that it had less than 90,000 miles on it at the time of the accident.
The proposed settlement of $10,092,600 also includes 21.5% of the fund for attorney fees and $28,000 for costs. The Plaintiffs are represented by Scott P. Nealey and Stephen M. Hansen, who were named by the court as class counsel.
The case is Daniel Kogan et al. v. Allstate Fire and Casualty Insurance Co. (case number 3:15-cv-05559) in the U.S. District Court for the Western District of Washington.
Massachusetts Truckers Getting $12.5 Million Settlement To End Training Fee Case
CRST International Inc. has agreed to pay $12.5 million to settle a certified class and collective action from thousands of drivers who said the commercial trucking company illegally deducted money from their paychecks for a training program.
A motion for preliminary settlement approval was filed by the drivers. The defendants are CRST and its long-haul trucking division CRST Expedited Inc.
Truck driver Juan Carlos Montoya filed the lawsuit in January 2016. He claimed that Iowa-based CRST violated the Fair Labor Standards Act (FLSA) and Iowa wage laws by failing to pay all wages it owed drivers and making improper deductions from their paychecks to cover the supposed costs of a training program it had advertised as “free.”
In court in April 2018, U.S. District Chief Judge Patti B. Saris called the matter “a really important case” that “could govern standards in the trucking industry.” Judge Saris certified the collective action the following month, and in September 2019 said most of the certified class and collective action could move forward after cross-motions for summary judgment by both parties. The drivers and CRST had announced in November 2020 that they had reached a settlement.
Besides the monetary payout, CRST also agreed to release class and collective members from its further efforts to collect on training school costs beyond what the company paid the school for tuition. And beginning in January, the company would treat drivers in the training program as employees and pay them minimum wage, among other promises set out in the agreement.
Montoya is represented by Hillary A. Schwab and Rachel J. Smit of Fair Work PC and by Andrew Schmidt and Peter G. Mancuso of Andrew Schmidt Law PLLC. The case is Montoya v. CRST Expedited Inc. (case number 1:16-cv-10095) in U.S. District Court for the District of Massachusetts.
$19.5 Million Settlement In TechnipFMC Investor Suit Gets Initial Approval
A Texas federal judge has granted preliminary approval to a $19.5 million settlement in a securities class action against TechnipFMC, which accused the French oil and gas company of misleading investors by misstating its financial data. Lead Plaintiff Joseph Prause first filed suit in August 2017, accusing TechnipFMC of violating the Securities Exchange Act when it miscalculated its net income by converting foreign currencies using incorrect exchange rates. The suit claims the company overstated its net income by roughly $209.5 million in its 2017 first-quarter financial report. Once investors learned of the erroneous financial reporting, TechnipFMC’s share price fell by 1.71% in July 2017.
On Dec. 16, U.S. District Judge Alfred H. Bennett approved the multimillion-dollar settlement, preliminarily certified the class for settlement purposes and set a March 19 date for a final approval hearing.
At the approval hearing next year, Judge Bennett will issue a final determination to approve the attorney fees, the settlement fund and the proposed allocation plan. The securities class action isn’t the only litigation TechnipFMC has faced in recent years. The company was fined $296 million in June 2019 to resolve charges that the company engaged in a pair of schemes to bribe officials in Iraq and Brazil. And in September 2019, the oil company doled out $5 million to settle U.S. Securities and Exchange Commission bribery claims.
The investors are represented by Jeremy A. Lieberman of Pomerantz LLP. The suit is Joseph Prause v. TechnipFMC PLC et al. (case number 4:17-02368) in the U.S. District Court of the Southern District of Texas.