We wrote last month about the $33 million settlement in a class action lawsuit filed against Norcold Inc., Thetford Corp. and Dyson-Kissner-Moran Corp. involving refrigerators that were alleged to be defective. Since then a California federal judge has refused to grant preliminary approval for the settlement. U.S. District Judge Josephine L. Stanton denied the Plaintiffs’ motion for approval of the settlement terms without prejudice, saying the court lacks adequate information to determine the incentive amounts for named Plaintiffs, who would receive $100 per hour for their assistance, with a suggested $5,000 minimum award. Judge Stanton wrote:
Because settling plaintiffs have not provided the court with any estimates of the number of hours the proposed class representatives have expended, the court cannot determine whether or not the incentive awards corrupt the proposed class representatives. Consequently, the court cannot conditionally certify the class.
Judge Stanton said in this case there is nothing inherently improper about a class representative settling an individual claim with a defendant, but added this agreement provides that consideration for the release of reserved claims will be paid only in the event the entire settlement is approved. Judge Stanton wrote:
There is no compelling reason to link the two settlements, and doing so provides those plaintiffs releasing their reserved claims with a substantial reason to support the settlement separate and apart from any interest they have solely as members of the settlement class. This conflict destroys the adequacy of those eight plaintiffs releasing their reserved claims.
Judge Stanton said the settlement class could not be certified. The Plaintiffs were given 60 days to file an amended motion addressing the deficiencies outlined in Judge Stanton’s order. I believe that this settlement will ultimately be approved.