After a proposed settlement had been rejected by the Seventh Circuit, counsel went to the well a second time, making minor improvements to the deal. Though appreciating the district court’s thoughtful and well-reasoned analysis with respect to other objections, the court of appeal was nevertheless troubled by the proper valuation of the claims. The court of appeal noted that district courts must “‘exercise the highest degree of vigilance in scrutinizing proposed settlements of class actions’ to consider whether the settlement is ‘fair, adequate, and reasonable, and not a product of collusion.’ Indeed, the district court judge functions as ‘a fiduciary of the class, who is subject therefore to the high duty of care that the law requires of fiduciaries.’ As a general principle, a district court should evaluate, among other things, the probability of plaintiff prevailing on its various claims, the expected costs of future litigation, and hints of collusion.” Because at least a subset of the subclass receiving no relief would appear to have statutory damage claims of $25-$35 under Massachusetts law, the case was remanded a second time for further consideration. “In basic terms, a claim analysis under these circumstances would require consideration of (1) the probability of the information-sharing class having grounds of recovery under any applicable law; (2) the probability of such favorable law applying to the entire information-sharing class (rather than differing subsets); and (3) the probability of winning on the merits.” Thus, on remand, the district court was asked to consider and analyze the full cross-section of potentially applicable state law and arrive at a clearer estimate of the potential value of the information-sharing class’ claims. Mirfasihi v. Fleet Mortg. Corp., 450 F.3d 745 (7th Cir. 2006).
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