class-action-settlement

# Class Action Settlement Agreement

Drafts a court-approvable class action settlement balancing class member interests, defendant finality, and FRCP 23(e) fairness standards.

## Prerequisites

1. **Case materials** — complaint, class certification order, case number, jurisdictional details
2. **Term sheet or negotiation record** — agreed monetary amounts, allocation methodology, key terms
3. **Class definition** — certified or proposed class and any subclasses
4. **Damages analysis** — theories, calculations, aggregate and per-member ranges
5. **Party information** — all named parties, class representatives, counsel of record

## Output Structure

Draft a formal settlement agreement with the following articles in order.

### Article I — Recitals

| Element | Content |
|---|---|
| Litigation background | Case caption, court, claims asserted, procedural history |
| Certification status | Class cert order date and scope, or proposed settlement class |
| Settlement purpose | Compromise to avoid risk/expense; no admission of liability |
| Negotiation history | Arms-length negotiation, mediator involvement if any |

### Article II — Definitions

Define all capitalized terms at the outset. At minimum:

- Settlement Fund, Net Settlement Fund, Settlement Class, Class Period
- Released Claims, Released Parties, Effective Date
- Claims Administrator, Class Counsel, Class Representatives
- Claim Form, Opt-Out Deadline, Objection Deadline

### Article III — Settlement Fund & Payment

- **Total amount** — non-reversionary common fund
- **Payment schedule** — deadlines, escrow/QSF account details
- **Fee treatment** — fund inclusive or exclusive of fees/costs
- **Tax provisions** — QSF treatment under IRC § 468B; each party bears own tax liability
- **Investment** — permitted investment pending distribution

### Article IV — Class Definition & Release

- **Class definition** — mirror or refine certification order language
- **Release scope** — all asserted and unasserted claims arising from same facts/transactions
- **Unknown claims waiver** — Cal. Civ. Code § 1542 waiver or jurisdiction equivalent if applicable [VERIFY]
- **Binding effect** — binds all class members except valid opt-outs
- **Released parties** — entity, officers, affiliates, insurers

### Article V — Allocation Plan & Claims Process

| Component | Requirements |
|---|---|
| Allocation formula | Objective methodology (pro rata, tiered by damages, claim strength) |
| Claim form | Required fields, supporting documentation, submission methods |
| Filing deadline | Minimum 60–90 days post-notice |
| Validation | Administrator authority to accept/reject; deficiency cure period |
| Dispute resolution | Process for contested claims |
| Unclaimed funds | Cy pres distribution or pro rata reallocation — specify which |

### Article VI — Fees, Costs & Incentive Awards

- **Attorney's fees** — maximum percentage or dollar cap; methodology (percentage-of-fund or lodestar cross-check)
- **Litigation costs** — reimbursement cap, subject to court approval
- **Incentive awards** — per-representative amount, subject to court approval
- All payments from Settlement Fund unless otherwise specified

### Article VII — Notice Program

- **Direct notice** — mail and/or email to identifiable class members
- **Publication notice** — media outlets, internet, social media if appropriate
- **Content** — plain-language summary: terms, rights, deadlines, claim/opt-out/objection procedures
- **Timeline** — notice within __ days of preliminary approval
- **Due process** — must satisfy FRCP 23(c)(2)(B) or state equivalent

### Article VIII — Opt-Out & Objection Procedures

| Procedure | Requirements |
|---|---|
| Opt-out | Written request; name, address, signature; postmarked by deadline |
| Opt-out effect | Not bound by settlement or release; forfeits benefits |
| Objections | Written; filed with court and served on counsel; must state basis |
| Threshold walkaway | If opt-outs exceed __% of class, defendant may terminate |

### Article IX — Court Approval & Contingencies

1. **Preliminary approval** — motion within __ days of execution
2. **Fairness hearing** — scheduled per court's order
3. **Final approval** — entry of final judgment and order
4. **Termination rights** — either party may withdraw if court denies approval or materially modifies terms
5. **Effect of termination** — revert to pre-settlement posture; inadmissible under FRE 408

### Article X — General Provisions

- No admission of liability or wrongdoing
- Integration clause — supersedes all prior negotiations and agreements
- Amendments — material changes require court approval
- Governing law and jurisdiction
- Severability
- Counterparts and electronic signatures
- Non-disparagement (if negotiated)
- Confidentiality of negotiation communications

### Signature Blocks & Exhibits

**Signatures:** all named defendants, class representatives, and counsel of record.

**Exhibits:**
- A: Proposed Class Notice (long form and summary)
- B: Claim Form
- C: Proposed Preliminary Approval Order
- D: Proposed Final Approval Order and Judgment

## Guidelines

- Every provision must memorialize the agreement AND satisfy the court's duty to protect absent class members
- Release language: broad enough for defendant finality, not so overbroad the court rejects it
- Allocation methodology must be objectively defensible — courts scrutinize arbitrary distributions
- Notice plan must satisfy constitutional due process; err toward over-inclusion
- Non-reversionary fund strongly preferred — courts disfavor reversionary settlements
- Flag jurisdiction-specific requirements (e.g., state consumer protection notice rules, unknown claims waivers)
- All dollar amounts and deadlines must come from user-provided materials — never fabricate figures
- Mark unverified statutory citations with [VERIFY]