§1712 Coupon settlements

Summary

When a class-action settlement gives people coupons, any part of the lawyers’ fee tied to those coupons must be based on how much the redeemed coupons are actually worth to people who use them. If coupon value is not used to set fees, the lawyers’ fee must be based on the reasonable time they spent working on the case. The court must approve time-based fees and can include payment for getting other court-ordered relief, like an injunction. If the deal gives both coupons and other relief, the fee tied to coupons follows the first rule and the rest follows the time-based rule. The court may hear expert evidence about the real value of redeemed coupons. The court can only approve a coupon settlement after a hearing and a written finding that it is fair, reasonable, and adequate, and it may require some unclaimed coupon value be given to agreed charities or government groups; those amounts cannot be used to calculate lawyers’ fees.