The Third Circuit's recent decision vacating Toys R Us's $35 million antitrust class action settlement indicates that judges face greater pressure to make sure settlements actually benefit class members.

The ruling involved the allocation of the settlement, which awarded $14 million in costs and fees to plaintiff's attorneys. Only $3 million was expected to go to class members while the remaining $18.5 million would end up going to charity through a so-called cy pres distribution.

Because the decision indicates that class action settlements could be in for closer scrutiny, parties may need to calculate the expected claims rate more carefully, said Ballard Spahr partner Neal Walters.

"They have to be more cautious and pay greater attention to this issue," Mr. Walters said.


Related Practices

Commercial Litigation
Consumer Class Action Litigation