102 Iowa L. Rev. 1335 (2017)

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Abstract

The class action device is an important tool for injured consumers. It allows hundreds of consumers to aggregate their injuries and enables them to litigate their claims. However, the system is vulnerable to abuse. One form of alleged abuse is the class action coupon settlement. In many coupon settlements, the members of the class receive valueless coupons, while the class’s attorney is paid millions. Congress sought to eliminate this practice by enacting section 1712 of the Class Actions Fairness Act (“CAFA”), which attempts to regulate how attorneys’ fees are calculated in a coupon settlement. Unfortunately, section 1712 was poorly drafted, which has led to opposing interpretations from the Seventh and Ninth Circuits. This Note argues that the Seventh Circuit correctly interpreted the current version of section 1712 of CAFA, but that Congress should rewrite section 1712 in accordance with the Ninth Circuit’s interpretation, to better protect future class members in coupon settlements.