Motion for Preliminary Settlement Approval in New York

What Is a Motion for Preliminary Settlement Approval?

Background

CPLR § 908 requires judicial approval for any compromise of claims brought on a class basis. This approval process includes three steps:

Preliminary approval of the proposed settlement after submission to the court of a written motion for preliminary approval;
Dissemination of notice of settlement to all class members; and
A final settlement approval hearing at which class members may be heard regarding the settlement and argument concerning the fairness, adequacy, and reasonableness of the settlement may be presented.

(Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 13.1 (5th ed.); see, e.g., Lopez v. The Dinex Grp., LLC, No. 155706/2014, 2015 N.Y. Slip Op. 31074, at *2 [Sup. Ct. N.Y. Cnty. 2015).]

The Court’s Decision

At this first step in the settlement approval process, the parties “submit the proposed terms of settlement and the judge makes a preliminary fairness evaluation.” (Manual for Complex Litigation (4th ed.) § 21.632 at 320 (2004).) The court need only find that there is “probable cause to submit the [settlement] to class members and hold a full-scale hearing as to its fairness.” (In re Traffic Exec. Ass’n-E. R.Rs., 627 F.2d 631, 634 (2d Cir. 1980); see Newberg, § 13:10 (“[I]f a court’s preliminary evaluation of the proposed settlement showed that it [is neither illegal nor collusive and is within the range of possible approval], the court would direct that notice of the settlement be given to the class members[.]”).)

CPLR § 908 specifies that the court should approve any proposed “compromise” of a class action lawsuit. New York courts regularly refer to the federal standards in making this determination, in recognition that the two statutory schemes are similar. (Fiala v. Metro. Life Ins. Co., 899 N.Y.S.2d 531, 537-38 [Sup. Ct. 2010] (collecting cases).) Courts examine “the fairness of the settlement, its adequacy, its reasonableness and the best interests of the class members.” (Id. at 537 (citing Klein v. Robert’s Am. Gourmet Food, Inc., 28 A.D.3d 63, 73 [N.Y. App. Div. 2d Dept 2006]); see also Rosenfeld v. Bear Stearns & Co., 237 A.D.2d 199 [N.Y. App. Div. 1st Dept 1997]; Joel A. v. Giuliani, 218 F.3d 132, 138 (2d Cir. 2000).)

Further, in evaluating a class action settlement, courts generally consider the nine factors set forth in City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974), abrogated on other grounds by Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) ("Grinnell"). The Grinnell factors are (1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation. (Grinnell, 495 F.2d at 463.)

Preliminary approval is subject to a less rigorous standard than final approval. Preliminary approval will be granted “[w]here the proposed settlement appears to be the product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not improperly grant preferential treatment to class representatives or segments of the class and falls within the range of possible approval[.]” (In re Initial Pub. Offering Sec. Litig., 226 F.R.D 186, 191 (S.D.N.Y. 2005) (internal quotation marks omitted).)

Documents for Motion for Preliminary Settlement Approval in New York

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Emily Cosette Divito v. City Of New York, New York City Police Department, Peter Ferraro document preview

STATEMENT OF AUTHORIZATION FOR ELECTRONIC FILING

2 pages

INDEX NO. 150951/2024 NYSCEF DOC. NO. 4 RECEIVED NYSCEF 05/16/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF _N STATEMENT OF AUTHORIZATION FOR L (Managing Attorney Authorizing Filing Agent Enti…

Case Name Emily Cosette Divito v. City Of New York, New York City Police Department,…

Motion for Preliminary Settlement Approval in New York

What Is a Motion for Preliminary Settlement Approval?

Background

The Court’s Decision

Documents for Motion for Preliminary Settlement Approval in New York

Related Legal Topics for Motion for Preliminary Settlement Approval in New York

Useful Examples of Class Action for Motion for Preliminary Settlement Approval and Related Documents Filed in Court Cases/Dockets