Check Amounts Can Differ Substantially from Class Action Settlements Per Claim

The reported value per claim in a class action settlement can differ significantly from the actual check a class member receives.  Both StarKist and Trader Joe’s have faced class action lawsuits involving damages for allegedly under-filled cans of tuna.  Both defendants settled for cash amounts in the range of $25-29 per claim (although StarKist also offered $50 product vouchers in the alternative).

Although a more thorough discussion is available in this related article on class action settlement damage calculations, a summary provided by counsel in the StarKist matter illustrates how the $12 million settlement ($4 million in vouchers and $8 million in cash) actually translated into payouts of much smaller amounts than the settlement value per claim:

The value reduction occurred in part because of the popularity of the settlement with class members, who filed claims in record amounts and thereby diluted the Settlement Fund pot to be distributed.  However, even at the reduced payout, Plaintiffs’ counsel described the amounts as “an excellent recovery that will fully compensate most Class Members for 100% of their alleged losses, and possibly more”.

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