A Northern District of California judge refused to preliminarily approve a class settlement of Uber customers who used its “Rideshare Services” in which Uber would have paid class members $28.5 million. The court was concerned about several things.

First, the settlement divided the settlement fund among class members on a per capita basis, which resulted in the compensation of some members who weren’t injured at the expense of persons who had been injured.

Second, the settlement divided the available funds among all class members equally, regardless of the number of Safe Ride Fees each class member paid. It thus failed to allocate compensation among class members on a fair basis.

Third, the settlement fell below the range of possible approval because the amount paid to the class was disproportionate to the total amount in profits Uber made on the practice.

This case illustrates the fact that federal courts are giving class action settlements greater scrutiny. This trend will only accelerate as revisions to Fed. R. Civ. P. 23 tightening settlement criteria take effect.

Philiben v. Uber Technologies, Inc., 2016 WL 4537912 (N.D. Cal. Aug. 30, 2016).