On June 3, 2021, the Eleventh Circuit Court of Appeals affirmed, with one caveat, the Northern District of Georgia’s approval of the settlement of the consolidated class actions against Equifax Inc. and its affiliates arising from the 2017 data privacy breach. The district court described the parties’ settlement as “the largest and most comprehensive recovery in a data breach case in U.S. history by several orders of magnitude.” Notably, the Federal Trade Commission, the Consumer Financial Protection Bureau, and the attorneys general for 48 states, the District of Columbia, and Puerto Rico all supported the settlement.
The one caveat the panel announced was that the incentive awards for the class representatives that were approved by the district court ran afoul of Johnson v. NPAS Solutions LLC. The panel otherwise affirmed in all other respects and remanded solely for the incentive awards to be vacated.
The Eleventh Circuit’s decision resolved five consolidated appeals by six objectors. The various objectors raised a slew of issues. Among them, the objectors challenged Article III jurisdiction as wells as the district court’s decisions approving the class action settlement, certifying the settlement class, and awarding attorneys’ fees and expenses. The panel rejected and dispensed with all of these arguments in turn. The affirmance and the panel’s resolution of those issues have been widely reported. Less widely reported, however, are the panel’s interesting discussions of the objectors’ challenges to the requirements the district court imposed on them for filing objections, the district court’s process for adopting its final order, and the appeal bonds imposed by the district court.
Requirements for Objections
Objector Davis challenged certain administrative requirements the district court placed on class members who wished to object:
- Each objection had to include the objector’s name and address; the objector’s personal signature; the grounds for the objection; previous objections in recent class actions; and dates on which the objector was available to be deposed.
- In addition, if the objector had counsel who intended to speak at the fairness hearing, the objection needed to include the legal and factual basis for the objection and the evidence to be offered at the hearing.
- And, if the objector had counsel who sought compensation from anyone other than the objector, the objection needed to include counsel’s previous objections in recent class actions, counsel’s experience in class action litigation, and information on the fees sought.
Objector Davis argued that these requirements deterred objections and limited the ability of objectors to be heard. The panel rejected these contentions and concluded that Objector Davis failed to establish an abuse of discretion. Specifically, the panel explained as follows:
The District Court explicitly imposed the requirements outlined here, not to deter objections or for some arbitrary purpose, but for the express purpose of avoiding a “chaotic process” in evaluating the objections. The District Court said it found these requirements help “expose objections that are lawyer-driven and filed with ulterior motives.” The District Court was well within its broad discretion to impose the requirements for these stated purposes.
The panel then turned to an insightful discussion of so-called ghostwritten orders. Because the proposed final order submitted by plaintiffs’ class counsel was not included in the record on appeal, the panel assumed that the district court adopted the proposed order in whole without changes: “The Objectors ask us to assume that the District Court adopted the proposed order in full, and Plaintiffs and Equifax don’t ask us to do otherwise. For the purposes of our review, we therefore assume the District Court adopted the proposed order verbatim.” Objectors Frank and West asserted that the district court erred in adopting a proposed order “ghostwritten” by plaintiffs’ counsel.
The panel acknowledged that the Eleventh Circuit has “repeatedly condemned the ghostwriting of judicial orders by litigants.” “When such a practice is permitted, the drafting party has an ‘overwhelming’ ‘temptation to overreach and exaggerate.’” The panel likewise acknowledged that the “quality of judicial decisionmaking suffers when a judge delegates the drafting of orders to a party” and that “the writing process requires a judge to wrestle with the difficult issues before him and thereby leads to stronger, sounder judicial rulings.”
Notwithstanding, the Eleventh Circuit has not adopted a per se rule that disallows this practice. In this case, the panel determined that “the process by which the District Court adopted the proposed order was not fundamentally unfair.” It explained:
Mr. Frank and Mr. West both had ample opportunity to present their arguments. Both lodged detailed written objections to the settlement agreement. Both appeared through counsel at the final hearing and presented arguments. And contrary to their assertions, they did have an opportunity to respond to the order. After the District Court adopted the proposed order, Mr. West moved to amend it. And it’s not as if these opportunities to present their arguments were hollow procedures; the District Court heard from Mr. Frank and Mr. West at the fairness hearing, considered their written objections, and rejected their objections on the merits. Ultimately, the District Court granted Mr. West’s motion to amend the order over Plaintiffs’ objections and issued a revised order based on West’s arguments.
Ultimately, the panel emphasized that the district court “reached a firm decision before ever directing Plaintiffs’ counsel to draft a proposed order” and “instructed that the order reach a particular result and discuss specific points.”
Under Federal Rule of Appellate Procedure 7, the district court imposed appeal bonds of $2,000 on each objector. Rule 7 states that, “[i]n a civil case, the district court may require an appellant to file a bond or provide other security in any form and amount necessary to ensure payment of costs on appeal.”
Objectors Cochran and Frank asserted that the district court erred in requiring appeal bonds. The panel rejected this assertion. It pointed out that the “[t]he plain text of Rule 7 is clear” and “says a district court may impose an appeal bond ‘in any form and amount necessary to ensure payment of costs on appeal.’” Although it acknowledged, without deciding, that some of the reasons given by the district court for imposing the appeal bond might be irrelevant under Rule 7, the district court did make the finding that matters:
Although the District Court considered other factors that may not be relevant, we need not ultimately decide this issue of relevance under Rule 7 because the record indicates the District Court independently imposed the appeal bonds based on a proper factor. Specifically, the District Court found that the “substantial risk” of nonpayment “warrant[ed] an appeal bond.” The District Court did not therefore abuse its discretion when it imposed the appeal bonds based on its finding that there was a “substantial risk that the costs of appeal will not be paid unless a bond is required.”
In re Equifax Inc. Customer Data Security Breach Litigation, No. 20-10249 (11th Cir. June 3, 2021).