--- name: class-action-settlement title: Class Action Settlement Agreement description: Drafts class action settlement agreements for court approval under FRCP 23(e), covering settlement fund terms, class definitions, release provisions, allocation plans, claims administration, notice programs, opt-out procedures, and fee structures. Use when drafting class action settlements, settlement agreements requiring judicial approval, or FRCP 23(e) fairness submissions. author: CaseMark author_url: https://github.com/CaseMark/skills/tree/main/skills/legal/class-action-settlement license: Apache-2.0 version: 0.1.0 execution_mode: open jurisdiction: us practice: litigation language: en tags: [agreement, drafting] --- # Class Action Settlement Agreement Drafts a court-approvable class action settlement balancing class member interests, defendant finality, and FRCP 23(e) fairness standards. ## Prerequisites 1. **Case materials** — complaint, class certification order, case number, jurisdictional details 2. **Term sheet or negotiation record** — agreed monetary amounts, allocation methodology, key terms 3. **Class definition** — certified or proposed class and any subclasses 4. **Damages analysis** — theories, calculations, aggregate and per-member ranges 5. **Party information** — all named parties, class representatives, counsel of record ## Output Structure Draft a formal settlement agreement with the following articles in order. ### Article I — Recitals | Element | Content | |---|---| | Litigation background | Case caption, court, claims asserted, procedural history | | Certification status | Class cert order date and scope, or proposed settlement class | | Settlement purpose | Compromise to avoid risk/expense; no admission of liability | | Negotiation history | Arms-length negotiation, mediator involvement if any | ### Article II — Definitions Define all capitalized terms at the outset. At minimum: - Settlement Fund, Net Settlement Fund, Settlement Class, Class Period - Released Claims, Released Parties, Effective Date - Claims Administrator, Class Counsel, Class Representatives - Claim Form, Opt-Out Deadline, Objection Deadline ### Article III — Settlement Fund & Payment - **Total amount** — non-reversionary common fund - **Payment schedule** — deadlines, escrow/QSF account details - **Fee treatment** — fund inclusive or exclusive of fees/costs - **Tax provisions** — QSF treatment under IRC § 468B; each party bears own tax liability - **Investment** — permitted investment pending distribution ### Article IV — Class Definition & Release - **Class definition** — mirror or refine certification order language - **Release scope** — all asserted and unasserted claims arising from same facts/transactions - **Unknown claims waiver** — Cal. Civ. Code § 1542 waiver or jurisdiction equivalent if applicable [VERIFY] - **Binding effect** — binds all class members except valid opt-outs - **Released parties** — entity, officers, affiliates, insurers ### Article V — Allocation Plan & Claims Process | Component | Requirements | |---|---| | Allocation formula | Objective methodology (pro rata, tiered by damages, claim strength) | | Claim form | Required fields, supporting documentation, submission methods | | Filing deadline | Minimum 60–90 days post-notice | | Validation | Administrator authority to accept/reject; deficiency cure period | | Dispute resolution | Process for contested claims | | Unclaimed funds | Cy pres distribution or pro rata reallocation — specify which | ### Article VI — Fees, Costs & Incentive Awards - **Attorney's fees** — maximum percentage or dollar cap; methodology (percentage-of-fund or lodestar cross-check) - **Litigation costs** — reimbursement cap, subject to court approval - **Incentive awards** — per-representative amount, subject to court approval - All payments from Settlement Fund unless otherwise specified ### Article VII — Notice Program - **Direct notice** — mail and/or email to identifiable class members - **Publication notice** — media outlets, internet, social media if appropriate - **Content** — plain-language summary: terms, rights, deadlines, claim/opt-out/objection procedures - **Timeline** — notice within __ days of preliminary approval - **Due process** — must satisfy FRCP 23(c)(2)(B) or state equivalent ### Article VIII — Opt-Out & Objection Procedures | Procedure | Requirements | |---|---| | Opt-out | Written request; name, address, signature; postmarked by deadline | | Opt-out effect | Not bound by settlement or release; forfeits benefits | | Objections | Written; filed with court and served on counsel; must state basis | | Threshold walkaway | If opt-outs exceed __% of class, defendant may terminate | ### Article IX — Court Approval & Contingencies 1. **Preliminary approval** — motion within __ days of execution 2. **Fairness hearing** — scheduled per court's order 3. **Final approval** — entry of final judgment and order 4. **Termination rights** — either party may withdraw if court denies approval or materially modifies terms 5. **Effect of termination** — revert to pre-settlement posture; inadmissible under FRE 408 ### Article X — General Provisions - No admission of liability or wrongdoing - Integration clause — supersedes all prior negotiations and agreements - Amendments — material changes require court approval - Governing law and jurisdiction - Severability - Counterparts and electronic signatures - Non-disparagement (if negotiated) - Confidentiality of negotiation communications ### Signature Blocks & Exhibits **Signatures:** all named defendants, class representatives, and counsel of record. **Exhibits:** - A: Proposed Class Notice (long form and summary) - B: Claim Form - C: Proposed Preliminary Approval Order - D: Proposed Final Approval Order and Judgment ## Guidelines - Every provision must memorialize the agreement AND satisfy the court's duty to protect absent class members - Release language: broad enough for defendant finality, not so overbroad the court rejects it - Allocation methodology must be objectively defensible — courts scrutinize arbitrary distributions - Notice plan must satisfy constitutional due process; err toward over-inclusion - Non-reversionary fund strongly preferred — courts disfavor reversionary settlements - Flag jurisdiction-specific requirements (e.g., state consumer protection notice rules, unknown claims waivers) - All dollar amounts and deadlines must come from user-provided materials — never fabricate figures - Mark unverified statutory citations with [VERIFY]