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Third Circuit Sends Back Sprint Class Action Settlement

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By Tanya Roth, Esq. on July 03, 2012 1:02 PM

The entire class needs to be properly protected for valid class certification. For starters, class representatives need to have the interests of the whole class in mind. Proper notice to potential class members is also crucial to a valid class action case.

A three-judge panel of the Third Circuit Court of Appeals vacated a settlement between Sprint and a class of its customers last week, claiming that the $17.5 million settlement didn't adequately protect absent class members.

The dispute arose over flat rate early termination penalties in Sprint, (now owned by AT&T) cellular phone plans.

A district court in New Jersey certified the class, over objections lodged by several class members.

The objectors argued that many class members -- potentially millions -- were never notified of the class action lawsuit, and that Sprint failed to conduct a search of its records to identify potential class members. Under Rule 23(c)(2)(B), individual notice is required for all class members who can be identified through a reasonable effort.

There was also the question of whether the class representatives could adequately represent all class members. Rule 23(1)(4) states that the representatives must fairly and adequately protect the interests of the class. The objectors argued that the class representatives were not current subscribers at the time that the class settlement was reached.

The Third Circuit Court of Appeals didn't address the issue of class representatives. Nevertheless, the court stated that the case would be remanded on other grounds, and urged the district court to evaluate the issue of class representatives as it was a significant concern.

There is no news yet on what Sprint plans to do regarding the Third Circuit Court's decision.

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