Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38398 Filed 02/17/21 Page 1 of 9
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`EXHIBIT 3
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38399 Filed 02/17/21 Page 2 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
`
`724 F.3d 713
`United States Court of Appeals,
`Sixth Circuit.
`
`In re DRY MAX PAMPERS LITIGATION.
`Daniel Greenberg, Objector–Appellant,
`Angela Clark, et al., Plaintiffs–Appellees,
`v.
`Procter & Gamble Company; Procter & Gamble
`Paper Products Company; Procter & Gamble
`Distributing LLC, Defendants–Appellees.
`
`No. 11–4156.
`|
`Argued: Oct. 4, 2012.
`|
`Decided and Filed: Aug. 2, 2013.
`|
`Rehearing and Rehearing En
`Banc Denied Oct. 2, 2013. *
`
`Synopsis
`Background: Following class certification and settlement
`of consumers' class action against diaper manufacturer, and
`approval by the United States District Court for the Southern
`District of Ohio, Timothy S. Black, J., objector appealed.
`
`The Court of Appeals, Kethledge, Circuit Judge, held that
`settlement gave preferential treatment to class counsel while
`only perfunctory relief to unnamed class members.
`
`Reversed.
`
`Cole, Circuit Judge, dissented and filed opinion.
`
`Procedural Posture(s): On Appeal.
`
`Attorneys and Law Firms
`
`Lynn Lincoln Sarko, Gretchen Freeman Cappio, Harry
`Williams IV, Keller Rohrback L.L.P., Seattle, Washington,
`for Plaintiffs–Appellees. D. Jeffrey Ireland, Brian D. Wright,
`Faruki Ireland & Cox P.L.L., Dayton, Ohio, for Defendants–
`Appellees.
`
`Before: COLE and KETHLEDGE, Circuit Judges; and
`THAPAR, District Judge. **
`
`KETHLEDGE, J., delivered the opinion of the court, in which
`THAPAR, D. J., joined. COLE, J. (pp. 723–24), delivered a
`separate dissenting opinion.
`
`OPINION
`
`KETHLEDGE, Circuit Judge.
`
`Class-action settlements are different from other settlements.
`The parties to an ordinary settlement bargain away only their
`own rights—which is why ordinary settlements do not require
`court approval. In contrast, class-action settlements affect not
`only the interests of the parties and counsel who negotiate
`them, but also the interests of unnamed class members who
`by definition are not present during the negotiations. And thus
`there is always the danger that the parties and counsel will
`bargain away the interests of unnamed class members in order
`to maximize their own.
`
`This case illustrates these dangers. The class is made up of
`consumers who purchased certain kinds of Pampers diapers
`between August 2008 and October 2011. The parties and their
`counsel negotiated a settlement that awards each of the named
`plaintiffs $1000 per “affected child,” awards class counsel
`$2.73 million, and provides the unnamed class members with
`nothing but nearly worthless injunctive relief. The district
`court found that the settlement was fair and certified the
`settlement class. We disagree on both points, and reverse.
`
`I.
`
`*715 ARGUED: Adam E. Schulman, Center for Class
`Action Fairness LLC, Washington, D.C., for Appellant. Lynn
`Lincoln Sarko, Keller Rohrback L.L.P., Seattle, Washington,
`for Plaintiffs–Appellees. D. Jeffrey Ireland, Faruki Ireland
`& Cox P.L.L., Dayton, Ohio, for Defendants–Appellees. ON
`BRIEF: Adam E. Schulman, Theodore H. Frank, Center for
`Class Action Fairness LLC, Washington, D.C., for Appellant.
`
`The defendant Procter & Gamble Company (“P & G”)
`manufactures Pampers brand diapers. In March 2010, P
`& G began marketing Pampers with so-called “Dry Max
`technology.” Two months later, the Consumer Product Safety
`Commission began investigating whether Dry Max diapers
`tend to cause severe diaper rash. The Clark lawsuit and
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38400 Filed 02/17/21 Page 3 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
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`11 others were filed very soon thereafter. The district court
`consolidated all 12 cases.
`
`In August 2010, the Commission—along with a Canadian
`agency, Health Canada—released
`the
`results of
`its
`investigation. Based upon a review of 4,700 incident reports,
`the Commission found no connection *716 between the use
`of Dry Max diapers and diaper rash.
`
`P & G then filed a motion to dismiss. Before Plaintiffs
`responded to the motion, however—and indeed before any
`formal discovery in the case—the parties began discussing
`settlement. By March 2011 they had reached a deal. Its
`essential terms were as follows: Although the plaintiffs
`had sought class certification under Federal Rule of Civil
`Procedure 23(b)(1) and (b)(3)—under which class members
`are free to opt out of the class, and thus out of the deal
`negotiated for them by class counsel—the parties agreed to
`seek certification of a class under Rule 23(b)(2), under which
`absent class members cannot opt out of the deal. The class
`was defined as follows:
`
`All persons in the United States and
`its possessions and territories, who
`purchased or acquired (including by
`gift) Pampers brand diapers containing
`“Dry Max Technology” from August
`2008 through Final Judgment. All
`federal judges to whom this case
`is assigned and members of their
`families within
`the
`first degree
`of consanguinity, and officers and
`directors of Procter & Gamble, are
`excluded from the class definition.
`
`P & G agreed to reinstate, for one year, a refund program
`that P & G had already made available to its customers
`from July 2010 to December 2010. The program limits
`refunds to one box per household, and requires consumers
`to provide an original receipt and UPC code clipped from
`a Pampers box. P & G also agreed, for a period of two
`years, to add to its Pampers box-label a single sentence
`suggesting that consumers “consult Pampers.com or call 1–
`800–Pampers” for “more information on common diapering
`questions such as choosing the right Pampers product for
`your baby, preventing diaper leaks, diaper rash, and potty
`training[.]” P & G similarly agreed, for a period of two years,
`
`to add to the Pampers website some rudimentary information
`about diaper rash (e.g., “[d]iaper rash is usually easily treated
`and improves within a few days after starting treatment”)
`and a suggestion to “[s]ee your child's doctor” if certain
`severe symptoms develop (e.g., “pus or weeping discharge”),
`along with two links to other websites. P & G also agreed to
`contribute $300,000 to a pediatric resident training program
`—the recipient program is not identified in the agreement—
`and $100,000 to the American Academy of Pediatrics to fund
`a program “in the area of skin health.”
`
`The agreement treats named plaintiffs differently than other
`class members. Named plaintiffs release all of their Pampers-
`related claims against P & G and receive an “award” of $1000
`“per affected child.” (Thus, for example, a named plaintiff
`with two “affected children” would receive $2000.) Unnamed
`class members do not receive any award, and benefit only
`from the labeling and website changes and the one-box refund
`program (to the extent they have not done so already and have
`their original receipts and UPC codes). Unnamed plaintiffs
`are also forced to release their “equitable” claims against
`P & G, and are “permanently barred and enjoined from
`seeking to use the class action procedural device in any future
`lawsuit against” P & G. But in theory, at least, unnamed
`class members retain the right to file individual lawsuits for
`“personal injury” or “actual damages” resulting from their
`children's use of Dry Max diapers.
`
`Meanwhile, the agreement provides that Plaintiffs' class
`counsel will receive a fee award of $2.73 million.
`
`The parties thereafter moved for the district court to
`certify the class and to approve the settlement agreement.
`Daniel Greenberg and two other class members objected.
`Greenberg's objections ran *717 33 pages and were
`numerous, detailed, and substantive. Among other objections,
`Greenberg argued that certification of the putative class under
`Rule 23(b)(2) would be improper because the plaintiffs'
`claims are predominantly monetary and because the class
`members have no ongoing relationship with P & G; that
`the agreement affords inadequate notice to unnamed class
`members; that the agreement violates the due-process rights
`of unnamed class members by depriving them of their
`rights to seek class-wide monetary relief while denying
`them the ability to opt-out of the settlement class; that the
`class representatives and class counsel had not adequately
`represented the interests of unnamed class members within
`the meaning of Rule 23(a)(4); and that the settlement was
`unfair to unnamed class members, in part because of the size
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38401 Filed 02/17/21 Page 4 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
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`of the $2.73 million fee award in comparison to the utility
`of the injunctive relief (i.e., the one-box refund program and
`labeling and website changes) to unnamed class members.
`
`On September 28, 2011, the district court held a fairness
`hearing in which it considered whether to certify the class,
`whether the settlement agreement was fair, whether to
`approve the request of class counsel for $2.73 million in
`fees, and whether to approve the “incentive awards” (of
`$1000 per child) for each named plaintiff. The hearing lasted
`less than an hour. Counsel for the plaintiffs and for P & G
`presented argument with little interruption from the district
`court. Counsel for Greenberg likewise presented argument
`with virtually no questions or comment from the district
`court. Near the end of the hearing, the court stated that
`it would certify the class, that it would approve the $2.73
`million fee award and the incentive awards, and that the
`settlement was fair. The court ventured no response at all
`to any of Greenberg's objections, other than to say that they
`had been “rebutted thoroughly by the parties' briefs.” Hearing
`Tr. 34. The court did state, however, that it would “put on a
`significant written final approval order and final judgment[.]”
`Id. at 35.
`
`The district court entered its “Final Approval Order and Final
`Judgment” later that afternoon. With the exception of a few
`typographical changes, the order was a verbatim copy of a
`proposed order that the parties had submitted to the court
`before the hearing. The order was conclusory, for the most
`part merely reciting the requirements of Rule 23 in stating that
`they were met. About Greenberg's objections, the order had
`nothing to say.
`
`Greenberg's appeal followed.
`
`II.
`
` We review the district court's certification of the class and
`approval of the settlement for an abuse of discretion. Int'l
`Union, UAW v. Gen. Motors Corp., 497 F.3d 615, 625 (6th
`Cir.2007).
`
`A.
`
` In class-action settlements, the adversarial process—or what
`the parties here refer to as their “hard-fought” negotiations
`—extends only to the amount the defendant will pay, not the
`
`manner in which that amount is allocated between the class
`representatives, class counsel, and unnamed class members.
`For “the economic reality [is] that a settling defendant is
`concerned only with its total liability[,]” Strong v. BellSouth
`Telecomms., Inc., 137 F.3d 844, 849 (5th Cir.1998); and thus
`a settlement's “allocation between the class payment and the
`attorneys' fees is of little or no interest to the defense.” In re
`Gen. Motors Corp. Pick–Up Truck Fuel Tank Prods. Liab.
`Litig. (“Gen. Motors Pick–Up Litig.”), 55 F.3d 768, 820 (3d
`Cir.1995) (internal quotation marks omitted). Hence-unlike
`in virtually every other *718 kind of case—in class-action
`settlements the district court cannot rely on the adversarial
`process to protect the interests of the persons most affected by
`the litigation—namely, the class. Instead, the law relies upon
`the “fiduciary obligation[s]” of the class representatives and,
`especially, class counsel, to protect those interests. Creative
`Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d
`913, 917 (7th Cir.2011). And that means the courts must
`carefully scrutinize whether those fiduciary obligations have
`been met.
`
` “[I]n evaluating the fairness of a settlement,” therefore, we
`look in part “to whether the settlement gives preferential
`treatment to the named plaintiffs while only perfunctory relief
`to unnamed class members.” Vassalle v. Midland Funding
`LLC, 708 F.3d 747, 755 (6th Cir.2013) (internal quotation
`marks omitted). “[S]uch inequities in treatment make a
`settlement unfair.” Id. The same is true of a settlement
`that gives preferential treatment to class counsel; for class
`counsel are no more entitled to disregard their “fiduciary
`responsibilities” than class representatives are. Gen. Motors
`Pick–Up Litig., 55 F.3d at 788. Most class counsel are
`honorable; but “settlement classes create especially lucrative
`opportunities for putative class attorneys to generate fees
`for themselves without any effective monitoring by class
`members who have not yet been apprised of the pendency
`of the action.” Id. “[T]he danger being that the lawyers
`might urge a class settlement at a low figure or on a less-
`than-optimal basis in exchange for red-carpet treatment on
`fees.” Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518,
`524 (1st Cir.1991); see also, e.g., Creative Montessori, 662
`F.3d at 918 (“We and other courts have often remarked the
`incentive of class counsel” to “agree[ ] with the defendant
`to recommend that the judge approve a settlement involving
`a meager recovery for the class but generous compensation
`for the lawyers”). Thus, if the “fees are unreasonably high,
`the likelihood is that the defendant obtained an economically
`beneficial concession with regard to the merits provisions, in
`the form of lower monetary payments to class members or
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38402 Filed 02/17/21 Page 5 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
`
`less injunctive relief for the class than could otherwise have
`[been] obtained.” Staton v. Boeing Co., 327 F.3d 938, 964 (9th
`Cir.2003). Hence the “courts must be particularly vigilant” for
`“subtle signs that class counsel have allowed pursuit of their
`own self-interests and that of certain class members to infect
`the negotiations.” Dennis v. Kellogg Co., 697 F.3d 858, 864
`(9th Cir.2012) (internal quotation marks omitted).
`
` The signs are not particularly subtle here. On the one hand,
`the settlement agreement awards class counsel a fee of $2.73
`million—this, in a case where counsel did not take a single
`deposition, serve a single request for written discovery, or
`even file a response to P & G's motion to dismiss. On the
`other hand, the agreement provides unnamed class members
`a medley of injunctive relief. We must scrutinize that relief
`to determine whether the fee award amounts to “preferential
`treatment” in comparison to it.
`
`We begin with the one-box refund program. Consumers
`cannot benefit from the program unless they have retained
`their original receipt and Pampers-box UPC code, in some
`instances for diapers purchased as long ago as August 2008.
`Greenberg sensibly asks who does this sort of thing. We
`have no answer. Neither do the parties—or more precisely
`they have offered none. The omission is conspicuous, for
`the refund program here is merely a rerun of the very same
`program that P & G had already offered to its customers from
`July 2010 to December 2010. P & G surely has data as to the
`numbers of consumers who obtained refunds during that time;
`P & G's counsel *719 conceded as much at oral argument on
`appeal. And yet—even after Greenberg called out the parties
`on this very point in his objections to the district court—P &
`G chose not to provide that data in arguing that the settlement
`is fair.
`
`“The burden of proving the fairness of the settlement is on
`the proponents.” 4 Newberg on Class Actions § 11:42 (4th
`ed.); see also, e.g., Ault v. Walt Disney World Co., 692 F.3d
`1212, 1216 (11th Cir.2012); In re Katrina Canal Breaches
`Litig., 628 F.3d 185, 196 (5th Cir.2010). Thus, to the extent
`the parties here argue that the settlement was fair because
`the refund program has actual value for consumers, it was
`the parties' burden to prove the fact, rather than Greenberg's
`burden to disprove it. The parties did not carry that burden—
`which again (to his credit) P & G's counsel conceded at oral
`argument on appeal.
`
`There is another reason to think the reinstated refund program
`brings little value to unnamed class members: most of them
`
`have already had access to it. The class includes consumers
`who bought Dry Max Pampers between August 2008 and
`September 28, 2011. P & G's initial refund program ended
`in December 2010. Thus, before this settlement agreement
`was even reached, consumers who purchased Pampers during
`a 29–month period—of the 38 months encompassed by
`the class definition—had already had an opportunity to
`obtain their single-box refund, without the assistance of
`class counsel and without assigning away important rights as
`captive members of a settlement class. That is all the more
`reason to doubt the parties' assertions of value. Cf. In re Aqua
`Dots Prods. Liab. Litig., 654 F.3d 748, 752 (7th Cir.2011)
`(“A representative who proposes that high transaction costs
`(notice and attorneys' fees) be incurred at the class members'
`expense to obtain a refund that already is on offer is not
`adequately protecting the class members' interests”).
`
`The value of the one-box refund program to unnamed class
`members is dubious on its face. The parties did not carry
`their burden to demonstrate otherwise, or indeed even try. The
`district court, for its part, did not even mention the refund
`program during the fairness hearing or in its order approving
`the settlement. Thus, for purposes of this case, the value of
`the refund program to unnamed class members is negligible.
`
`That leaves the labeling and website changes. The issue,
`again, is whether the value of these changes is so great,
`for unnamed class members, as to render counsel's $2.73
`million fee reasonable rather than preferential in light of
`it. Here is the Pampers-box label change, in its entirety:
`“For more information on common diapering questions
`such as choosing the right Pampers product for your baby,
`preventing diaper leaks, diaper rash, and potty training,
`please consult Pampers. com or call 1–800–Pampers.” That
`is all. Greenberg argues that this language—to the extent
`it amounts to anything—amounts to little more than an
`advertisement for Pampers. We agree.
`
`The parties do not offer any specific argument to the contrary,
`other than to say that the labeling change directs consumers
`to the Pampers.com website, where, it appears, they think the
`real value lies. Here is the website change in its entirety:
`
`Diaper rash is usually easily treated and improves within
`a few days after starting home treatment. If your baby's
`skin doesn't improve after a few days of home treatment
`with over-the-counter ointment and more frequent diaper
`changes, then talk to your doctor.
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38403 Filed 02/17/21 Page 6 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
`
`Sometimes, diaper rash leads to secondary infections that
`may require prescription *720 medications. Have your
`child examined if the rash is severe or the rash worsens
`despite home treatment. See your child's doctor if the rash
`occurs along with any of the following: (1) fever; (2)
`blisters or boils; (3) a rash that extends beyond the diaper
`area; (4) pus or weeping discharge.
`
`http://w ww.mayoclinic.com/health/
`links:
`Useful
`diaperrash/DS00069 and http://www.patiented.aap.org/
`content.aspx?aid=5297
`
`language provides only
`this
`The first paragraph of
`rudimentary information whose value to unnamed class
`members is negligible. Again the parties offer no specific
`argument to the contrary. The second paragraph instructs
`parents to “[s]ee your child's doctor” if certain rather alarming
`symptoms develop. We suppose there is some modest value
`in that suggestion, although the district court said nothing
`about this point specifically. But we would denigrate the
`intelligence of ordinary consumers (and thus of the unnamed
`class members) if we concluded that—absent this suggestion
`from P & G—they would have little idea to “see [their]
`child's doctor” if their child's rash was accompanied by
`a fever or boils or “pus or weeping discharge.” And we
`would denigrate their intelligence still further if we concluded
`that the value of this suggestion was so great, to ordinary
`consumers, as to be commensurate with a fee award of
`$2.73 million. The information contained in this paragraph
`is neither unknown nor counterintuitive to most people—the
`way that information about, say, toxic-shock syndrome would
`have been to consumers in 1980. Instead the information is
`common sense, within the ken of ordinary consumers, and
`thus of limited value to them.
`
`The parties offer several arguments in response. The first
`is that, absent the new website language, unnamed class
`members might remain “unaware that diapers themselves can
`sometimes cause skin irritation requiring medical attention.”
`Plaintiffs' Br. at 23. But the website language does not tell
`them that. The language says to see a doctor if certain
`symptoms develop, not that the cause of the rash or other
`symptoms might be the diapers themselves. Indeed it could
`hardly be otherwise: the settlement agreement expressly states
`that nothing therein shall be construed as an admission by P
`& G “of the truth of any fact alleged by Plaintiffs”—of which
`this alleged fact, above all, was one.
`
` The second argument is that “every square centimeter” of a
`Pampers-box label is “extremely valuable” to P & G. That
`may well be true; but it is surely less true for unnamed
`class members, most of whose Pampers boxes, once emptied,
`presumably end up by the curb. The third argument is of
`a piece: that “[n]o company with an $8–billion–per–year
`diaper brand wants to put the words ‘blisters,’ ‘boils,’ ‘pus'
`or ‘weeping discharge’ on its website, but that is what the
`Settlement requires of P & G.” Plaintiffs' Br. at 24. Again
`we have no reason to doubt that assertion, but it displays the
`same egocentrism as the last one. To be clear: “The fairness
`of the settlement must be evaluated primarily based on how
`it compensates class members ”—not on whether it provides
`relief to other people, much less on whether it interferes
`with the defendant's marketing plans. Synfuel Techs., Inc. v.
`DHL Express (USA), Inc., 463 F.3d 646, 654 (7th Cir.2006)
`(emphasis added); see also, e.g., Katrina Canal Breaches
`Litig., 628 F.3d at 195; Gen. Motors Pick–Up Litig., 55 F.3d
`at 809–12. So these arguments too are meritless.
`
`The parties' remaining argument with regard to the website
`changes, in particular, is that the changes include links
`to two other sites that include more in-depth information
`*721 about diaper rash. The implication, apparently, is that
`unnamed class members would not find those sites or others
`like them absent the hyperlinks on the Pampers site. The
`implication is risible; and the parties have not borne their
`burden to prove otherwise. Any unnamed class member with
`the means to access Pampers.com and then follow a link
`to a more informative website is almost certainly a class
`member who is familiar with Google. (Indeed, P & G itself
`cites the likelihood of Google searches by unnamed class
`members in arguing that the parties provided them with
`adequate notice of the settlement. P & G Br. at 58 n. 39.) And
`merely typing “diaper rash” into the Google search engine
`produces exponentially more links and information than a
`class member would find on Pampers.com.
`
`In sum, we reject the parties' assertions regarding the value of
`this settlement to unnamed class members. Those assertions
`are premised upon a fictive world, where harried parents of
`young children clip and retain Pampers UPC codes for years
`on end, where parents lack the sense (absent intervention by P
`& G) to call a doctor when their infant displays symptoms like
`boils and weeping discharge, where those same parents care
`as acutely as P & G does about every square centimeter of a
`Pampers box, and where parents regard Pampers.com, rather
`than Google, as their portal for important information about
`their children's health. The relief that this settlement provides
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
`
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`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38404 Filed 02/17/21 Page 7 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
`
`to unnamed class members is illusory. But one fact about this
`settlement is concrete and indisputable: $2.73 million is $2.73
`million.
`
`“Cases are better decided on reality than on fiction.” United
`States v. Priester, 646 F.3d 950, 953 (6th Cir.2011). The reality
`is that this settlement benefits class counsel vastly more than it
`does the consumers who comprise the class. The conclusion is
`unavoidable: this settlement gives “preferential treatment” to
`class counsel “while only perfunctory relief to unnamed class
`members.” Vassalle, 708 F.3d at 755 (internal quotation marks
`omitted). The settlement in this case is not fair within the
`meaning of Rule 23, and the district court abused its discretion
`in finding the contrary.
`
`B.
`
` We briefly address Greenberg's argument that the named
`plaintiffs are inadequate representatives of the class under
`Rule 23(a)(4). Under that Rule, we measure the adequacy
`of the class members' representation based upon two factors:
`“1) the representatives must have common interests with
`unnamed members of the class, and 2) it must appear that
`the representatives will vigorously prosecute the interests of
`the class through qualified counsel.” Vassalle, 708 F.3d at
`757 (internal quotation marks and alterations omitted). The
`Rule requires that “the class members have interests that are
`not antagonistic to one another.” Id. (internal quotation marks
`omitted). Thus, “the linchpin of the adequacy requirement
`is the alignment of interests and incentives between the
`representative plaintiffs and the rest of the class.” Dewey
`v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 183 (3d
`Cir.2012).
`
` These requirements are scrutinized more closely, not less,
`in cases involving a settlement class. For the reasons already
`explained, see supra at 717–18, “the need for the adequacy
`of representation finding is particularly acute in settlement
`class situations[.]” Gen. Motors Pick–Up Litig., 55 F.3d at
`795. Thus, the Supreme Court itself has emphasized that the
`courts must give “undiluted, even heightened, attention in the
`settlement context [ ]” to the certification requirements of
`Rule 23. *722 Amchem Prods., Inc. v. Windsor, 521 U.S.
`591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); see also
`UAW, 497 F.3d at 625 (same).
`
`So we consider the alignment of interests and incentives here.
`They can be summarized as follows: The named plaintiffs
`
`(i.e., the class representatives) exercise their Rule 23 rights
`and receive an award of $1000 per child in return; the
`unnamed members are barred from exercising those same
`rights and receive nothing but illusory injunctive relief.
`Therein lies the conflict. There is no overlap between these
`deals: they are two separate settlement agreements folded
`into one. Moreover, there is every reason to think—and
`again the parties have not attempted to show otherwise—
`that an award of $1000 per child more than compensates the
`class representatives for any actual damages they might have
`incurred as a result of buying Dry Max diapers. And thus,
`having been promised the award, the class representatives
`had “no interest in vigorously prosecuting the [interests of]
`unnamed class members [.]' ” Vassalle, 708 F.3d at 757.
`
`Class counsel responds that the $1000 per child payments
`are merely “incentive” awards, and that incentive awards
`are common in class litigation. But neither point provides
`much comfort. Our court has never approved the practice of
`incentive payments to class representatives, though in fairness
`we have not disapproved the practice either. See Vassalle,
`708 F.3d at 756. Thus, to the extent that incentive awards
`are common, they are like dandelions on an unmowed lawn
`—present more by inattention than by design. And we have
`expressed a “sensibl[e] fear that incentive awards may lead
`named plaintiffs to expect a bounty for bringing suit or to
`compromise the interest of the class for personal gain.” Hadix
`v. Johnson, 322 F.3d 895, 897 (6th Cir.2003).
`
`We have no occasion in this case to lay down a categorical
`rule one way or the other as to whether incentive payments
`are permissible. But we do have occasion to make some
`observations relevant to our decision here. The propriety
`of incentive payments is arguably at its height when the
`award represents a fraction of a class representative's likely
`damages; for in that case the class representative is left to
`recover the remainder of his damages by means of the same
`mechanisms that unnamed class members must recover theirs.
`The members' incentives are thus aligned. But we should be
`most dubious of incentive payments when they make the class
`representatives whole, or (as here) even more than whole; for
`in that case the class representatives have no reason to care
`whether the mechanisms available to unnamed class members
`can provide adequate relief. Accord Radcliffe v. Experian Info.
`Solutions, 715 F.3d 1157, 1161 (9th Cir.2013) (holding that
`the “incentive awards significantly exceeded in amount what
`absent class members could expect upon settlement approval”
`and thus “created a patent divergence of interests between the
`named representatives and the class”).
`
` © 2021 Thomson Reuters. No claim to original U.S. Government Works.
`
`6
`
`

`

`Case 2:12-md-02311-SFC-RSW ECF No. 2114-13, PageID.38405 Filed 02/17/21 Page 8 of 9
`In re Dry Max Pampers Litigation, 724 F.3d 713 (2013)
`86 Fed.R.Serv.3d 216
`
`This case falls into the latter scenario. The $1000–per–child
`payments provided a disincentive for the class members to
`care about the adequacy of relief afforded unnamed class
`members, and instead encouraged the class representatives
`“to compromise the interest of the class for personal
`gain.” Hadix, 322 F.3d at 897. The result is the settlement
`agreement in this case. The named plaintiffs are inadequate
`representatives under Rule 23(a)(4), and the district court
`abused its discretion in finding the contrary.
`
`We express no opinion regarding Greenberg's remaining
`objections to the settlement.
`
`* * *
`
`*723 The judgment of the district court is reversed, and the
`case remanded for further proceedings consistent with this
`opinion.
`
`COLE, Circuit Judge, dissenting.
`I dissent from the majority's conclusion that the district court
`abused its discretion by finding (1) the settlement in the
`instant case fair, reasonable, and adequate under Rule 23; and
`(2) the named plaintiffs to be adequate representatives despite
`the incentive payments.
`
`We cannot evaluate a settlement's fairness without “weighing
`the plaintiff's likelihood of success on the merits against the
`amount and form of the relief offered in the settlement.” Int'l
`Union, United Auto., Aerospace & Agr. Implement Workers of
`Am. v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir.2007).
`In fact, this is the most important of the seven factors that
`we are supposed to consider in reviewing the fairness of a
`settlement. Poplar Creek Dev. Co. v. Chesapeake Appalachia,
`LLC, 636 F.3d 235, 245 (6th Cir.2011).
`
`Although the relief offered to the unnamed class members
`may not be worth much, their claims appear to be worth
`even less. Nobody disputes that the class's claims in this case
`had little to no merit. In the absence of this settlement, class
`members would almost certainly have gotten nothing. And
`even with the settlement, unnamed class members remain free
`to try their luck, as the settlement preserves their right to sue
`for personal injury and actual damages caused by Dry Max
`diapers. Thus, the concern that plaintiffs' counsel “bargained
`away” some valuable “interest” is misplaced. A very different
`
`settlement would likely be before us if the Commission's
`investigation had not exculpated Dry Max diapers.
`
`The majority does not apply this Court's established multi-
`factor tests for settlement fairness and the reasonableness of
`fee awards. See UAW, 497 F.3d at 631; Moulton v. U.S. Steel
`Corp., 581 F.3d 344, 352 (6th Cir.