Class-action settlement; International Union, UAW, et al. v. General Motors Corp.; In re Dry Max Pampers Litig.; Likelihood of success on the merits; Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C.; Carson v. American Brands, Inc.; Whether the settlement agreement undercompensated the class; Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco (9th Cir.); Shane Group, Inc. v. Blue Cross Blue Shield of MI; Risk of arbitration; Epic Sys. v. Lewis; Gaffers v. Kelly Servs.; McGrew v. VCG Holding Corp. (Unpub. 6th Cir.); Valuing the settlement agreement’s benefits in the form of injunctive & monetary relief; The Class Action Fairness Act (CAFA) (28 USC § 1712); Distinguishing In re Easysaver Rewards Litig. (9th Cir.); The risk of fraud or collusion; Effect of a “clear-sailing clause”; Gooch v. Life Investors Ins. Co. of Am.; Waters v. International Precious Metal Corp. (11th Cir.); Discovery engaged in by the parties; In re Corrugated Container Antitrust Litig. (5th Cir.); Public interest; In re Cardizem CD Antitrust Litig. (ED MI); Levan v. Sears, Roebuck & Co. (ED TN); Procedural requirements of Fed.R.Civ.P. 23; Wal-Mart Stores, Inc. v. Visa U.S.A., Inc. (2d Cir.); Moulton v. U.S. Steel Corp.; Vassalle v. Midland Funding LLC; Mirfasihi v. Fleet Mtg. Corp. (7th Cir.); Fair Labor Standards Act (FLSA)

[This appeal was from the ED-MI.] The court held that the district court did not abuse its discretion by approving the class-action settlement where the direct benefits provided by the Settlement Agreement (SA) outweighed the value of plaintiffs’ claims. Several years ago, a group of dancers sued defendant-Déjà Vu and another dance club for misclassifying them in an attempt to avoid the requirements of the FLSA and the Michigan Minimum Wage Act. A settlement was reached. The current case was substantially similar. Again, a settlement was reached, including injunctive and monetary relief, and attorney fees. Four dancers (the Objectors) objected. The court applied UAW’s seven-factor test, beginning with the “most important” factor—the likelihood of success on the merits. It agreed with the district court that the direct benefits provided by the SA “outweighed the value of the Dancers’ claims.” The Objectors argued that the SA undercompensated the class. But the court held that the district court adequately reviewed the “damages model” and accounted for all available factors. The district court also considered the possibility of possible counterclaims, an “unfavorable verdict,” and the chance that plaintiffs would be forced into mandatory arbitration. The court held that it did not abuse its discretion when evaluating the SA’s provisions for injunctive and monetary relief. It rejected the claim that “the credits available through the secondary pool function as coupons that cannot be counted toward the total value of” the SA under the CAFA because “the secondary pool does not require class members to ‘hand over more of their own money’ to be eligible to redeem the benefits of” the SA. They also were not required to continue to work for Déjà Vu in order to receive compensation. The SA also offered tangible benefits in the form of injunctive relief. Considering the remaining UAW factors, the court found no “risk of fraud or collusion” as to attorney fees. In the SA’s “clear-sailing clause,” Déjà Vu agreed “‘not to object to a request’ for up to $900,000 of direct attorneys’ fees and up to $300,000 of indirect attorneys’ fees.” The Objectors argued that the fees “dwarf[ed]” the class members’ recovery. But the fees amounted to “only 20% of the combined value of the cash pool and the district court’s approximation of the value of the injunctive relief.” Further, the complexity, expense, and likely duration of the litigation factor supported the SA. The district court also did not err in its rulings as to the other UAW factors. Finally, the court rejected the Objectors’ claims that the SA violated Rule 23’s procedural requirements.