April 11, 2022

Fourth Circuit Explains How Burdens Should be Allocated for Objections to Class Settlement

You've Reached Your
Free Article Limit This Month
Subscribe now to get unlimited access to all OnPractice content. Your subscription is free.
Subscribe Now

The Fourth Circuit has jurisdiction over Maryland, North Carolina, South Carolina, Virginia, and West Virginia.


The parties in the long-running class action reached a proposed $40 million settlement that would provide a minimum of $100 recovery in partial premium refunds for each member of the class of life insurance policyholders. The federal district court in Maryland granted preliminary class certification and preliminary settlement approval. Eighty-nine class members opted out (less than one percent of the class) and one class member objected to the settlement.

The district court overruled the objection, certified the class for settlement purposes, and granted final approval to the settlement agreement. The objector appealed, contending the court abused its discretion in certifying the class and in finding the proposed settlement fair, reasonable, and adequate. The objector also argued the court improperly shifted the burden to the objector to demonstrate that the parties seeking approval failed to show class certification requirements were met and the settlement was fair.

Fourth Circuit Ruling

The Fourth Circuit affirmed the district court's ruling. The panel's decision explained "who bears what burdens when a class member objects to a proposed settlement" under Federal Rule of Civil Procedure 23(e)(5).

The court explained:

  • The objector must state the basis for the objection with sufficient specificity to allow the parties seeking settlement approval to respond and the court to evaluate the issues in dispute.
  • The parties seeking approval of the class settlement have the usual burdens to show that the proposed class satisfies Rule 23(a) requirements for certification, and also that the proposed settlement is "fair, reasonable, and adequate."
  • The parties seeking approval bear the burden of showing that the objection does not demonstrate that the class failed to satisfy the above burdens. The extent of this showing will vary "with the strength of the objection itself."
  • Finally, as the fiduciary of the class, the court must protect the class both from parties (and their counsel) that are overeager to settle and from frivolous objectors.

A district court has discretion to allow the objector to conduct discovery to aid the court in evaluating the merits of the objection, the Fourth Circuit said. (Here, the district court continued the final fairness hearing to allow interim discovery — "an extremely unusual occurrence," the appeals court pointed out, particularly where there had already been protracted discovery.)

In this case, the appeals court held the district court correctly applied the respective burdens and did not improperly place the settling parties' burdens on the objector.

The Fourth Circuit also held the district court did not abuse its discretion in certifying the class after evaluating the objector's arguments (noting the "substantial deference" given to trial courts, which have greater experience than appellate courts "managing the practical problems of a class action") or in concluding that the proposed class settlement was fair, reasonable, and adequate.

Workplace class actions frequently end in settlement, often after lengthy negotiations and a delicate balancing of the parties' interests. Objections to a settlement can make it significantly more challenging to resolve the dispute. Contact your Jackson Lewis attorney if you have questions about the requirements for obtaining court approval of a proposed class action settlement when faced with a class member objector.

©2022 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

Focused on labor and employment law since 1958, Jackson Lewis P.C.'s 950+ attorneys located in major cities nationwide consistently identify and respond to new ways workplace law intersects business. We help employers develop proactive strategies, strong policies and business-oriented solutions to cultivate high-functioning workforces that are engaged, stable and diverse, and share our clients' goals to emphasize inclusivity and respect for the contribution of every employee. For more information, visit

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

More From Jackson Lewis P.C.

South Carolina Anti-Vaccine Mandate Law: Implications for Private Employers

By T. Chase Samples Jackson Lewis P.C. May 16 , 2022

South Carolina Governor Henry McMaster has signed into law House Bill 3126, which has implications for public and private employers that continue to require employees in South Carolina to be vaccinated against COVID-19.

Transferring Talent from Facilities Abroad as Option for Skilled Workers for Manufacturing Companies

By Nicola Ai Ling Prall Jackson Lewis P.C. May 13 , 2022

Using treaty of commerce and navigation visas as a possible option for manufacturing companies searching for talent is a great way for manufacturing companies to explore. Companies with affiliates abroad have another option: the L-1 visa.

Chicago Adopts New Sexual Harassment Prevention Obligations for Employers

By Nadine C. Abrahams Jackson Lewis P.C. May 13 , 2022

The Chicago City Council has created new employer obligations to provide training to employees and supervisors on sexual harassment prevention and how bystanders should respond to sexual harassment.

More From Class Actions

Fifth Circuit Decision Could Undermine Constitutionality of HHS Civil Money Penalty Laws

By Robert P. Charrow Greenberg Traurig May 20 , 2022

On May 18, 2022, the U.S. Court of Appeals for the Fifth Circuit issued its decision in Jarkesy v. Securities and Exchange Comm’n, in which it examined the constitutionality of an agency civil money penalty enforcement proceeding.

Construction Company Settles False Claims Act Allegations Relating to Small Business Subcontracting for $2.8 Million

By Melissa P. Prusock Greenberg Traurig May 13 , 2022

On May 12, the U.S. Department of Justice announced a $2,804,110 settlement with Hensel Phelps Construction Company to resolve allegations that it violated the False Claims Act (FCA) by circumventing federal regulations designed to encourage contract awards to service-disabled veteran owned small businesses (SDVOSBs). According to the settlement, Hensel Phelps, a general contractor that performs public and private construction projects, improperly claimed credit toward its small business subcontracting goals for subcontracts it awarded to an SDVOSB that it should have known was acting as a mere “pass-through” for a large business that was actually performing the work.

E2 Law Podcast: Episode 18 |'Fairness' in Superfund Allocation Matters, Part 2B

By David Mandelbaum Greenberg Traurig May 11 , 2022

In Part 2B of Greenberg Traurig Environmental Shareholder David Mandelbaum’s conversation with William Hengemihle of FTI Consulting on Superfund allocation disputes under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the federal program for cleaning up sites contaminated by historic operations, they discuss fault and when it may trump cost causation, “transactional fairness,” use of contracts experts, cooperation, and recalcitrance.

Featured Stories