Toss Remington Deal As Product of Weak Claims, State AGs Urge

By Martina Barash

Attorneys general from Massachusetts and a dozen other states want a federal appeals court Feb. 14 to focus on why differing state-law claims should scuttle a nationwide settlement over allegedly defective Remington rifles.

Rifle owners with the weakest state-law claims negotiated the settlement of the defective-trigger class action, Massachusetts Attorney General Maura Healey says.

Just as the Ninth Circuit did recently in overturning a $210 million auto defect deal, the Eighth Circuit should reject the gun owners’ agreement with Remington Arms Co. because the trial court that approved it didn’t analyze the stronger state-law claims, Healey says.

But whether, and how much time, the appeals court will spend on the choice-of-law issue during oral argument remains to be seen.

Two objectors who are appealing the settlement, Lewis M. Frost and Richard Denney, are primarily focused on what they argue are major flaws in notifying class members of the deal. Those shortcomings have resulted in few guns actually getting fixed, they say.

The settlement covers the popular Model 700 and other rifles and would replace a trigger mechanism allegedly prone to accidental discharge. In some instances, vouchers or reimbursements would be provided.

The district court failed to follow the guidelines the U.S. Supreme Court outlined in Amchem Prods. Inc. v. Windsor, including evaluating state-by-state differences in claim values, the state officials said in their friend-of-the-court brief.

The district court didn’t examine evidence, for example, that class members in many states have “enhanced” claims “because Remington has been aware of the tendency of the rifles at issue to fire without a trigger pull for more than 50 years,” they said.

The AGs’ new arguments against the settlement came after the Ninth Circuit’s Jan. 23 decision in In re Hyundai & Kia Fuel Econ. Litig. The Ninth Circuit, looking to Amchem and federal appeals court decisions, concluded “that courts must consider state differences when evaluating predominance of common questions under Rule 23(b)(3) and in considering the fairness of settlement relief,” the AGs said.

Remington disagrees with Massachusetts and the other states raising the state-law concerns. Differences in state laws are addressed by an Eighth Circuit ruling, Keil v. Lopez, the gunmaker says.

There, the appeals court “squarely held” that there’s no need to separately assess settlement benefits in light of different states’ laws, it says.

Safety Considerations

Massachusetts and the other states also emphasize public safety considerations in their opposition to the settlement’s approval. “Remington’s own customer complaint files contain thousands of reports from consumers that its rifles fired without a trigger pull in just the last four years,” the attorneys general wrote.

Nearly 2,700 gun owners who responded to a notice about the class settlement said their rifles had fired without a trigger pull, and 788 of those incidents resulted in injuries or property damage, according to the AGs’ brief.

Attorneys general from Alabama and 10 other states, however, take a contrary stance. Massachusetts and its “companion” states are “trying to inject issues about firearms regulation” into a settlement of economic losses, according to the Alabama-led brief.

“The mere fact that the product at issue is a gun does not transform this case into a lawsuit about firearm safety,” these attorneys general wrote.

Notice to Owners

Meanwhile, Frost and Denney, the official class objectors to the settlement, are primarily concerned about the lack of notice the rifle owners received about the settlement, as well as some terms of the settlement.

The district court wasn’t satisfied with the parties’ initial notice plan either, but ultimately approved a revised plan despite the concerns of a class notice expert, Todd Hilsee, who wrote a letter on his own to the court.

Notice was both experimental and inadequate and will result in 7.4 million rifles continuing to “pose a deadly danger,” objectors Frost and Denney told the Eighth Circuit in their brief.

The notice plan yielded a “staggeringly low claims rate,” they said. And a rifle-defect case isn’t the time to test new forms of notice, they said.

The benefits to the class members are also inadequate and treat class members differently, the objectors argue.

‘Best Practicable Under the Circumstances’

Remington and the rifle owners who settled with the company defend the settlement and its notice arrangements, which included email and social media outreach.

Remington doesn’t sell firearms directly to consumers and doesn’t have lists of purchasers’ names and addresses, the company argues in its brief.

The trial court “exercised continuous oversight” over the settlement and didn’t abuse its discretion, Remington said. It considered many factors in concluding that notice was “the best practicable under the circumstances,” the company said.

“The district court also properly recognized that the participation rate in class action settlements does not dictate whether notice is the best practicable under the circumstances,” Remington said.

The objectors’ criticism of some settlement benefits, specifically vouchers worth $10 to $12, “centers on a comparatively small fraction of very old rifles covered by the settlement,” the company added.

Claims for economic loss related to those rifles “would face formidable statute-of-limitations and other affirmative defenses,” and the rifles couldn’t be easily retrofitted anyway, it said.

Plaintiff Ian Pollard also defended the settlement. Given “the potential risks of litigation, as well as desiring to provide putative class members with real benefits that go to the heart of Plaintiffs’ allegations, the parties reached a comprehensive settlement agreement that extends to upwards of 7.5 million firearms,” Pollard said in his own brief.

The Holland Law Firm; Neblett, Beard & Arsenault; Levin, Sedran & Berman; and the Lanier Law firm represent the settling plaintiffs.

Shook, Hardy & Bacon LLP and Swanson, Martin & Bell LLP represent Remington.

Kempton & Russell, Bursor & Fisher PA, and others represent the objectors.

The case is Pollard v. Frost, 8th Cir., No. 17-01818, oral argument 2/14/18 .

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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