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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: March 12, 2019

Stipulation to Support Class Action Settlement Unenforceable

On February 14, 2019, the First Department issued a decision in Cohen v. Saks Inc., 2019 NY Slip Op. 01162, holding that a stipulation to support a class action settlement was unenforceable, explaining:

While plaintiffs’ promise to support the stipulation and cooperate in seeking court approval is not an unenforceable statement of intention to do something in the future, it is nonetheless unenforceable. Plaintiffs and their counsel owe fiduciary duties to absent class members and thus cannot be required to support a settlement that is contrary to the best interests of those class members.

(Internal citations omitted).

Class actions are a way for one member of a large group of potential plaintiffs to vindicate the group’s rights. As this decision shows, while the class representatives and their lawyers litigate the class action, they owe a duty to all class members. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding a class action.

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