Attorneys for a class of plaintiffs recently pocketed an $8.12 million fee award, taken from a $32 million class action settlement paid by Uber. Several class members objected to the legal fees, arguing that the “coupon” rule under the Class Action Fairness Act prohibited such an award. On November 30, the Ninth Circuit found the lawyers were entitled to keep their fee.

The case against Uber concerned alleged misrepresentations and omissions regarding the company’s “Safe Rides Fee.” Customers were charged a Safe Ride Fee for each ride, meant to cover the cost of Uber conducting a background check of each driver. The complaint alleged that the company lied about the adequacy and thoroughness of its safety efforts, obviating the purpose of the fee.

Although the case reached settlement, not all class members were pleased. Several members objected to the attorney fee award. The Class Action Fairness Act (CAFA) gives federal jurisdiction over class actions that satisfy certain requirements regarding the number of plaintiffs involved, their locations, and the amount of money at stake in the case.

In passing CAFA, Congress expressed concerns over the possibility of cases in which class members receive little or no value, including settlements in which “counsel are awarded large fees, while leaving class members with coupons or other awards of little or no value." Congress was especially concerned with settlements that award the plaintiffs only coupons or discounts, requiring the plaintiffs to spend their own money or pay it right back to the defendant, while class counsel pockets a big chunk of actual cash. Federal courts disfavor large attorney fee awards when the class benefits little.

Federal courts in California will apply the so-called coupon rule when the settlement awards class members mere discounts, requiring class members to spend their own money to even benefit from the settlement. The Ninth Circuit distinguishes settlements in which the award allows the class members to purchase an entire product or service or other benefits that are transferable. Even if technically “coupons,” the latter form of settlement award is allowed.

In the case at bar, the settlement for each individual class member is undeniably paltry. Each class member is entitled to receive an amount based on how much they paid in “Safe Ride Fees.” The average class member award is $1.07, and many will get $0.35 or less. They can collect the award in cash, via PayPal, or via bank deposit. Class members who do not submit a claim form, including those who never saw the notice or who prefer an Uber credit, will be given $1 in an Uber credit uploaded to their account. If a class member does not use their credit in a year, Uber will attempt to pay the amount to the member’s card on file.

One dollar (or less) is, of course, too little to cover a ride or meal, meaning anyone who gets the credit will need to give Uber more money to actually utilize their settlement award. As reported by the district court: “Only 82,375 class members, or less than 0.4% of the class, submitted a claim form; the remaining 99.6% of class members will receive an Uber credit by default, as will the approximately 18,000 class members who submitted a claim form electing an Uber credit.”

On appeal, the Ninth Circuit ruled that CAFA’s coupon settlement restriction should not apply. Class members can elect to get their award in cash, and even if they take an Uber credit, that credit may be paid back in cash if the credit is never used. While the court agreed that “the amounts to be distributed are modest, even minuscule,” that does not control whether the payment constitutes a “coupon.” The settlement was otherwise deemed fair, and the percentage of the settlement paid to the attorneys is in line with other attorney fee awards in similar class actions.

Although each individual consumer will receive only a small amount of money, the total cost to Uber will be upwards of $20 million, and the company will be forced to change the fee it charges or the services it provides in exchange for the fee. This represents a significant victory for consumers that would not have been possible without the extensive time and investment the lawyers took to pursue the case to its conclusion. This is one of the main reasons class action litigation exists: to obtain justice for a large class of consumers even when the dollar value of each individual’s harm is not great.