Hawes v. Macy’s Inc.

Docket number: No. 17-cv-0754 (S.D. Ohio)

On September 6, 2023, the Hamilton Lincoln Law Institute filed an amicus brief in opposition to the settlement filed by the parties in Hawes v. Macy’s Inc. to settle a class suit related to allegedly mislabeled sheets sold in Macy’s stores. The Court agreed with HLLI’s participation as amicus in the case and GRANTED its motion for leave to file amicus on October 10. HLLI opposes the settlement on behalf of the class members because it will deliver most of the promised relief to the Public Interest Research Group (PIRG) via cy pres. And because PIRG is a left-wing advocacy group, HLLI also contested this settlement on First Amendment grounds because it distributes the class’s money to a political nonprofit without the class members’ consent.

As currently structured, the settlement obligates Macy’s to pay $10,500,000—but most of that money won’t go to the class. Macy’s lacks records for many of the class members, so it is incumbent on them to file for relief. But the incentive to do so—in the first distribution, either $7.50 per purchase with proof or $2.50 in total without it—is de minimis. And the second distribution is capped at 150% of purchase price for the few with proof who qualify. Accordingly, most of the remaining money will not be distributed until the cy pres scheme kicks in, where it will be funneled to PIRG.

While the parties represent PIRG as a neutral consumer protection group, in reality it is a left wing political advocate. PIRG was founded by Ralph Nader and takes radical quality of life positions: It opposes nuclear energy expansion and gas drilling, promotes bans on gas stoves and everyday plastics, and even cheered the COVID-19 lockdowns. And the organization’s advocacy encroaches into independently disqualifying social issues, such as diversity, equity and inclusion initiatives. If this settlement is approved, every member of this class will be sponsoring these views—likely without any knowledge, and certainly without any affirmative consent.

When a class action settlement is structured, both the law and principles of fairness demand its relief be targeted toward the class members harmed. And class settlements are not charitable vehicles to route relief intended for the class to a third party uninjured by a defendant’s conduct—especially when that third party is engaged in political advocacy. Accordingly, HLLI moved to speak on behalf of unknowing class members in this case, to ensure relief is delivered to them and to preclude their settlement money from sponsoring PIRG’s views without their consent.

The district court held a fairness hearing on October 20, 2023. After the fairness hearing, the Court invited HLLI to submit supplemental briefing on whether PIRG was a suitable cy pres recipient. On November 10, HLLI filed its supplemental brief  reiterating its arguments that PIRG lacks a suitable nexus with the class. On December 20, the court rejected the settlement, agreeing with HLLI that PIRG was an inappropriate cy pres beneficiary and their appointment rendered the settlement unfair.

Case Documents