Navigating Class Actions After Papa John's Settlement Denial

By William Reiss, Ellen Jalkut, and Laura Song

In a surprising decision, the U.S. District Court for the Western District of Kentucky declined to preliminarily approve a $5 million settlement in an antitrust class action seeking to resolve the In Re: Papa John's Employee and Franchisee Employee Antitrust Litigation no-poach case alleging that Papa John's and its franchises agreed not to solicit each other's employees.

In doing so, the court, on Sept. 15, 2023, found that the named plaintiff likely established that the settlement was fair, reasonable and adequate, but declined to grant preliminary approval, because the named plaintiff did not provide sufficient information to determine whether the settlement class should be certified.

This article explores developments in the case law regarding the level of scrutiny courts apply in certifying a settlement class and focuses on the potential detrimental effects associated with courts evaluating the propriety of certifying a settlement class without considering the cotext.