Objector Blackmail Update: What Have the 2018 Amendments Done?

Abstract

In Part I of this Essay, I describe the problem of objector blackmail, why prohibiting side payments to objectors would be the best way to screen blackmail-minded objections from other objections, and why I did not think the new FRCP 23(e)(5)(B) would do so as effectively. In Part II, I examine what district courts have done with their new side payment approval authority over the first sixteen months. I found six orders by district courts on whether to approve side payments: four approvals and two denials. Although this is not much data, qualitative review of the orders does not inspire confidence that district court judges will have the requisite backbone to reject blackmail-minded side payments. On the other hand, the approved side payments may be less lucrative under the new rule. In Part III, I try to assess how these two contrary forces might weigh against each other by studying empirically whether the new rule has discouraged class action objectors from taking appeals. Although my methods are crude, they suggest there has been no slowdown in these appeals in the first year of the new rule.