(CN) – Western Union must disgorge $135 million in unclaimed wire transfer funds after class claims were “adequately apprised” and fairly settled, the 10th Circuit ruled.
Lead plaintiffs James Tennille, Adelaida Deleon, Yamilet Rodriguez and Robert Smet sued Western Union and Western Union Financial Services for conversion, unjust enrichment and breach of fiduciary duty, in 2009.
They claimed Western Union held on to money transfers that customers attempted to send, but that were not delivered.
Western Union would allegedly return the funds, after deducting administrative fees and only when a customer requested a refund.
While Western Union was generally aware “within minutes” if a transfer failed, the class claimed, the sending customer was often unaware that the transfer failed and did not know to ask for a return.
Western Union earned interest on the unredeemed moneygrams, also called “unsettled money transfers” or “settlement assets,” which ballooned to $135 million, the class claims.
Aided by a 10th Circuit mediator, Western Union and the class negotiated a settlement with an interlocutory appeal pending in 2013.
The company allegedly agreed to immediately notify customers when wire transfers failed and to help customers reclaim money from the relevant state.
The settlement was to be funded using customers’ $135 million in unclaimed funds, the ruling states.
Class members Sikora Nelson and Paul Dorsey, however, objected to the settlement.
Specifically, the pair argued that class representatives could not adequately represent all members, that the settlement was unfair because it used the class’ money, and that the district court did not adequately notify absent class members.
An appellate court upheld the decision.
Last week, the 10th Circuit agreed and concluded that the pair’s “objections lack merit.”
Citing a settlement notice mailed by the district court, U.S. Circuit Judge David Ebel wrote that class members were “adequately apprised” of the agreement.
“The notice informed putative class members how to obtain more information about the settlement, directing them to the class settlement website, where they could get a copy of the settlement agreement, which explained that, if class members did not opt out of the settlement, they would release Western Union from liability for any claim that class members could have asserted based on the subject matter of the class litigation and settlement,” Ebel wrote.
The notice, the three-judge panel added, stated that if members had questions about release claims and what they meant, they could call and speak to class counsel for free or speak to their own attorney at the class member’s expense.
Dorsey, who claimed he did not receive the notice via email, did not “establish that the entire notice plan was inadequate,” Ebel added.
“Even if there were deficiencies in sending notice via emails, those emails only supplemented the mailed notice,” the 31-page ruling states.
Requests for comment were not returned by counsel.
The appeals court said it was “satisfied” with the lower court’s decision.
“We are satisfied that the district court, in certifying the class and approving the class settlement, considered the relevant factors and actually exercised its discretion independently,” Ebel wrote.
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