Theodore H. Frank v. Netflix, Inc.

In this appeal, class members challenge the district court’s approval of a settlement between Walmart and a class of Netflix DVD subscribers arguing, among other matters, that the gift card portion of the settlement constituted a coupon settlement within the meaning of the Class Action Fairness Act (“CAFA”), Pub.L. No. 109-2, 119 Stat. 4 (2005). We hold that the settlement was fair and that the fee award was proper, and we affirm the district court.

I

Before its focus changed to streaming video, Netflix’s primary business was renting DVDs to subscribers online and shipping them out by mail. Other companies, including retail giant Walmart, tried to compete. Netflix reached an agreement with Walmart that divided up DVD-related business between the two companies. Under the agreement, Netflix stopped selling DVDs, and focused solely on its DVD rental business. In return, Walmart wound down its own burgeoning online rental service, but continued to act as a major DVD seller.

In 2009, Andrea Resnick and seven other class representatives (“plaintiffs”) filed a consolidated amended class action complaint against Netflix and Walmart, challenging the agreement as…