“Made-Available” Value & the Meaning of “Clear-Sailing”
A Comprehensive Commentary on In re Wawa, Inc. Data Security Litigation (3d Cir. 2025)

1. Introduction

The Third Circuit’s precedential opinion in In re Wawa, Inc. Data Security Litigation, No. 24-1874 (3d Cir. June 25 2025) (“Wawa II”), marks the Court’s second—and final—encounter with a contentious data-breach class settlement arising from the 2019 Wawa convenience-store hack. Objector-appellant Theodore H. Frank challenged the $3.04 million fee award to class counsel after an earlier panel (Wawa I, 85 F.4th 712 (3d Cir. 2023)) vacated and remanded for closer scrutiny of attorney-fee fairness and possible “side agreements.”

On remand Judge Gene E. K. Pratter again approved the same fee, finding (i) no impermissible “clear-sailing” or reversion provision, and (ii) a reasonable fee when measured against the total benefits made available—rather than actually claimed—by the 22-million-member settlement. The Third Circuit now affirms, elaborating important doctrinal points on:

• What language constitutes a prohibited “clear-sailing” promise;
• When an omitted or deleted reversion clause signals collusion;
• How courts choose between “amount paid” and “amount made available” when applying the percentage-of-recovery method under Rule 23(h); and
• The continuing deference owed to district judges acting as fiduciaries for absent class members.

2. Summary of the Judgment

The Court of Appeals (Smith, C.J., joined by Hardiman & Porter, JJ.) affirms Judge Pratter’s post-remand order approving:

• A $3.2 million common-fund for fees, expenses, and administration, including $3.04 million in attorneys’ fees;
• Gift-card/cash compensation tiers to consumers, automatic e-gift cards for 560,000 mobile-app users, and up to $500 cash for proven losses;
• Extensive, court-enforceable data-security injunctive relief.

Key holdings:

1. Paragraph 78—a promise that Wawa would “cooperate” in supplying information for the fee petition—is not a “clear-sailing” clause because it lacks any waiver of Wawa’s right to oppose fees.
2. The initial “kicker” (reversion to Wawa of any fee reduction) was an inadvertent omission, removed well before final approval; its brief appearance does not establish collusion.
3. District courts retain discretion to base percentage fees on the total value made available to the class—including gift cards and non-monetary injunctive relief—when that approach better reflects the settlement’s benefit and the litigation’s goals.

3. Analysis

3.1 Precedents Cited

• In re Baby Products Antitrust Litig., 708 F.3d 163 (3d Cir. 2013) – warned against fee awards disproportionate to class recovery but rejected a rigid cap.
• In re Nat’l Football League Players Concussion Inj. Litig., 821 F.3d 410 (3d Cir. 2016) – required special scrutiny of clear-sailing provisions.
• Gunter v. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir. 2000) – seven-factor test for percentage-of-recovery fees.
• In re Rite Aid Corp. Sec. Litig., 396 F.3d 294 (3d Cir. 2005) – lodestar cross-check endorsed.
• Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014) and Roes v. SFBSC Mgmt., 944 F.3d 1035 (9th Cir. 2019) – influential on reversions/kickers.
• Wawa I, 85 F.4th 712 – earlier Third Circuit decision remanding for enhanced scrutiny.

The panel synthesizes these authorities to crystallize two doctrinal clarifications:

1. “Clear-sailing” requires an express agreement not to contest fees; cooperation clauses alone do not trigger the presumption of collusion.
2. Valuation of class benefit remains case-specific; courts may elect either “paid” or “made-available” metrics so long as the choice is explained and cross-checked.

3.2 Legal Reasoning

(a) Absence of Side Agreements

Examining sworn declarations, drafting history, and hearing testimony, the Court affirms Judge Pratter’s factual findings that:

• No evidence showed Wawa promised silence on fees.
• The temporary reversion clause was a drafting gap fixed in the “Third Amended Settlement.” Its removal shifted any fee savings to class members, eliminating the danger flagged in Pearson.
• Objector Frank had himself “expressly declined” to allege collusion during remand, undercutting any inference of coordinated self-dealing.

(b) Reasonableness of Fees

The Court reiterates the flexible percentage-of-recovery framework:

“Every class action presents its own unique facts… District courts may consider a range of factors… and we have avoided adopting hardline rules that would make ‘fee awards exceeding the amount directly distributed to class members presumptively unreasonable.’” (Slip op. at 32-33, quoting Baby Products).

Applying Gunter and a lodestar cross-check (negative multiplier 0.78), the Court endorses the $3.04 million fee as:

• Only 12.6 % of the roughly $24 million face-value settlement (gift cards + cash fund + administration + enforceable injunctive obligations);
• Well below comparator data-breach awards; and
• Supported by nearly 6,000 hours’ work at a $653 blended rate.

(c) Treatment of Injunctive Relief & Gift Cards

Two substantive points emerge:

1. Gift cards ≠ coupons. Because Wawa cards are fully transferrable, cover the entire product line, and have no expiry, they function as cash equivalents. Thus the Class Action Fairness Act’s “coupon-settlement” fee limits (28 U.S.C. § 1712) do not apply.
2. Injunctive relief has cognizable, if non-quantifiable, value. Court-monitored cybersecurity reforms directly redress class harms (lost privacy, fear of future misuse). The panel rejects the “would-have-done-it-anyway” theory as speculative and notes that Rule 23(b)(2) relief was pleaded from the outset.

3.3 Impact of the Decision

(i) Fee-Calculation Jurisprudence

Wawa II gives district courts clearer guidance:

• No mandatory “claimed-fund” baseline. Courts remain free to choose the denominator (paid vs. available) that best captures settlement value.
• Injunctive relief counts. Where the underlying lawsuit seeks structural changes, those changes support the percentage fee even if difficult to monetize.
• Negative lodestar multipliers can affirmatively validate a percentage award, showing counsel were not over-rewarded.

(ii) Class-Action Drafting & Negotiation

• Clear-sailing syntax. Parties desiring fee peace must now use unmistakable language; otherwise courts will presume the absence of a clear-sailing deal.
• Reversion vigilance. Even inadvertent kickers will attract scrutiny. Counsel should document drafting history and promptly excise any clause that risks diverting funds from the class.

(iii) Objector Strategy

Objectors remain a vital safeguard, but Wawa II shows that:

• Allegations of collusion require record evidence, not conjecture;
• Changing litigation positions (e.g., disavowing collusion) can weaken appellate standing; and
• District-court deference is substantial—an objector must show “clear error” or “abuse of discretion,” a high bar.

4. Complex Concepts Simplified

4.1 Clear-Sailing Clause

A settlement term in which the defendant agrees in advance not to oppose—or “sails clear” of—class counsel’s fee request up to a specified cap. Courts scrutinize such clauses because they may invite collusion: class counsel could trade reduced class compensation for guaranteed fees.

4.2 Reversion / “Kicker”

A provision stating that any unawarded fees revert to the defendant instead of the class. It can dilute incentives to police excessive fee requests.

4.3 “Amount Made Available” vs. “Amount Paid”

When using the percentage-of-recovery method, courts must pick a denominator. “Paid” is the cash actually claimed; “Available” is the maximum theoretically obtainable. Wawa II confirms that district courts may pick either, provided they justify the choice and cross-check with lodestar.

4.4 Lodestar Cross-Check

A secondary test: multiply counsel’s reasonable hours by a reasonable rate, then compare to the requested fee. A multiplier >1 rewards risk; <1 indicates restraint.

5. Conclusion

Wawa II reinforces the Third Circuit’s preference for flexible, fact-sensitive fee analysis while tightening the definition of “clear-sailing” agreements and warning against careless inclusion of reversion kickers. District judges, acting as fiduciaries, retain wide discretion—yet must articulate why a given metric (paid vs. available) best reflects settlement value.

For practitioners, the opinion is both a shield and a sword: a shield for reasonable settlements combining cash-equivalent vouchers and injunctive relief, and a sword against boilerplate clauses that jeopardize the class’s share. As data-breach actions proliferate, Wawa supplies a practical roadmap for structuring consumer-friendly relief and defensible fee petitions.