IN RE CARLOTZ, INC. SECURITIES LITIGATION
- Subramanian
- 1:21-cv-05906
- U.S. District Court · Southern District of New York
- 6
In re Carlotz Securities Litigation: Judge Subramanian denied the pro se objectors’ motion to undo the settlement judgment and pause distribution.
Xinbao Wang and Fen Wang, the self-represented settlement-class members who challenged the settlement judgment; the ruling also leaves the approved settlement and distribution process in place as described in the opinion.
What happened
In In re Carlotz, Inc. Securities Litigation, settlement-class members Xinbao Wang and Fen Wang asked the court to undo the final judgment approving the settlement and attorneys’ fees. They also asked to pause distribution of settlement funds while their appeal was pending.
The Wangs argued that they were not given a meaningful chance to participate in the fairness hearing, that lead counsel made misleading statements, and that the court’s findings supporting the settlement were inadequate. The court’s order states that the court had set up a remote line after the Wangs asked to participate remotely, but counsel did not successfully communicate that information. The court later held a supplemental hearing for them.
Judge Subramanian denied the motion, relying on the plaintiffs’ opposition. He stated that the Wangs received the minimum procedural protections required under the circumstances and directed the Clerk of Court to terminate the motion.
The detailed version
- IN RE CARLOTZ, INC. SECURITIES LITIGATION · No. 1:21-cv-05906
- Subramanian
- Aug. 6, 2025
Background
Xinbao Wang and Fen Wang, who represented themselves, were members of the settlement class. They moved under Federal Rule of Civil Procedure 60(b) to vacate, or undo, the July 7, 2025 Final Judgment and Order of Dismissal with Prejudice and the June 11, 2025 order approving the settlement and attorneys’ fees. They also requested an indicative ruling under Rule 62.1 in case the pending appeal prevented the district court from granting relief immediately. Alternatively, they asked the court to stay distribution of the settlement funds.
Objectors’ Arguments
The Wangs argued that they were denied reliable notice and meaningful access to the June 10, 2025 settlement fairness hearing. They also alleged that lead counsel made unsupported statements and concealed information about conflicts within the settlement class and releases of insider-liability claims. In addition, they argued that the final approval order did not adequately analyze differences between short-term and long-term investors, the insider releases, or the attorneys’ fees.
Court’s Ruling
The order states that, for the reasons in the plaintiffs’ opposition, the motion was DENIED. Judge Arun Subramanian noted that the Wangs chose not to appear in person for the fairness hearing and requested remote participation through plaintiffs’ counsel. The court had set up a remote line, but an inadvertent error by counsel prevented the information from reaching the Wangs. The court then held a supplemental hearing to give them another opportunity to present their objections before entering judgment.
The court concluded that the Wangs received the “minimal procedural due process protection[s]” required in this setting. It cited authority stating that requiring objectors to appear in person through counsel does not itself violate due process, and it directed the Clerk of Court to terminate the motion at ECF No. 206. The text supplied does not state a separate disposition of the requested stay beyond the denial of the motion.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.