‘The Court Has Concerns’: Another Judge Looks at Claims Administrator Angeion’s Contract With Prepaid Card Provider
In a developing saga of transparency issues in class action settlements, U.S. District Judge Edward Davila has become the second federal judge in less than a month to scrutinize claims administrator Angeion Group’s financial arrangements with prepaid card provider Blackhawk Engagement Solutions. This probe, in a $100 million Google Ads settlement, echoes similar concerns raised by Judge Vince Chhabria in the Facebook privacy case, amid broader racketeering allegations against Angeion and other administrators.
The Probe: Judge Davila’s Order in the Google Ads Settlement
On September 9, 2025, Judge Edward Davila of the Northern District of California issued an order expressing “concerns” over Angeion’s undisclosed revenue-sharing deal with Blackhawk, the third-party vendor handling digital Mastercard distributions for class members. The judge sought detailed information on the arrangement, questioning whether it created conflicts of interest that could undermine the settlement’s fairness.
Davila’s directive follows a hearing where he confirmed Angeion’s relationship with Mastercard (via Blackhawk) and probed for any undisclosed benefits, such as rebates from unclaimed funds or card usage fees. He ordered Angeion to disclose the contract to class members and imposed corrective measures, including reducing class counsel’s $3.86 million expense award by $260,000—the maximum amount Angeion could receive from Blackhawk. Despite these issues, Davila ultimately approved the settlement on September 2, 2025, noting it would not impact the settlement fund’s value, with class members receiving 100% of their damages.
This action comes just weeks after Judge Chhabria’s August 19 order in the Facebook case, where he required Angeion to submit its Blackhawk agreement in camera for private review. Both judges’ interventions stem from lead counsel’s motions highlighting potential improprieties discovered after racketeering lawsuits surfaced.
Background: Racketeering Allegations and the Rise of Prepaid Cards in Settlements
Angeion Group, a Philadelphia-based claims administrator founded in 2008, has handled high-profile settlements like Thomson Reuters ($27.5 million in 2024) and Equifax data breach payouts. The company partners with fintech firms like Blackhawk to distribute funds via prepaid digital cards, a convenient option for class members but one increasingly criticized for hidden revenue streams.
The controversy erupted in early 2025 with class action lawsuits accusing Angeion and peers like Settlement Services, Inc., of RICO violations through schemes involving wire and mail fraud. Plaintiffs allege administrators collude with card issuers to pocket up to 50% of unclaimed or residual funds as undisclosed rebates, shortchanging consumers. In the Facebook settlement, 28% of 19 million claimants opted for prepaid cards, potentially generating significant rebates for Angeion.
Angeion has defended its practices, stating it administers settlements per court orders and that agreements with Blackhawk “contemplate financial benefit” but comply with terms. However, plaintiffs’ attorneys in both cases demanded disclosure or redirection of rebates to class members, with Angeion initially refusing. Experts estimate 20% of settlement funds can be lost to such “kickbacks,” eroding trust in the class action system.
Expert Opinions and Public Reactions: Calls for Greater Oversight
Legal experts see Davila’s order as a continuation of judicial pushback against opaque practices. Class action attorney Elizabeth Cabraser noted that such disclosures are “essential to ensuring settlements serve plaintiffs, not intermediaries.” RICO specialists argue the revenue-sharing fits the “enterprise” pattern for racketeering, a novel application to claims admins. In the Google case, Davila’s $260,000 deduction signals courts’ willingness to penalize non-disclosure, potentially setting precedents for fee adjustments.
Public and advocacy reactions have intensified scrutiny. On social media, hashtags like #ClassActionScam trended, with users sharing stories of low payouts and demanding reforms. The National Association of Consumer Advocates urged congressional mandates for full disclosure, while Angeion praised the judges for allowing distributions to proceed. No formal response from Blackhawk was available, but industry insiders predict defensive strategies amid at least three ongoing federal probes.
Impact on U.S. Readers: Implications for Consumers and the Legal System
For everyday Americans, these judicial concerns highlight flaws in class action payouts, where billions are distributed annually but often diluted by admin fees. In the Google Ads case, involving advertisers over anticompetitive practices, undisclosed rebates could reduce net recoveries, affecting small businesses economically. The Facebook settlement, with $725 million for 28 million users, faces similar risks, potentially delaying $40 average payouts.
Lifestyle-wise, it erodes confidence in settlements for privacy or product claims, prompting more to opt for checks over cards. Politically, it fuels calls for FTC oversight on fintech ties, tying into consumer protection debates. Technologically, the rise of digital cards raises data privacy issues, relevant to ongoing suits like Equifax. Sports fans affected by league-related settlements (e.g., NFL concussions) may see parallels in admin fee disputes.
Conclusion: Mounting Judicial Scrutiny Signals Potential Reforms
Judge Edward Davila’s probe into Angeion’s Blackhawk contract, following Judge Chhabria’s order, underscores growing judicial unease over hidden financial incentives in class action administration. While settlements like Google Ads proceed with adjustments, the racketeering suits could force industry-wide transparency.
Looking ahead, expect more courts to demand disclosures, possibly leading to legislative changes. For U.S. consumers, this serves as a wake-up call to scrutinize payout options, ensuring hard-earned settlements aren’t eroded by unseen profits. As probes deepen, accountability may finally catch up to an opaque sector.