(RTTNews.com) – A Manhattan New York state appeals court on Thursday said the class action settlements should be assessed in approving a class action settlement involving a challenge by shareholders to Verizon Communications Inc’s ( VZ )$130 billion acquisition of Vodafone Group Plc’s (VOD.L)subsidiaries.

The Appellate Division, First Department, decision said that shareholders and Verizon were not cheated by the proposed 2013 settlement, and therefore the case should be remanded to Manhattan Supreme Court Justice Melvin Schweitzer for a new attorney fees-award hearing.

Justice Marcy Kahn wrote the decision and was joined by Justices Richard Andrias, David Saxe and Karla Moskowitz.

Kahn added: “We now refine our Colt standard of review to add to the five established factors to be used by courts to ensure appropriate evaluation of proposed nonmonetary settlements of class action suits these two additional criteria: whether the proposed settlement is in the best interests of the putative settlement class as a whole, and whether the settlement is in the best interest of the corporation.”

Kahn further added that “‘disclosure-only’ and other forms of nonmonetary settlements themselves proved problematic, because they provided minimal benefits either to shareholders or to their corporations.” She also wrote that “courts and commentators came to view the shareholder class action in this context as a ‘merger tax’ and as a cottage industry for the plaintiffs’ class action bar.”

It also entitled the shareholders’ lawyers to up to $2 million for fees and expenses.

“Given the changing circumstances and concerns surrounding nonmonetary settlements of class actions,” the Verizon case offered an opportunity “to address present day concerns,” Justice Marcy Kahn wrote.