Daniel Fisher at Legal Newsline covered the Hamilton Lincoln Law Institute’s objection to the settlement in Rael v. The Children’s Place, Inc., which resulted in an order delaying attorneys fees until after the coupon redemption rate is known.
A federal judge in California approved the settlement of lawsuit against The Children’s Place for allegedly misleading consumers about the value of “sale” items. But U.S. District Judge Gonzalo P. Curiel in California rejected a request from lawyers at Carlson Lynch Sweet Kilpela & Carpenter for $1.1 million in fees and expenses, saying the vouchers and coupons they negotiated for their clients may go largely unused.
The March 31 ruling represents a rare example of a judge enforcing the Class Action Fairness Act, a 2005 law that requires courts to award fees in class-action settlements based upon the value of coupons redeemed, not their theoretical gross value. Otherwise, plaintiff lawyers and the companies they are suing have an incentive to collude on settlements that cost the defendants little more than the cash value of legal fees since only a tiny percentage of consumers ever participate in consumer class action settlements, let alone redeem coupons.
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“These were obviously coupons, and the fact that an attorney could get up with a straight face and claim they weren’t coupons and try to trick a judge in an ex parte hearing without worrying about losing his license shows the problem with the Ninth Circuit’s atextual and ahistorical test in practice,” Frank said, referring to a hearing that was attended only by attorneys supporting the settlement. Frank said his group is fighting a case with nearly similar facts in another federal court in California, “where the judge rubber-stamped a similarly silly claim that vouchers weren’t coupons.”