FOR IMMEDIATE RELEASE
MADISON, Wisc.— HLLI’s Center for Class Action Fairness objected on behalf of a class member to a $3 million fee request in Todd v. Ashley Furniture Industries, a class action settlement over the use of fiberglass as a fire retardant in mattresses.
The settlement touts $9 million in compensation but that figure is illusory. Class members receive no cash, instead getting “vouchers” that expire after one year and that can be spent only at four of Ashley Furniture’s websites. Plaintiffs attorneys asked for $3 million in fees to be awarded at the settlement hearing based on the face value of the coupons, before anyone knows how much of the voucher fund will ever be redeemed.
HLLI’s objection, filed on behalf of class member Kyle Painter, argues that the vouchers are “coupons” under the Class Action Fairness Act, which requires that fees in coupon settlements be based on the value of redeemed coupons by the class. Attorneys should not be paid in cash while their clients get coupons.
HLLI identified several issues with the settlement.
- The attorneys’ briefing employed the wrong legal standard in analyzing the coupon settlement, which the Court then adopted in approving notice to the class.
- The vouchers may be worse than nothing to some class members. Defendants routinely advertise site-wide discounts that cannot be applied with another discount. A class member who uses their settlement voucher may therefore forgo a larger everyday discount while permanently releasing his or her claims.
- The settlement pays the lawyers a 25% fee on the assumption that all class members will redeem their coupon. But redemption rates in coupon settlements are often in the low single digits.
HLLI asked the Court to defer any fee award until after the one-year voucher period expires, when the Court can award counsel a reasonable percentage of what the class members actually received from their vouchers. This approach keeps class counsel invested in a fair redemption process rather than a quick payday.
Painter’s objection is scheduled for a September 24 fairness hearing before Judge William M. Conley of the U.S. District Court for the Western District of Wisconsin in Madison.
The case is Todd v. Ashley Furniture Industries, LLC, No. 3:24-cv-00615 (W.D. Wisc.).
Contact:
Ted Frank, Senior Attorney
(703) 203-3848, ted.frank@hlli.org
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