With that kind of markup, Tigar said the use of contract lawyers could be considered a profit-seeking scheme. Heimann argued that the work and the overhead costs for staff and contract employees are the same in regard to training, supervision and providing workspaces. Tigar said the law firm wouldn’t contract out staff if it weren’t more profitable.
CCAF successfully represented Prof. Todd Henderson, who objected to a settlement that provides him $4.50 and all class members put together less than one seventh of the $6.85 million attorneys' fee request, premised on a “$27 million” injunction that did nothing.
The decision is a victory for Ted Frank, the litigation director at the Hamilton Lincoln Law Institute and prominent critic of many class-action settlements. Frank said the money awarded to the privacy groups, under a legal doctrine known as “cy pres,” should have gone to class members like himself. He drew support from a bipartisan group of 13 state attorneys general led by Arizona’s Mark Brnovich.
Tigar also set out to address another objection mentioned in Frank’s opposition over a 5% fee allocated to 12 law firms who brought similar cases in Delaware courts. “The gravy train is so heavy that co-lead counsel has agreed to pay law firms that brought other cases even where they provided no common benefit, who represent plaintiffs who lack any colorable claims,” Frank wrote.
CCAF filed an objection on July 11, 2019 arguing that because this is a megafund settlement, any fee award should be significantly less than the 25% benchmark. Plaintiffs' counsel also drastically overstate their lodestar with millions of dollars of work by contract attorneys billed at excessive rates.
Ted Frank, an Akorn shareholder, moved to intervene and object to the fee. Judge Durkin ordered the parties to brief the issue whether he had “inherent authority” to abrogate the settlement in light of the Seventh Circuit’s ruling in the Walgreen case...
The decision is vindication for class action watchdog Ted Frank of the Hamilton Lincoln Law Institute. Frank, an Akorn shareholder, tried to intervene in the litigation in 2017, when plaintiffs’ lawyers disclosed their $322,500 mootness fee in a stipulation asking Judge Durkin to sign an order closing cases voluntarily dismissed by individual shareholders.
Samsung sold top-loading washing machines that sometimes violently vibrate and “explode,” but the settlement provides mostly mail-in rebates to class members. Attorneys should not be able to guarantee a generous fee award for themselves while class members are stuck at best with rebate coupons that require them to buy again from the allegedly negligent defendant. The district court reduced the fee award, but otherwise approved the settlement.
The Hamilton Lincoln Law Institute represents an objector to the settlement of Littlejohn v. Ferrara Candy Co., which pays attorneys $600 to $1170/hour, but provides absolutely nothing to class members in exchange for waiving their monetary claims.
“The circuit split is still there,” Frank said. “They granted cert on it before and the Ninth Circuit is still signing off on some really appalling cy pres settlements.”
