CCAF objected Thursday to an unfair settlement that leaves class members with virtually nothing, their attorneys with over half of the settlement fund - $1.35 million - and most remaining funds to an unrelated organization.
CCAF represented an objector to a settlement over allegedly mislabeled food that proposes to pay class counsel over half the settlement fund, $1.35 million ($2593/hour), while ensuring that the class receives virtually no benefit.
A Massachusetts federal judge credits the Center for Class Action Fairness with helping him "evolve" his thinking on a complicated and controversial class action case.
As in the overwhelming majority of strike suits, the settlement in Gordon v. Verizon did not provide any monetary relief to shareholders. Instead, it provided immaterial supplemental disclosures and corporate governance change. Due to CCAF's objection, the court awarded a reduced amount of $1.5 million in fees and expenses.
“It’s ironic, because any corporation caught telling investors something this misleading would surely face litigation from Labaton and Thornton,” Frank said after the hearing.
“The settlement was unfair because the attorneys' fees award was grossly disproportionate to the relief actually delivered to the class, Holyoak said. "Before the Center for Class Action Fairness objected, the plaintiffs’ attorneys were to receive $2.11 million, while the class members would have received $412,815 in coupons.”
“The judge is anticipating a real investigatory role for the special master. There’s $2 million in the pot – there’s no incentive to do a brief, perfunctory investigation.”
“This is very serious,” said Frank, a leading national critic of legal fees in class-action lawsuits. “The judge is anticipating a real investigatory role for the special master.”
“Over 99 percent of the Target data breach class gets nothing in this multi-million-dollar settlement, so we are glad that the Eighth Circuit recognizes that the district court cannot rubber-stamp settlements where class counsel cuts corners on procedural fairness so they can get paid quickly and generously,” said Melissa Holyoak, an attorney with the Competitive Enterprise Institute’s Center for Class Action Fairness.
A double billing error discovered by the Boston Globe and Ted Frank evolves into one of the most in-depth inquiries into securities suit billing. An appointed special master discovered undisclosed payment to attorneys who did no work in case, but plaintiffs' counsel tries to retain their $75 million fee. HLLI successfully argued for a reduced fee and defended the fee award on appeal as an amicus.
