“We’re very pleased – we’re doing this to play traffic cop and make the law better,” Frank said. “The class attorneys have a fiduciary responsibility to their clients, but a lot of attorneys prefer to just negotiate settlements where they get all the money and their clients get imaginary relief.” Far too often, Frank said, judges rubber stamp such settlements.
On Friday, Frank and lawyers from Baker Hostetler filed a petition for a writ of certiorari at the U.S. Supreme Court, asking the justices to review the 9th Circuit Court of Appeals’ approval of a $9.5 million settlement of class action allegations that Facebook’s now-dismantled “Beacon” program violated users’ privacy by revealing their online purchases.
Thanks to the Center’s objection, the parties negotiated a new settlement providing the class with more than $3 million additional recovery.
Instead, the lower court "estimated the 'ultimate value' of the settlement to the class at roughly $1.5 million," Smith wrote, noting that it recognized "that it would be improper to award fees that outstrip the calculated class benefit."
The Center’s client objected to a settlement over Southwest drink coupons given to “Business Select” passengers as a perk. Thanks to the Center’s involvement in the case, in 2017 the parties agreed to a resolution providing class members triple the recovery than would have been provided under the 2012 settlement agreement.
The biggest target of Frank’s ire, however, are settlements that award what he sees as excessive legal fees to the plaintiffs attorneys. He’s currently challenging the proposed $590 million settlement of a class action brought in 2008 on behalf of Citigroup Inc. shareholders who accused the financial giant of misleading investors about the risks of its derivative business.
“The settlement has resulted in a troubling, and, according to counsel for the parties, surprising allocation of the settlement fund,” the judges said. “Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite.”
Fewer than 20,000 class members have bothered to go through the arduous claim procedures in the Bayer Corp. class action, which caps recovery for most of those class members at $4 unless they saved several-year-old receipts for aspirin products. The class will ultimately receive well under $500,000.
As a result of the Center’s objection, the parties modified the settlement to increase direct payments to the class by over $5.8M. Our second objection resulted in a third-party recipient of settlement funds that better suited the purpose of the litigation.
The Center for Class Action Fairness objected to and then appealed the approval of a nationwide class settlement where 0.2% of the class received a cash benefit, a total of $225,000, and the remaining class members received low-value coupons. In the same settlement, $8.85 million went to the plaintiffs' lawyers and $3 million to local San Diego universities.
,_N401WN_-_LAX_(24891087549).jpg){kind=link}
