Ted Frank, founder of the Center for Class Action Fairness, had objected to the Bluetooth settlement and argued the successful appeal. The law is clear that the Dry Max settlement should also be rejected, and his organization will appeal if it isn’t, he said.
The decision provides yet more evidence that the real problem with these settlements lies with the judges who approve them. Class-action lawyers are peddling absolution to their targets: In exchange for a settlement that includes lucrative fees, they can obtain a court decree ending the possibility of any further litigation over the same claims.
The objectors then appealed to the 9th Circuit, which reversed and vacated the settlement."We agree that the disparity between the value of the class recovery and class counsel's compensation raises at least an inference of unfairness, and that the current record does not adequately dispel the possibility that class counsel bargained away a benefit to the class in exchange for their own interests," Judge Michael Daly Hawkins wrote for the unanimous three-judge panel sitting in Pasadena.
"We got a very good ruling about the importance of these issues," Frank said. "There are a lot of settlements structured like this, and we got a very firm ruling from the Ninth Circuit that this is a problem."
We are mystified how the plaintiffs intend to justify the settlement; perhaps they will contend that the $10 discount "certificates" issued to the class are not coupons. The attorneys and class representatives are asking for $1.46 million without even an attempt to predict the redemption rate of these certificates.
The Center’s clients objected to this settlement over car rental fees wherein plaintiffs’ lawyers sought $1.5M for themselves but only coupons for the class; the court rejected the settlement.
An opinion by Chief Justice John Roberts expressed concerns over the practice of cy pres, acknowledging the need for the Supreme Court to address the issue in a future case.
The Ninth Circuit held that the Class Action Fairness Act requires that when class members obtain coupons in a settlement, the lawyers’ fees attributable to those coupons must themselves be based on the value of coupons that are redeemed.
The Center’s client objected to a settlement over deceptive advertising that promised over $1M to plaintiffs’ lawyers and about $100,000 to the class. The court upheld the objection, eventually reducing the plaintiffs’ lawyers’ fees and sanctioning them for abusive litigation tactics.
This settlement over email advertising inappropriately channeled settlement funds to third parties unrelated to the class. The Ninth Circuit sustained the Center’s objection and reversed the district court’s approval of the settlement.
