CCAF challenged strike suit that provided meaningless disclosures, prompting Seventh Circuit to adopt “plainly material” standard in order to approve such settlements. “Strike suits affect over 97 percent of mergers, costing businesses millions. We hope other courts follow Delaware and the Seventh Circuit in taking steps to shut down this racket.”
CCAF is concerned the Judicial Panel will not consider judicial track records in scrutinizing the fairness of settlements when deciding who to transfer the case to.
CCAF objected to the settlement that would pay class counsel $2 million and would leave the class members with nothing but valueless labeling changes on a product defendant was no longer selling.
The terms of the deal provided a $10 million fund to class members that, in reality, is unlikely to be exhausted, gave class counsel a disproportionate $6.75 million fee, and left a large subclass of class members with zero recovery.
The Ninth Circuit declined to find that an intraclass conflicts that preclude a finding of adequate representation. That said, the district court reduced class counsel's request for attorneys' fees and expenses by over $5.1 million, for the benefit of the class.
In a false advertising case, the Center objected to the settlement that gave class counsel $4.75M because it was based on an exaggerated value ($18.5M) of unidentified labeling changes. The district court approved the settlement, but reduced the fee request by $1.2M. The Center did not appeal.
The Center for Class Action Fairness successfully objected to the settlement of an antitrust case where the class would only receive injunctive relief of uncertain value while class counsel seeks $75 million in fees.
(Reuters) - A federal district judge abused her discretion in awarding a nonprofit money left over from a $490 million securities class-action settlement concerning the 1998 merger of BankAmerica and NationsBank that created Bank of America Corp, a divided federal appeals court ruled on Thursday.
Judge Posner agreed with little of what the lower court determined, but he found the trial judge's refusal to consider the cy pres amount in calculating the class benefit correct "for the obvious reason that the recipient of that award was not a member of the class."
Posner, ruling in favor of objectors in Pearson v. NBTY, outlines a series of conflicts and deceptions that any class-action lawyer worth her salt would sue over in an instant. But in this case it was the lawyers who perpetrated them, with the help of a judge who was all too willing to overlook the economic realities of the consumer class-action business.
