“[T]he cacophony created by shoddy objections brought by bad-faith objectors,” the lawsuit states,” interferes with a court’s ability to fairly consider the reasoned good-faith objections brought by the Center.”
In class-action lawsuits the threat of astronomical liability drives many defendants to settle — even if the plaintiffs’ chances of success are negligible. But because there’s only so much money that defendants are willing to spend, such nuisance lawsuits often lead to settlements where the attorneys get more than their fair share. It works like a formula: The plaintiffs’ attorneys and the few named representative plaintiffs divvy up the entire cash proceeds, leaving the remainder of the class with a potpourri of worthless window dressing.
The Center for Class Action Fairness won a victory for consumers when a court in the Northern District of California entered an order this week agreeing with CCAF’s position that more than $2.35 million in uncashed checks in the Online DVD Rental Antitrust Litigation settlement should go to consumers rather than to third-party charities unrelated to the litigation.
A plaintiffs’ attorney and an insurance executive have created a business, Risk Settlements, that offers a “post-lawsuit settlement insurance product specifically designed to manage settlement risk, cap exposure and provide certainty to the uncertain world of class action settlements.” That this business model is viable—and that it purports to save class-action defendants millions of dollars in claims-made settlements—demonstrates the need for courts to provide scrutiny of what class-action settlements actually provide consumers.
This time, the good guys finished first. On August 10, the Seventh Circuit issued its opinion in In Re: Walgreen Co. Stockholder Litigation, No. 15-3799. One by one, Judge Posner dissected each of the six Supplemental Disclosures and held that they offered nothing to the shareholders. Nil. He found that the class action attorneys were inadequate representatives because they were only interested in fees and recommended that the whole case be dismissed.
Today, the Competitive Enterprise Institute’s Center for Class Action Fairness won its challenge to a class action settlement deal related to the merger between Walgreens and Boots pharmacies.
This blog post was previously published on the Competitive Enterprise Institute's Open Market Blog. I really only want to talk about one settlement—the settlement in Rougvie v. Ascena Retail Group, No. 15-cv-724 (E.D. Pa.). Ascena is the corporate owner of the Justice brand clothing franchise, which caters to pre-adolescent girls in 900 stores throughout the country. If you’ve ever walked past what you thought was a Care Bears shrine in your…
Late last week the U.S. District Court for the Eastern District of Pennsylvania ruled that the $14 million fee request by attorneys in a coupon settlement over Justice clothing store sales was excessive under federal law and that only $5.3 million could be currently justified.
“A class member deserves more than a potentially useless date voucher from It’s Just Lunch, which is why we object to the current settlement which awards millions to the attorneys who decided to take up the case and leaves the nationwide class members with nothing,” said CCAF attorney Anna St. John. “Quite simply, the settlement is unfair and the court should reject it.”
Frank told TheDCNF that courts have ways of ensuring “the money gets to the victims,” including “telling the lawyers they don’t get paid if they don’t find” everybody who should be paid. “When the courts hold their feet to the fire, the money gets to the victims,” Frank said.
