RadioShack committed the sin of printing credit-card receipts with expiration dates on them, which exposed it to possible liability of $100 a receipt ($1000 if willful), a bankrupting sum. Class counsel settled for coupons. Our clients objected that the settlement did not comply with CAFA's limitations on coupon settlements, and was structured so that class counsel's benefit would outstrip that of the class.
In a unanimous ruling, the court agreed with objector Theodore Frank of the Center for Class Action Fairness that Ware -- who is now retired, so another judge will reconsider the award -- "rubber-stamped" a deal that "structured to obscure actual relief" through Apple's agreement in advance to pay the suing legal firms up to $3 million of the award in attorney's fees and $100,000 in expenses, which the court said "cannot relieve the district court of its duty to assess fully the reasonableness of the fee request."
Thursday, the Ninth Circuit reversed and remanded for consideration under the appropriate legal standards, and was especially critical of the abusive appeal bond.
The Center for Class Action Fairness, in its objection, noted that the settlement seemed designed to discourage consumers from actually collecting anything. While Apple had electronic records of MacBook purchasers who had replaced their power supplies and most of the procedures were online, the lawyers required their clients to submit refund forms in writing.
University of Pittsburgh Law Professor Rhonda Wasserman has a paper on cy pres forthcoming in the USC Law Review, The paper discusses in detail two CCAF cases, In re Baby Products Antitrust Litig., and Marek v. Lane.
We've appealed: we don't think that the Rule 23(e) and Rule 23(h) fairness inquiries are to be done sequentially. NBTY put $6.5 million on the table; class counsel structured the settlement so the class got only a tiny fraction of that money, and ended up costing the class $2.6 million when their excessive fee request reverted to the defendant. We filed our opening brief last week.
The settlement was structured to pay the attorneys double their lodestar but make it difficult for class members to make claims, and few of them did.
For all the plaintiffs' bar talks about "access to justice," many trial lawyers will not hesitate to run roughshod over a class member's right of appeal if they think it will short-circuit a meritorious appeal that would jeopardize an excessive fee award.
In each loss, a Justice has issued a separate statement intimating that the lower court had erred. That’s pretty remarkable.
One hopes that a class member who received a postcard investigates the unfairness of the settlement and retains qualified counsel to object.
