The Center for Class Action Fairness recommends the court select lead plaintiffs’ counsel through a competitive bidding process among the dozens of attorneys expected to apply.
Today, the CCAF filed a cert petition before the U.S. Supreme Court asking for review of a class action lawsuit settlement in Poertner v. The Gillette Co. The original case centered on a lawsuit over dubious advertising claims made about Duracell batteries. Class counsel structured a settlement that paid themselves $5.7 million, paid a small fraction of class members a total of $344,850, and left over 99 percent of the class with nothing.
Today, the Center for Class Action Fairness petitioned the U.S. Supreme Court to hear a case challenging an abusive class action practice where trial lawyers pay themselves the bulk of the cash recovery ($5.7 million), the class members receive just a fraction of that ($344,000), and the settlement hands out millions to third parties who are not part of the class.
CCAF attorney Anna St. John said, “If awarded in full, the excessive fee requested by class counsel would transfer to plaintiffs’ attorneys tens of millions of dollars that rightfully belong to class members. It’s an all-too-common example of attorneys purporting to represent consumers harmed by unlawful business practices, when in reality these attorneys try to harm those same consumers again by seeking far more than they are entitled to by law.”
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.
We do not contend that a court can never award such a generous hourly rate. But the Seventh Circuit has “held repeatedly that, when deciding on appropriate fee levels in common-fund cases, courts must do their best to award counsel the market price for legal services, in light of the risk of nonpayment and the normal rate of compensation in the market at the time.” We do not believe a sophisticated arms-length transaction would produce this sort of windfall for these sorts of results, and we have appealed, filing our opening brief Monday.
For years, parties have used cy pres—the practice of giving settlement money to charity instead of the class—in abusive ways. When proposed by defendants, cy pres can be used to create the illusion of relief to justify greater attorneys' fees at the expense of the class when in fact all that is happening is that the defendant is changing accounting entries on charitable donations it would have made anyway. When cy pres is used to justify…
(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.
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