Instead, the lower court "estimated the 'ultimate value' of the settlement to the class at roughly $1.5 million," Smith wrote, noting that it recognized "that it would be improper to award fees that outstrip the calculated class benefit."
The biggest target of Frank’s ire, however, are settlements that award what he sees as excessive legal fees to the plaintiffs attorneys. He’s currently challenging the proposed $590 million settlement of a class action brought in 2008 on behalf of Citigroup Inc. shareholders who accused the financial giant of misleading investors about the risks of its derivative business.
One of the leading ways for self-dealing class counsel to benefit themselves at the expense of the class is through what are called cy pres settlements.
“The settlement has resulted in a troubling, and, according to counsel for the parties, surprising allocation of the settlement fund,” the judges said. “Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite.”
“If Facebook is already giving money to these charities, then this isn’t a “$10 million settlement,” it’s just a change in accounting entries,” he said.
The Center for Class Action Fairness LLC announced today its victory in the U.S. Court of Appeals for the Third Circuit objecting to a class action settlement that arbitrarily froze out over a million class members from meaningful recovery while paying the attorneys over $9.2 million.
Frank's wins include a 9th U.S. Circuit Court of Appeals ruling that tossed a settlement of a case against Bluetooth headset manufacturers who allegedly didn't give prominent enough warnings about hearing loss. Consumers would have gotten no cash, and plaintiffs' attorneys would have gotten $850,000.
He has already picked up some wins, including a significant ruling in August in a class action against Plantronics and the company formerly known as Motorola Inc. concerning Bluetooth headsets. The Ninth Circuit rebuffed a deal that would have paid no money to class members but would have given $100,000 to four nonprofit groups dedicated to hearing loss and $850,000 to the plaintiffs’ lawyers. The lawyers are now back in the lower court, trying to hash out a new deal.
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 Center for Class Action Fairness announced today its victory in the U.S. Court of Appeals for the Ninth Circuit objecting to a valueless class action settlement.
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