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.
Ted Frank, a lawyer who also represented a couple in the case, was happy with the court’s decision. He went further to say that the beneficiaries should be the class members, and any settlement should be based on actual recovery and not inflated figures that won’t benefit the class.
The judge allowed the plaintiff lawyers to submit their fee request after the objection period ended, hamstringing objectors including Ted Frank's Center for Class Action Fairness, which nevertheless scored a big win here.
Ted Frank, a critic of what he considers excessive legal fees and who represented a couple opposing the RadioShack settlement, in a phone interview welcomed the decision.
"The big question was this: Why should money belonging to the class members be given to a charity — no matter how much the judge and the class-action lawyers like the charity? The judge in this instance is U.S. District Judge Carol Jackson. The lawyers are from the firm of Green Jacobson."
The judge presiding over a Hewlett-Packard shareholder suit has balked at the $48 million in fees negotiated by attorneys in a settlement. The amount of money that shareholders were going to get was not negligible, unlike some of the consumer suits where the victims get a coupon good for more product from the company they've accused of doing them wrong. But the judge seems to think that it's disproportionally small compared with what the lawyers were getting.
Ted Frank of the Center for Class Action Fairness, representing the objectors, also fought back against HP’s claims that the objections were brought in bad faith. Frank pointed to the existence of the retainer agreement and HP’s opposition to an advantageous motion to decertify the class.
Theodore Frank, of the non-profit Center for Class Action Fairness, has filed a motion contesting the ink jet settlement, seeking to disqualify the Cotchett firm from the H-P inkjet class action settlement. “It’s just a black letter ethical violation,” Frank said in an interview.
“I take no position on whether the size of the settlement fund adequately compensates class members for the value and risk of the litigation,” Frank said. “It does seem like a nuisance settlement, given Capital One's deep pockets, the large potential statutory liability, and the fact that most class members will not receive anything in the absence of a claim, which also militates for a much lower attorney fee. I haven't looked at detail yet whether the notice is acceptable.”
