Rougvie v. Ascena Retail Group

Docket number: 15-cv-724 (E.D. Penn.)

The Class Action Fairness (CCAF) represented two class members objecting to the class action settlement arising out of fake “sales” at Justice stores. The settlement would unacceptably allow class counsel to capture 50% of the concrete settlement benefit, leaving most class members with nothing other than a coupon subject to severe usage restrictions.

On July 29, 2016 the U.S. District Court for the Eastern District of Pennsylvania ruled in Ascena v. Rougvie 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.

At the conclusion of the coupon redemption period, the objectors CCAF represents moved to disgorge pay-offs that had been made to self-interested so-called “professional objectors.” In response, the district court ordered the other objectors to disclose their agreements, revealing they were collectively paid $332,000 just to dismiss their 2015 appeals, with no improved benefit to class members as the CCAF objection provided. For this reason, the “objector blackmail” payments should be disgorged from the professional objectors so that this money can be distributed to class members.

On February 12, 2019, the district court denied the motion to disgorge objector blackmail, although the court stated it was “offended” that the professional objectors “could appeal and receive hundreds of thousands of dollars more than other Class Members.” The court concluded that they “got away with it before the December 1, 2018 amendment to Rule 23(e)(5),” which the court believes will prevent similar objector blackmail in the future. The district court also awarded CCAF $78,000 in attorneys fees for increasing the value of the settlement to class members.

This case was formerly a project of the Competitive Enterprise Institute and now is being actively litigated by the Hamilton Lincoln Law Institute.

Case Documents