Class members and CCAF attorneys Ted Frank and Melissa Holyoak take their objection to Google search settlement to the Supreme Court. The settlement provided $0 to class members, but divided $8.5 million between the plaintiffs’ lawyers and third party cy pres recipients.
This blog post was published when the Center for Class Action Fairness was a project of the Competitive Enterprise Institute. The Center for Class Action Fairness (CCAF) has long opposed abusive “cy pres” settlements that benefit third-party beneficiaries instead of compensating class members; Ted Frank wrote about the issue in 2008 before founding CCAF, and Ted Frank has testified to Congress concerning cy pres settlements. As Reuters reporter Alison Frankel wrote after CCAF’s win in the Eighth…
The Center for Class Action Fairness objected to and then appealed the approval of a nationwide class settlement where 0.2% of the class received a cash benefit, a total of $225,000, and the remaining class members received low-value coupons. In the same settlement, $8.85 million went to the plaintiffs' lawyers and $3 million to local San Diego universities.
CCAF objected to the fees in a securities class action in which class counsel sought an outsized percentage of the $590 settlement fund. Ultimately, the parties agreed to waive their cy pres provision in favor of distributing more money to class members.
As a result of CCAF’s objection, more than $2.3 million was distributed to class members instead of unrelated organizations. The parties had originally requested that these dollars be awarded to organizations unrelated to the litigation, a practice known as cy pres.
This settlement over email advertising inappropriately channeled settlement funds to third parties unrelated to the class. The Ninth Circuit sustained the Center’s objection and reversed the district court’s approval of the settlement.
