Settlement Insurance Shows Need for Court Skepticism in Class Actions

A plaintiffs’ attorney and an insurance executive have created a business, Risk Settlements, that offers a “post-lawsuit settlement insurance product specifically designed to manage settlement risk, cap exposure and provide certainty to the uncertain world of class action settlements.” That this business model is viable—and that it purports to save class-action defendants millions of dollars in claims-made settlements—demonstrates the need for courts to provide scrutiny of what class-action settlements actually provide consumers.

Supreme Court Could End Trial Lawyer Paydays

Frank told TheDCNF that courts have ways of ensuring “the money gets to the victims,” including “telling the lawyers they don’t get paid if they don’t find” everybody who should be paid. “When the courts hold their feet to the fire, the money gets to the victims,” Frank said.

CCAF Challenges Duracell Battery Class Action Settlement, Files Cert Petition Before U.S. Supreme Court

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.

CCAF Asks Supreme Court to Hear Challenge on Duracell Class Action Settlement

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.

A smoking gun in debate over consumer class actions?

 .76 percent of battery buyers filed claims to receive $3 or $6. If all of those claims turn out to be valid, McComb said in the declaration, the settlement fund will disburse $344,850 to class members. But remember: The settlement is supposed to be worth $49 million — the number on which plaintiffs lawyers have based their fee request. Even counting the $6 million in Duracell products that will be distributed to charities if the settlement is approved and the injunction against false labels the defendants agreed to, there’s an awfully big gap between the alleged value of the deal and the actual cash benefit to the class.

Poertner v. Gillette Co.

CCAF objected in Poertner v. Gillette Co., a settlement of consumer fraud claims over Duracell batteries where the attorneys received $5.7 million and the class only $0.3 million, and appealed it to the Supreme Court, which unfortunately declined to review the case. CCAF’s objection, however, led class counsel to admit that the vast majority of consumer fraud settlements leave more than 99% of class members uncompensated.

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