Grand Theft Auto: Class Action – the argument

by Ted Frank on June 26, 2008

By popular demand, here is my first-hand account of arguing at yesterday’s Grand Theft Auto fairness hearing:

Of course, it’s a pain in the butt for an objector to show up in court. I had laid out $700+ in expenses plus a weekend spent writing a brief to get to this stage. Then, the drive to New York cost a small fortune in tolls and gas, even in my Prius. I then chose my parking garage poorly, so that was another $40.

All this over a game I spent $49.99+tax on that isn’t even worth a buck if I tried to sell it on Ebay. And there’s no official or formal mechanism for me to recover any of that expense (see ¶ 16). So for at least one time in the history of Overlawyered, I can say that a court appearance really is not about the money. And it’s perfectly understandable that no one else wants to bother to object: there’s nothing in objecting for them. But had I not shown up, the settlement had a very good chance of being rubber stamped, and there would be no appellate review.

Judge Shirley Wohl Kram was born in 1922. She calls the court to order a bit after the 10:30 scheduled starting time. The special master, a Howrey attorney, reports on the elaborate procedures used, at a cost of over $800,000, to provide notice and determine the appropriateness of the 2700 or so claims, and announces a distribution of about $20,000 in cash to class members. The special master, a former clerk of Judge Kram’s, will receive $485/hour for his work at Take Two’s expense.

After some hubbub over whether I am sure that I want to represent myself pro se, the judge suggests to me (perhaps after the hinting of the plaintiffs’ filings) that my brief was late, but she’ll let me argue. I quietly point out that Local Rule 6.1(b)(2) permits a response to a motion within ten business days, and mine was filed within nine business days, so there can be no issue of lateness. I briefly outline my arguments, note that the plaintiffs’ reply brief makes all of the arguments for the fairness of the settlement in terms of its fairness to the subclass of allegedly offended-and-upset class members rather than the ten-million-member class that they’re asking certification of, note that the original claim was for over a billion dollars, and ask that the plaintiff’s attorney be required to state whether they think they have a meritorious case. If they have a meritorious case (as they claim once again in Wednesday’s New York Times), they have no business settling it for $20,000, and the settlement must be rejected; if, on the other hand, they want to represent to the court that a $20,000 settlement is fair because the lawsuit they brought has less than a 0.01% chance of success, then perhaps Rule 11 sanctions are appropriate, rather than attorneys’ fees.

I offer to answer questions; there are no questions. This means one of two things:

  1. The judge is sympathetic to my argument and doesn’t feel the need to test it; or
  2. The judge thinks my argument is so far beyond the pale she doesn’t want to waste any more time on this than she has to.

I’m cautiously optimistic that it’s the first, because the judge asked the settling attorneys to address three questions, which I paraphrase:

  1. What does the small number of claimants say about the merits of the case and the fairness of the settlement?
  2. What are we to make about the fact that claims were limited to those who were “upset and offended”?
  3. How should the charitable donation to ESRB relate to attorneys’ fees and the fairness of the settlement?

All of these were raised in my brief.

Plaintiffs’ attorney Seth Lesser makes his case. Of course the people who are most offended should get money that the unoffended don’t get, because they’re the most injured he says, but doesn’t that contradict the idea that this is a unified class meriting certification? I think he never quite addresses the issues I raise, but, then, that’s my confirmation bias. Judge Kram gets audibly impatient with Lesser towards the end of his defense of the charitable donation, telling him to make his point. Defense attorney Jeffrey S. Jacobson notes that if the settlement is not approved, they go back to litigating class certification. Of course, the defendants may well want that at this stage, having already laid out $800k on a special master and settlement administration: between the settlement agreement in November and today, the Second Circuit decided McLaughlin v. Philip Morris USA, which would seem to imply that a class certification would be inappropriate.

I respond and note that the $800k+ being donated to ESRB benefits the defendant as a means of promoting video games to concerned parents and forestalling demands for federal regulation, and should not be attributed to the class. I also express concern that the court has bifurcated the consideration of attorneys’ fees from the consideration of the fairness of the settlement–the fees issue and request for a contingent fee several dozen times the class recovery is integral to the fairness of the settlement. I cut myself short before Judge Kram gets impatient with me, too.

Judge Kram takes the matter under advisement, and we’ll know more when we know more. As Mr. Lesser noted to me in the post-hearing pleasantries, whoever loses will be appealing to the Second Circuit.

Elsewhere: the WSJ Law Blog covers, and the standard sock-puppets of the trial bar leave three similar puerile insults within four minutes in the comments; American Courthouse; Bonez; Techdirt (“So, once again, we have a situation where a class action lawsuit basically just moves a bunch of money to some lawyers, rather than doing anything useful.”); GamePolitics; TG Daily; GameStooge; 1Up; Switched; Reason Hit & Run (who ignored me when I shopped the story to them first, but thought it notable when the NY Times covered it); The Game Reviews; Almost Diamonds; Gaming Today; Wired (which sloppily gets basic facts wrong); CNet; Dvorak; News of the Weird Daily; Forbes Digital Download; Prettier than Napoleon. And Fleshbot, but they don’t mention my name.

Slashdot has a lengthy comment thread (that somehow gets tied up in an argument over the other hot-coffee lawsuit, complete with people parroting the trial-lawyer propaganda). One commenter admits committing perjury to collect a $35 settlement that he used to buy GTA IV.

{ 2 trackbacks }

Class Action Blogosphere Weekly Review « ClassActionBlawg.com
07.02.08 at 1:05 am
Grand Theft Auto: Class Action - the denouement
07.31.08 at 8:29 pm

{ 14 comments }

1 shg 06.26.08 at 8:43 pm

You have a Prius? I never thought of you as a tree-hugger, Ted.

2 Ted Frank 06.26.08 at 8:59 pm

Tree-hugger nothing, I get tax breaks for owning an inexpensive and cool car with hella torque.

3 Eric Turkewitz 06.26.08 at 10:04 pm

A tip of the hat to you for putting your money where your mouth is and taking the time to get to court and stand up in court and argue the case. I say that without regard to the underlying merits.

A lot of lawyers who shoot their mouths off would never be able to find the courthouse.

4 Ted Frank 06.26.08 at 10:12 pm

Funny you mention that, as I had some trouble finding the courthouse. I was misled by the giant columned building labeled “U.S. Courthouse” that wasn’t the U.S. courthouse.

5 Eric Turkewitz 06.26.08 at 10:42 pm

Well, there are at least eight courthouses downtown in spitting distance of each other. Sometimes you can’t tell the courthouses without a scorecard.

6 Jason Barney 06.26.08 at 10:59 pm

Eric, is there something wrong with Ted’s objection? ["I say that without regard to the underlying merits."] Just wondering.

BTW, I am a repeat consumer of the GTA franchise and believe this litigation is an ongoing joke.

7 Eric Turkewitz 06.26.08 at 11:10 pm

Eric, is there something wrong with Ted’s objection? ["I say that without regard to the underlying merits."] Just wondering.

I haven’t read the briefs and am not familiar enough to comment on the substance.

8 Jason Barney 06.26.08 at 11:29 pm

Got it. It sounds like general unfamiliarity with the proceedings in general–not dissing Ted’s objection in particular. Fair enough. Thanks for responding.

9 shg 06.27.08 at 6:35 am

Eric, tell Ted the truth. We hide 500 Pearl in the back to keep the out-of-towners off our turf. That other big buiklding with the columns that says “U.S. Courthouse” out front is just a dummy facade to fool the masses.

10 Todd Rogers 06.27.08 at 2:59 pm

I hope you saved your receipts and, like a good libertarian (or something akin to one), will reduce your taxable income by the appropriate and legal amounts allowed under the current 60,000+ page tax code.

11 jim 06.27.08 at 4:39 pm

the courthouse “out front” is the original us courthouse at 40 centre st., foley square, designed by the renowned cass gilbert. it is currently undergoing renovation and all judges are doubled up at the new federal courthouse at 500 pearl street.

12 VMS 06.27.08 at 8:27 pm

40 Centre Street a/k/a 40 Foley Square is home to the Second Circuit and a handful of District COurt judges that choose to stay there rather than move to 500 Pearl Street. As Jim points out, it is currently under renovation and all the judges and the 2d Cir. are relocated to 500 Pearl.

Ted, you should have given some advance notice of your oral argument. I may have taken the time to see you argue.

13 Ted Frank 06.27.08 at 11:24 pm
14 DUDE 08.05.08 at 3:27 pm

I think you should focus more on special master issue. Is this not a conflict of interest. Judges are supposed to avoid appearance of impropriety.

There is more to this story than we know.

This case should never have been preliminarily approved.

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