“Proposed Facebook Settlement Comes Under Fire”

by Ted Frank on March 1, 2010

The March 2 Wall Street Journal (link dead after 7 days) covers all-for-charity-none-for-the-class “cy pres” settlements of Facebook and AOL—the latter of which was the subject of a Center for Class Action Fairness objection:

Late last year, in a class action claiming that tech giant AOL LLC improperly inserted footers in its users’ emails, Los Angeles federal judge Christina Snyder awarded $25,000 in settlement funds to a Los Angeles legal-aid organization that has the judge’s husband on its board. …

The Virginia-based [sic] Center for Class Action Fairness objected, claiming the settlement raised a conflict of interest. Ted Frank, president of the group, said that to avoid potential conflicts, it would be better to require unclaimed settlement funds to be deposited into state coffers. “The problem is that parties can now give money to a judge’s preferred charity in the hopes that it will prompt the judge to rubber stamp a settlement,” he said.

{ 1 comment }

1 Amy Alkon 03.02.10 at 3:03 am

Yay, Ted!

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