Posts Tagged ‘class action settlements’

Target data breach class settlement

The Target Corporation’s settlement of class action litigation over a major consumer data security breach is not as groundbreaking as all that, and in particular falls far short of the enormous liability payouts that were being talked of for a while [Paul Karlsgodt; Minnesota Public Radio] It does however feature attorney’s fee payouts “not to exceed $6.75 million, which is on the high end of the historical range” [Paul Bond, Lisa Kim, and Christine Czuprynski, Reed Smith] Earlier here.

Posner: “selfish deal” by class counsel resulted in “outlandish” fees

“Judge Richard Posner of the Seventh Circuit Court of Appeals has unleashed another zinger at class-action attorneys, trashing a settlement over joint-pain pills that would have paid attorneys $2 million in fees, more than double what their clients got.” [Daniel Fisher, Forbes, whose own writing gets cited; opinion in Pearson v. NBTY] From the ABA Journal:

The opinion was a victory for Ted Frank of the Center for Class Action Fairness, who objected to the settlement as a class member. He told the Am Law Litigation Daily he will be citing the case in new objections to class-action settlements. So far, he says, his group has persuaded courts to wipe out $271 million in attorney fees in the 39 cases in which the center achieved some success.

“This is the best opinion out there” on class settlement issues, Frank told the Litigation Daily. “I think it will have a dramatic effect on class action settlements negotiated.”

October 10 roundup

October 3 roundup

  • Posner smacks lawyers, vindicates objectors in Radio Shack coupon settlement [CCAF, Fisher, more]
  • “Germany To Consider Ban On Late-Night Work Emails” [Alexander Kaufman, Huffington Post]
  • 7th Circuit overturns Wisconsin John Doe ruling, sends back to state judges [Milwaukee Journal-Sentinel, ruling; more, Vox] John Doe case prosecutor John Chisholm, via columnist Dan Bice, strikes back against source in office who talked to Stuart Taylor, Jr. [Taylor, Althouse]
  • Trial lawyer/massive Democratic donor Steve Mostyn also dabbles in Texas Republican primaries [Robert T. Garrett, Dallas Morning News; Mostyn’s national spending from Florida and Arizona to New Hampshire and Minnesota]
  • Sad: immigration lawyer known for Iraqi Christian advocacy faces asylum fraud charges [Chicago Tribune]
  • Might have been entertaining had Bruce Braley opponent Joni Ernst in Iowa argued in favor of nullification, but that’s not what evidence shows [Ramesh Ponnuru]
  • California hobbles insurers with diverse-procurement regulations [Ian Adams, Insurance Journal]

Posner tosses “scandalous” settlement: lawyers “sold out” clients

“A federal appeals court has rejected an ‘inequitable — even scandalous’ class-action settlement, removed the lead lawyer and reinstated ‘defrocked’ lead plaintiffs who had objected to the deal.” The ruling, involving a class action against the Pella Corp., window manufacturers, is another triumph for Ted Frank, former contributor to this blog and now a prominent objector through his Center for Class Action Fairness. [ABA Journal, Chicago Daily Law Bulletin (“attorneys would receive $11 million in fees while their clients would get, at most, $8.5 million — and likely much less”)]

“A smoking gun in debate over consumer class actions?”

Information hardly ever gets onto the public record about what percentage of notional claims are actually redeemed following a class action settlement, which means there’s generally no way to evaluate participants’ forecasts of robust redemption rates (these forecasts help support not only large fee requests by lawyers in the case at hand, but also the general repute of the class action mechanism as one with genuine benefits for class members — the “consumers win $30 million” sorts of headlines). One class of people who do know a lot about this question are settlement administrators, those who manage the mostly obscure private firms set up to handle payout requests as they come in. But they don’t talk to the press.

That’s why a declaration submitted last month in a false-labeling class action involving Duracell batteries is so tantalizing. … defense lawyers at Jones Day submitted a declaration from Deborah McComb, a senior consultant at Kurtzman Carson Consultants, a settlement administrator. KCC is administering the Duracell settlement, and the point of McComb’s declaration is that the rate of claims in this case is consistent with what KCC typically sees in similar settlements that have received final approval.

McComb provides some hard numbers to support the point — and this is why the declaration is significant. KCC, she said, has administered hundreds of consumer class actions in which class members received notice indirectly rather than directly through the mail. These cases “will almost always have a claims rate of less than 1 percent,” she said.

In fact, the “median claims rate for cases in the KCC analysis” was .023 percent, far lower than 1 percent. The Duracell settlement was said to be worth $49 million, including a stated $6 million to charity, but the amount headed to class members was likely going to come in below $345,000. Class actions with mail notice to class members may perform somewhat better — it’s hard to know how much so — but these revelations tend to back up reformers’ belief that where dollar amounts per claimants are not large enough to justify the time and trouble of redemption, the great majority of redistribution will go on for the benefit of lawyers and other middlemen. [Alison Frankel, Reuters; Daniel Fisher, Forbes]

May 15 roundup

  • “Sign Installer Cited for Violating Rule on the Sign He Was Installing” [Lowering the Bar, Santa Barbara]
  • YouTube yanks exhibit from public court case as terms-of-service violation. How’d that happen? [Scott Greenfield on controversy arising from doctor’s lawsuit against legal blogger Eric Turkewitz]
  • Philadelphia narcotics police scandal (earlier) has an alleged-sex-grab angle; also, given the presence of compelling video clips, shouldn’t the story be breaking out to national cable news by now? [Will Bunch, Philadelphia Daily News; Barbara Laker and Wendy Ruderman, PDN 2009 Pulitzer series, on Dagma Rodriguez, Lady Gonzalez and “Naomi” cases]
  • The most dynamic part of the economy? Its endangered “permissionless” sector [Cochrane] Call it subregulatory guidance, or call it sneaky regulation by agencies, but either way it can evade White House regulatory review, notice and comment, etc. [Wayne Crews, CEI “Open Market”]
  • What’s Chinese for “Kafkaesque”? Dispute resolution in Sino-American contracts [Dan Harris, Above the Law]
  • In another win for Ted Frank’s Center for Class Action Fairness, Ninth Circuit reverses trial court approval of Apple MagSafe settlement [CCAF]
  • Mississippi’s major tort reform, viewed in retrospect after ten years [Geoff Pender, Jackson Clarion Ledger]

March 20 roundup

  • Sue the NYC welfare department enough, and Mayor De Blasio might make you its chief [Heather Mac Donald, City Journal] Cozy relations between nonprofits and Gotham administration dodge accountability [Steven Malanga, same]
  • Consumer objects to Muscle Milk class action settlement, and there’s a Ted Frank angle [Above the Law]
  • Asking employees whether they’re disabled suddenly mandatory rather than forbidden [WSJ, earlier]
  • “…not trying to tell you how to live your life, I’m just suggesting that it’s a bad idea to put sharp or explosive objects in your…” [Lowering the Bar]
  • “Carnival cruise passengers sue seeking $5,000 a month for life” [Reuters]
  • Husbands could sue noncompliant wives: “UAE law requires mothers to breastfeed for first two years” [Guardian]
  • New symposium on “The State, The Clan, and Individual Liberty” with Mark S. Weiner, Arnold Kling, Daniel McCarthy, and John Fabian Witt [Cato Unbound]

Class action roundup

  • Whichever way high court rules in Hood v. AU Optronics, new Fifth Circuit decision will fuel parens patriae actions by AGs in state courts [Alison Frankel, earlier]
  • Justice Alito blasts federal district judge Harold Baer for insisting on race quotas for class action lawyers [Michael Greve/Liberty Law, Tom Goldstein/SCOTUSBlog]
  • “Unfortunately, even if SCOTUS does away with fraud on the market, plaintiff lawyers will still bring omission cases” [Bainbridge, earlier]
  • Ted Frank’s adventures, as documented at Point of Law [Pampers Dry Max (earlier), L’Oreal salon hair products, Korean Air, Wyeth]
  • Does it cost too much to provide class action defendants with due process? [Andrew Trask] Related on Mark Moller’s work [same] Should class actions be understood as creating trusts? [same]
  • Avery v. State Farm billion-dollar aftermarket-parts class action seeks RICO resuscitation, in Monty Python echo [Chamber-backed Madison County Record]
  • If you didn’t know distinguished proceduralist Arthur Miller as a Milbergian, you might detect it from his writing [Trask]