Chronicling the high cost of our legal system
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Before asking a federal judge to grant preliminary approval for a class action settlement with Ameritrade over alleged privacy breaches, make sure that your “client,” the class representative, isn’t going to tell the court he opposes the settlement. In re TD Ameritrade Account Holder Litigation, Case No. C 07-2852 VRW (N.D. Cal.) ($1.87M for the attorneys, coupons for the class.).
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Those of you who remember my earlier posts about the settlement and my brief on behalf of objectors might be interested in seeing the briefs that putatively settling plaintiffs and defendants submitted in support of the settlement.
So as not to clutter Overlawyered with these posts, I have started a new weblog focusing on my class action work. You can also keep up with this work by becoming a Facebook supporter of the Center for Class Action Fairness.
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A rain check on KFC’s hugely popular grilled-chicken offer isn’t good enough, say the class-action-seekers. [L.A. Times/Chicago Tribune via Obscure Store, WSJ Law Blog]
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The lead plaintiff in Alli v. Decker, an ACLU-led class action lawsuit aimed at preventing the deportation of various aliens who commit crimes, turns out to be a conman who played a role in a huge Nigerian-led identity theft scam. Reports the Times:
The news media campaign was all set to go. There was even a Web site ready with a sympathetic profile of Alexander Alli, 49, the man the American Civil Liberties Union had chosen as the lead plaintiff …Court documents tell the story of Mr. Alli’s life before his fall as a familiar tale of immigrant pluck, luck and hard work.
Well, yes, court documents prepared by his lawyers would tend to do that, while tending to downplay or omit the massive identity theft operation in which Mr. Alli was a participant, which extracted more than $50 million by impersonating and victimizing some 30,000 credit card holders: he “admitted to being personally responsible for $70,000 to $120,000 of the multimillion-dollar losses to banks and credit card companies”. Start deporting people like that, and where is our next generation of scam artists supposed to come from? [New York Times, Patrick at Popehat]
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Sean McGinn of Brooklyn, and lawyers seeking class-action status, say Match.com left canceled profiles up, resulting in “humiliation and disappointment” suffered by paying members who sent love-struck missives to the old accounts. [New York Post, Obscure Store, Eric Turkewitz, Above the Law]
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Matthew Heller at On Point News fills in considerable background regarding the “Crunchberries” and “Froot Loops” lawsuits covered earlier in this space.
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Now it’s hit the big blogs: Boing Boing, Althouse, Volokh. RiskProf picks his favorite BoingBoing comments. And at our earlier post, Hal Hewell of Hewell Law Firm, which filed the suit, writes in comments that neither the plaintiff “nor her first amended complaint stated that she believed ‘crunchberries’ was a real fruit,” and I respond.
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Readers may recall our discussion of the Bluetooth Headset class action settlement, which remarkably granted zero to the class while asking for substantial attorneys’ fees. I asked if anyone was interested in objecting, and the response was overwhelming. Today I’ve filed an objection on behalf of seven clients.
There were more objectors out there than I could feasibly represent. If you wanted to object, but I was unable to represent you, you can still join this objection. Follow the instructions for notifying the court and attorneys of your objection, and simply state, in addition to your name and address and phone number, that you join the objection of William J. Brennan et al., docket number 107. I won’t be your attorney, but you can have the pleasure of “voting” for the objection I wrote.
And anyone in Los Angeles July 6 who wants to watch the hearing, please join in the fun. I’ve got my plane ticket.
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Who would have dreamed that a protege of Bill Lerach would wind up later copping to a felony rap resulting from ethical infractions? (Wait, don’t answer.)
At a barbershop in 1994, [Cauley] says, he picked up Forbes magazine and saw a profile of Lerach; it was the famous article, where the attorney was quoted as saying, “I have the greatest practice . . . I have no clients.”
Cauley approached Lerach and was soon launched in a thriving class action practice (”His usual way to deal with things was to yell and bang things and threaten,” said a fellow plaintiffs lawyer, Glen DeValerio of Boston.) It came crashing down under revelations that the Little Rock, Ark.-based lawyer took $9 million from clients’ settlements to spend on firm overhead and unrelated investments. [Koppel/WSJ, ABA Journal, interview-based WSJ Law Blog story first, second]
A judge has tossed a California woman’s would-be class action lawsuit, however, finding that a reasonable consumer would not expect the brightly colored balls to be or contain actual berries or fruit. Per Kevin Underhill, Lowering the Bar: “Plaintiff did not explain why she could not reasonably have figured this out at any point during the four years she alleged she bought Cap’n Crunch with Crunchberries in reliance on defendant’s fraud.” More: California Civil Justice (same law firm sued over Froot Loops); update from Lowering the Bar.
And: Hal Hewell of Hewell Law Firm, which filed the suit, writes in comments that neither the plaintiff
nor her first amended complaint stated that she believed “crunchberries” was a real fruit (check it out on Pacer, along with our motion for reconsideration to get the full story). Your contention that she did is simply false and has exposed her to widespread (and unwarranted) ridicule.
Don’t let the facts get in the way of a good story…. You owe her an apology.
My response: Okay, let’s try to phrase things in a way highly favorable to Hewell and his client. The suit sought recovery against the cereal maker on the grounds a reasonable consumer would understand “Crunchberries” to contain actual fruit, whereas they apparently in fact contain only a little strawberry juice concentrate. (I’ve slightly expanded the first sentence above accordingly). In reaching his conclusion that the only course consistent with “personal responsibility and common sense” was to dismiss the case, the judge found it significant that it is common knowledge that no fruit known as a “crunchberry” grows wild or occurs naturally in any part of the world. Any reasonable consumer would therefore understand that the brightly colored balls must be a composite of ingredients not including that fictional berry, and (the judge found) could not reasonably claim to have been deceived by the monicker “CrunchBerries” into expecting something with more actual fruit content. Perhaps Mr. Hewell’s motion for reconsideration (PDF) will persuade the judge otherwise, and if so, I look forward to reporting that. (Update Jun. 15: judge denies reconsideration).
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Lawyers labored so hard to produce this marvel, only to find the judge dismissing it as “verbose and disordered”. [California Civil Justice]
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This fall, I had the honor of being elected to the American Law Institute—along with Point of Law blogger Michael Krauss and CL&P blogger Brian Wolfman.
Next week, the ALI has its annual meeting in Washington. Of critical importance is the May 20 vote on amendments and the Final Draft of its Principles of the Law of Aggregate Litigation—a document that could be of great influence in the way courts think about class actions. Beck and Herrmann have a must-read post detailing the issues involved. And they note that ALI is a nose-counting organization: policy is made by those that show up. If members of your law firm or university are ALI members, please pass along the post to them.
Per Free Refills America, “the only thing better than winning a lawsuit is winning a lawsuit you didn’t even know about. God Bless America!” (via Karlsgodt).
Freelance journalist Dan Slater in the NYT’s “Dealbook” (via Above the Law) spies a “bailout for the plaintiff’s bar”:
…settlements resulting from the scores of shareholder suits against TARP entities will stretch into the stratosphere.
Sure, through TARP, taxpayer money may be used to pay off mortgages and fund bonus pools. But, in what will amount to a far more expensive proposition, TARP money will also be used to line the pockets of allegedly aggrieved shareholders and the lawyers who, wrapped smugly in the flag of corporate governance, are in the process of making a billion-dollar cottage industry out of filing strike suits.
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Paul Karlsgodt wonders how we arrived at a system in which consumer behavior that would ordinarily be considered eccentric at a near-Grey-Gardens level — such as saving receipts from the purchase of supermarket chicken years in the past — becomes an important determinant for entitlement to compensation. More on water-in-chicken class action: March 15 (cross-posted from Point of Law).
Last year, Overlawyered was the first to report that Judge William Acker in the Northern District of Alabama had held the Fair and Accurate Credit Transactions Act (FACTA), which provides unlimited damages of $100-$1000 per violation for trivial technical violations of printing too many numbers on a credit card receipt, unconstitutional. Other judges have refused to follow his lead, and last week the Eleventh Circuit reversed the decision, rejecting the facial challenge to the statute, but leaving open the possibility that the statute would be unconstitutional as applied in a particular case. (Harris v. Mexican Specialty Foods, No. 08-13510; h/t R.M.)
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Overlawyered readers may remember the problem of FACTA lawsuits when a poorly drafted federal law led to attorneys seeking $1000 for every occasion when a credit-card slip showed an expiration date.
Stroock & Stroock’s Daniel A. Rozansky and Scott M. Pearson have an op-ed in today’s San Francisco Chronicle discussing problems with a similar California law. California prohibits businesses from requesting or requiring “personal identification information” while accepting a credit-card payment; this includes address and phone number, but doesn’t specify what else. Entrepreneurial trial lawyers are asking courts to hold that it includes harmless information like ZIP codes: since the statute provides for $1000/violation damages in the absence of a showing of harm without a cap, extortionate lawsuits are easy to create–and a further drag on the already-suffering California economy.
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Point of Law Volokh