Posts tagged as:

cy pres

Liability roundup

by Walter Olson on October 22, 2014

  • How legal doctrine changes in a state-based system: “The Diffusion of Innovations in Tort Law” [Kyle Graham]
  • Are courts growing (appropriately) disillusioned with cy pres? [James Beck and Rachel Weil, WLF; Beck, D&DL, on Redman v. RadioShack]
  • “Asbestos lawyers want $2.5 million for losing fight to keep Garlock records sealed” [@DanielDFisher on Legal NewsLine report] “Third Circuit rules against plaintiff who ‘just knew’ asbestos was used in Navy vessels” [Heather Isringhausen Gvillo, LNL]
  • Eric Alexander on the runaway $9 billion Actos verdict [Drug and Device Law, citing Dr. David Kessler, former FDA chief, as "plaintiff's mouthpiece"; earlier on Actos/Takeda case]
  • “Third-Party Bad Faith Claims Add $800M to Florida Auto Insurance Costs: IRC” [Insurance Journal]
  • Discussion of proposals to change contributory negligence for bicyclists in D.C., mucho comments [Greater Greater Washington]
  • “Missouri Supreme Court Invalidates State’s Legislative Cap on Punitive Damages” [Mark Behrens]

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June 12 roundup

by Walter Olson on June 12, 2014

  • John McGinnis: As information technology disrupts the legal profession, will lawyers’ clout decline? [City Journal]
  • Law schools, especially of the more leftward persuasion, collecting millions of dollars in cy pres lawsuit diversions [Derek Muller]
  • Who’s still defending embattled medical examiner Steven Hayne? Mississippi attorney general Jim Hood, for one [Radley Balko, earlier here, here, here]
  • Life in America will become more drab if Campaign for Safe Cosmetics gets its way [Jeffrey Tucker via @cathyreisenwitz, earlier on "CPSIA for soap"]
  • LSAT settled with DoJ demands re: disabled accommodation back in 2002 and again just now, and the differences between the two settlements tell a story [Daniel Fisher, earlier] Some prospective students will be losers [Derek Muller]
  • “‘Swoop and Squat': Staged car accidents, insurance fraud rise in L.A.” [Los Angeles Times]
  • Toughen duty for California psychiatrists to inform on dangerous patients? Awaiting backfire in three, two, one… [Scott Greenfield]

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The Supreme Court has declined review in Marek v. Lane, a case arising from the settlement of a privacy lawsuit against Facebook, which had presented questions about the proper use of cy pres distributions (in which money goes not to victims of the sued-over conduct, but to non-profits or other third parties). Writing in a separate statement, however, Chief Justice John Roberts indicated that the issues are of genuine concern to him, whether or not this case was the right one in which to address them. Excerpt:

I agree with this Court’s decision to deny the petition for certiorari. Marek’s challenge is focused on the particular features of the specific cy pres settlement at issue. Grant­ing review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action liti­gation, including when, if ever, such relief should be con­sidered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. Cy pres remedies, however, are a growing feature of class action settlements. See Redish, Julian, & Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617, 653–656 (2010). In a suitable case, this Court may need to clarify the limits on the use of such remedies.

[Adam Steinman, Civil Procedure and Federal Courts Blog, earlier here, here; see also Archis Parasharami, Mayer Brown "Class Defense"] Relatedly, “Taking on Class Action abuse: A conversation with Ted Frank, founder of the Center for Class Action Fairness” is a new podcast at Liberty Law.

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Intellectual property roundup

by Walter Olson on September 18, 2013

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Supreme Court roundup

by Walter Olson on August 30, 2013

  • Now with more detailed program descriptions: reserve your seat now for Cato’s 12th annual Constitution Day Sept. 17 in Washington, D.C.;
  • White House keeps losing SCOTUS cases 9-0, and there might be a lesson in that [Ilya Somin/USA Today, more]
  • “Another big term for amicus curiae briefs at the high court” [ABA Journal] “The Chief’s dissent reads over long stretches like something from the Cato Institute” [Michael Greve, Liberty Law Blog, on the administrative law case City of Arlington v. FCC, which was in fact one of the three cases where Cato's amicus position lost last term]
  • Ilya Shapiro on misconceptions about last term’s Shelby County case on voting rights [USA Today] and on the pending Schuette affirmative action case from Michigan [Cato]
  • “I count myself an originalist too.” — Justice Ruth Bader Ginsburg [CAC] Evaluating Ginsburg’s claim that the present Court is unusually activist [Jonathan Adler]
  • In Bond v. U.S., the treaty power case, Solicitor General urges high court not to overrule Missouri v. Holland [Nicholas Quinn Rosenkranz, more, earlier]
  • Cato seeks certiorari in cy pres (class action slush fund) case involving Facebook [amicus brief filed in Marek v. Lane, Ilya Shapiro]

We have often reported on controversies over cy pres class action settlements, in which part or all of a settlement fund goes to charities, universities, advocacy groups, or other unrelated institutions as opposed to actual victims of the sued-over conduct. Most appeals courts have agreed that cy pres raises distinctive issues that call for judicial oversight, yet the various federal circuits have marched off in different directions as to the appropriate nature and extent of such oversight, leading to inconsistency at least, and perhaps also to forum-shopping by lawyers seeking lenient standards.

Now figures well known to many of our readers — Ted Frank of the Center for Class Action Fairness, and David Rifkin and Andrew Grossman of Baker & Hostetler — have petitioned the Supreme Court for certiorari in a case arising from a privacy suit against Facebook over its Beacon program that eventuated in a cy pres settlement. “More than $6 million of [the] money was directed to the establishment of a new Internet privacy foundation with an advisory board that includes a Facebook representative and a plaintiffs’ lawyer from the case.” [Alison Frankel; Ted Frank/PoL; CCAF] Related: the “real problem with cy pres has never been that it is too costly. The real problem is that it creates an incentive for class counsel to act against the interests of the class.” [Andrew Trask]

Class action roundup

by Walter Olson on August 5, 2013

  • Judge Alsup “shopping for new plaintiffs lawyers” for class action against Wells Fargo “because he isn’t happy with the team that brought suit”
    [Recorder]
  • “Sixth Circuit Rejects Class Settlement in Pampers Case” [Adler] More: William Peacock, FindLaw (“something stinks”)
  • Supreme Court to decide whether quasi-class-actions spearheaded by state attorneys general (“parens patriae”) can dodge CAFA’s mandate of removal to federal court [Deborah Renner, WLF]
  • Channeling Google settlement funds to the Google-favored Lawrence Lessig center at Stanford is already a dubious use of cy pres, but thanking the lawyers makes it worse [Ted Frank]
  • “Class actions ending in ‘ridiculous results’ continue to plague California, critics say” [Legal NewsLine]
  • Big Ninth Circuit win for Ted Frank big win in inkjet coupon class action [Recorder, PoL, more]
  • “Sixth Circuit Can’t Take A Hint From SCOTUS, Reinstates Whirlpool Smelly-Washer Case” [Daniel Fisher; earlier on Sears v. Butler, Business Roundtable; PoL, Fisher and our coverage]

Cy pres, public-sector style? “A veteran Manitoba Crown attorney has been fired after he dropped charges against a Winnipeg company involved in a workplace accident — only to have the company make a substantial financial donation to a charity he oversees.” The prosecutor has defended his actions on the grounds that he did not direct the donation and that “the company made its own decision to choose the charity he was connected to”; he is not alleged to have benefited from the charity. [Winnipeg Free Press]

Class action roundup

by Walter Olson on May 13, 2013

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Class action roundup

by Walter Olson on March 29, 2013

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Class action roundup

by Walter Olson on November 19, 2012

  • Ted Frank on Whirlpool front-loading washer class action [PoL] $1.5 million for attorneys, $41,510 for class? Judge balks at Amex gift card settlement [same] EasySaver coupon settlement “conservatively” values coupons at 85% of face value [same]
  • Cy pres: Roger Parloff on tech-defendant class-action cy pres [Fortune] Privacy groups nominated for cy pres windfall in Facebook settlement [Wired, PoL]
  • “Class-Action Lawyers Face Triple Threat At Supreme Court” [Daniel Fisher at Forbes; related, Michael Bobelian]
  • Georgia high court: company could be on hook for $456 million for sending junk faxes [UPI] Will unwanted text-message class actions be the sequel to junk-fax litigation? [Almeida, Sedgwick via WLF]
  • “Class action summer camp” series from Andrew Trask includes refreshers on key concepts such as typicality, adequacy, etc.
  • “Supreme Court Hears Arguments in Comcast” [Wajert, earlier]
  • City of Des Moines class action: we owe it to ourselves [Iowa Appeals] For another case where there was high overlap between plaintiff class members and those expected to pay damages, see Sept. 2, 1999 [Milwaukee tainted municipal water system]

The judge found fault with a cy pres diversion of funds to charity. Ted Frank had criticized the settlement as leaving consumers in arguably a worse position than if the lawyers hadn’t sued. [Point of Law, earlier]

Consumer Action responds

by Walter Olson on August 7, 2012

Consumer Action, the San Francisco-based nonprofit advocacy and education group, takes issue with our August 1 post on its receipt of cy pres awards from class action settlements. You can read the letter from Linda Sherry, its DC office director, here, along with the original post, which we have edited in response to the objections.

A San Francisco nonprofit named Consumer Action is in the habit of pocketing cy pres moneys — leftover funds that are supposed to go “as nearly as possible” to class relief — from class actions against credit card companies and other mass marketers. Does Consumer Action have any connections to lawyers who file class action suits, and if so, are those connections significant? [Ted Frank, Point of Law] (Bad link fixed now; text edited August 5 per discussion below.)

[A Consumer Action executive has been in touch to take issue with this post, pointing out, among other things, that the two personages mentioned in the Point of Law post are no longer married to each other, and arguing that the group's work is independent of class action lawyers. I have reworded the post to reflect these concerns.]

August 6 update: Letter from Consumer Action’s Linda Sherry follows, continued after jump:

Dear Mr. Olson,

I am writing to you to clarify certain points made in your recent blog post, “Consumer Action, chez Sturdevant” (http://overlawyered.com/2012/08/consumer-action-chez-sturdevant/) based on a post by PointofLaw.com (http://www.pointoflaw.com/archives/2012/07/damned-if-you-do-files-chase-bank-credit-card-class-action.php).
Patricia Sturdevant, currently the president of Consumer Action’s Board of Directors, is employed as Deputy Commissioner for Policy and Planning at California Department of Insurance. She has been divorced from attorney James Sturdevant since 1996. Mr. Sturdevant’s firm has no formal connection to Consumer Action, however we admire of Mr. Sturdevant’s track record as a consumer attorney and consider him one of many valued supporters. These supporters also include corporations, foundations, public interest groups and individuals.

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A three-judge panel of the Ninth Circuit led by Judge Stephen Trott has rejected a settlement between class action lawyers and Kellogg over allegedly misleading promotion of its Frosted Mini-Wheats cereal. The settlement involved a smallish refund offer for the class of consumers, an unrelated food giveaway (so-called cy pres relief, given to beneficiaries other than the class initially wronged), and $2 million to the plaintiff’s lawyers, or roughly $2,100 an hour. [Hans von Spakowsky/PJ Media, Ted Frank/PoL, ABA Journal]

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Martin Redish (Northwestern) and John Beisner (Skadden Arps) were among the panelists at the June 1 hearing, and cy pres slush funds were a particular focus of interest [John O'Brien/Legal NewsLine, Ted Frank/PoL]

November 23 roundup

by Walter Olson on November 23, 2011

  • Big win for Ted Frank against cy pres slush funds [CCAF, Fisher, Zywicki, CL&P, @tedfrank ("Ninth Circuit rules in my favor ... but I still think I'm right".)]
  • “Can the Vatican Be Subject to ICC Prosecution?” [Ku/OJ]
  • “Tennessee: ATS Sues City Over Right Turn Ticket Money” [The Newspaper]
  • “Law firms dominating campaign contributions to Obama” [WaPo]
  • Does that mean it’s an entitlement? Punitive damage limits face constitutional challenges in Arkansas, Missouri [Cal Punitives]
  • Businessman sues to silence critical blogger, case is dismissed, now files suit #2 [Scott Greenfield]
  • Going Hollywood? “The Supreme Court should move to Los Angeles” [Conor Friedersdorf]

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Update roundup

by Walter Olson on November 13, 2011

Further on stories we’ve noted in the past:

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