Brian Fitzpatrick (Vanderbilt), on SSRN:
This article is a comprehensive empirical study of class action settlements in federal court. Although there have been prior empirical studies of federal class action settlements, these studies have either been confined to securities cases or have been based on samples of cases that were not intended to be representative of the whole (such as those settlements approved in published opinions). By contrast, in this article, I attempt to study every federal class action settlement from the years 2006 and 2007. As far as I am aware, this study is the first attempt to collect a complete set of federal class action settlements for any given year.
I find that district court judges approved 688 class action settlements over this two-year period, involving nearly $33 billion. Fewer than 40% of the settlements were in securities cases, but the the vast majority of the money involved in the settlements came from securities cases. The $33 billion transferred by these 688 federal court class action settlements is, according to one estimate, equal to 10% of the money transferred by the entire American tort system over this two-year period. Of this $33 billion, roughly $5 billion was awarded to class action lawyers, or about 15% of the total. Most judges chose to award fees by using the highly discretionary percentage-of-the-settlement method, and the fees awarded according to this method varied over a broad range, with a mean and median around 25%. Fee percentages were strongly and inversely associated with the size of the settlement. The age of the case at settlement was positively associated with fee percentages. There was some variation in fee percentages depending on the subject matter of the litigation and the geographic circuit in which the district court was located, with lower percentages in securities cases and in settlements from the Second and Ninth Circuits. There was no evidence that fee percentages were associated with whether the class action was certified as a settlement class or with the political affiliation of the judge who made the award.
3 Comments
Too bad how many classes were de-certified didn’t make the summary. Perhaps the figure is so small as to be meaningless.(in contrast to the number where class certification was rejected at the outset)
[…] Walter Olson, now with the Cato Institute, links to a study by Vanderbilt University Law Professor Brian Fitzpatrick on Overlawyered.com. […]
I think it is because it would need a completely different dataset to report such summary.