Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘class actions’

Grand Theft Auto: Class Action Settlement – $26,505 for the unrepresented class, $1 million fee request

We now know how many people signed up for the Grand Theft Auto: San Andreas class action settlement out of the millions of members in the purported class.

Tier 1 (up to $35.00) (no exchange required): 416
Tier 2 (up to $17.50) (exchange required): 22
Tier 3 ($10.00) (exchange required): 131
Tier 4 ($5.00) (no exchange required): 2,050
Disc Exchange w/o cash: 57

2676 total claimants, receiving a total cash value of at most $26,505, though likely even less than that, given that the plaintiffs’ attorneys record no actual cash distribution.

The seven “representative” class members are asking for approval to receive another $24,500, or nearly half of the total cash recovery.

Of course, as we’ve discussed, none of these people had a legitimate cause of action or suffered any legally cognizable injury. But how much are the plaintiffs’ attorneys (from thirteen different offices of twelve different law firms!) asking for for this travesty of a lawsuit and settlement–one that was entirely redundant of the taxpayer-funded investigation conducted by the Los Angeles district attorney? They claim their time devoted to the litigation was worth $1,317,433, but are “generously” claiming a 28% discount for a total fees-and-costs request of $1 million.

Recognizing that this 3774% contingent fee looks fishy to the least scrutinizing of judges applying Rule 23 review, the plaintiffs have sought to inflate the appearance of accomplishment through a $870,000 cy pres award to the National PTA and ESRB. (As I’ve discussed, cy pres awards that do not directly benefit class members should not be used to justify fee awards.) They also inflate the award by claiming that the costs of notice, administration and disk replacement should be attributed to the size of the accomplished result, thus puffing matters up to over $2 million, consisting nearly entirely of empty calories for the plaintiffs they purport to be representing.

Alas, I was the only class member to docket a formal objection to this rip-off. (While it was my idea to object, I can take no credit for the objection brief, which was written by my attorney, Larry Schonbrun.) On Thursday, the plaintiffs’ attorneys filed a brief defending the settlement, with many cites to Overlawyered as ad hominem attacks on the objection. The court’s hearing is June 25.

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“Lawsuits that benefit only lawyers”

Hard-hitting column by Stuart Taylor, Jr. on the destructiveness of the current legal actions

seeking more than $400 billion from companies that did business in South Africa during apartheid, [which] score high on what I call Taylor’s Index of Completely Worthless Lawsuit Indicators:

• The lawsuits will do victims of wrongdoing little or no good.

• They will penalize no human being who has done anything wrong.

• They will deter more conduct that is beneficial than harmful.

• The legal costs and any damages will come at the expense of the general public.

• The lawsuits therefore serve no purpose at all but to enrich lawyers and provide ideological power trips for some judges as well as lawyers.

American Isuzu Motors v. Ntsebeza, recently allowed to go forward, is being led by (among others) class-actioneer and frequent Overlawyered mentionee Michael Hausfeld.

The apartheid lawsuit is one of dozens seeking to pervert the Alien Tort Statute to mulct companies for ordinary commercial conduct in countries accused of human-rights violations. Caterpillar, for example, was sued for selling bulldozers that Israel used to destroy suspected Palestinian terrorists’ homes. (The case was dismissed.) “The American bar is actively soliciting alien plaintiffs” to try out novel theories, State Department legal adviser John Bellinger noted in a recent speech. Because so many federal judges have smiled on such suits, Bellinger added, foreign governments increasingly regard the U.S. judiciary “as something of a rogue actor.”

With added commentary on the Kivalina climate-change class action, Rhode Island lead paint, shareholder litigation, and Lerach, Weiss, and Scruggs. (National Journal, May 17, will rotate off page so catch it now).

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Sen. Cornyn introduces lessons-of-Lerach bill

The Texas Republican, a member of the Senate Judiciary Committee, is introducing legislation that

would make several key reforms to current securities class action law to increase the accountability of and transparency for attorneys filing these lawsuits and the institutional plaintiffs they often represent. Specifically, it would require:

DISCLOSURE OF PAYMENTS BETWEEN PLAINTIFFS AND ATTORNEYS

Plaintiffs and attorneys would submit sworn certifications identifying any direct or indirect payments, promises of such payments, and other conflicts of interest between them, as well as all political contributions made to elected officials with authority or influence over the appointment of counsel in the case.

COMPETITIVE BIDDING FOR LEAD COUNSEL

Courts would include a competitive bidding process as one of the factors for the selection and retention of lead counsel for a class of plaintiffs.

STUDY TO DETERMINE APPROPRIATE ATTORNEYS FEES

GAO would commission a study of the last 5 years of fee awards in securities class action cases to determine the average hourly rate for lead counsel.

(release, Congressional Record statement). (cross-posted from Point of Law). More: hailed by Lisa Rickard of U.S. Chamber.

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May 21 at AEI: Off-Label Uses of Approved Drugs: Medicine, Law, and Policy

An important all-day conference at AEI next week:

In the last several years, nearly every major pharmaceutical company has paid hundreds of millions of dollars to settle allegations of illegal “off-label” marketing of drugs. There has been a growing trend of actions by federal prosecutors, state attorneys general, and cooperating trial lawyers to litigate against pharmaceutical manufacturers for allegedly doing too much to promote off-label use of prescription products. Citing recent legal changes mandating exclusion from federal programs after a conviction, many manufacturers say they are forced to settle rather than risk defending themselves–even as prosecutions against individual executives have foundered in front of juries.

At this AEI Legal Center event, experts on both law and health care will present papers on the law, economics, medicine, and public policy of off-label marketing, discussing everything from the abuse of class action mechanisms to implications for the First Amendment and medical malpractice. Speakers include former Food and Drug Administration chief counsel Daniel Troy; former Cephalon general counsel John Osborn; former deputy attorney general George Terwilliger; principal deputy assistant attorney general and acting assistant attorney general for the Civil Division Jeffrey Bucholtz; attorneys Brian Anderson, James Beck, Mark Herrmann, Richard Samp, and Kyle Sampson; law professor Margaret Johns; and AEI scholars John E. Calfee, Theodore H. Frank, and Scott Gottlieb.

Panel I: Off-Label Marketing, R&D, and Medical Practice

Panel II: The Legal Environment from Federal Regulation and Enforcement

Panel III: Distortions from State and Private Enforcement

Panel IV: Legal Implications for Commercial Speech and Medical Practice

Register here. Earlier discussion on POL: Feb. 1; Feb. 19; Mar. 24; Dec. 17; Aug. 31; Aug. 22 (Richard Epstein); Aug. 1, 2006 (state AGs); Mar. 19 (InterMune indictment).

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New York Lottery sued

According to the would-be class action on behalf of Take Five ticket buyers, those supposed chances of “winning” are inflated by counting a free play as a win. “The lawsuit says merchants who sell the tickets should be held liable since they were in on the fraud.” (Thomas Zambito, “A lotto nonsense, says $5M lawsuit”, New York Daily News, May 6; Kati Cornell, “You’ve Gotta Sue To Win”, New York Post, May 6; Lottery Post).

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Grand Theft Auto: Class Action Objection II

I never thought I’d be involved in a hot-coffee lawsuit, but Gamepolitics covers my intervention and objection to the Grand Theft Auto: San Andreas class action settlement, which I predicted before the suit was even filed.

(I corrected a mistake in the earlier post; I said I purchased GTA:SA for the Xbox 360 when, of course, I purchased it for the Xbox. Fortunately, my affidavit to the court was correctly phrased.)

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Grand Theft Auto roundup

Grand Theft Auto IV debuts at midnight tonight to spectacular reviews, and the litigation is sure to follow…

  • Overlawyered favorite Jack Thompson (Mar. 21; Feb. 22; Sep. 27, etc., etc.), whose antics could fill an entire sub-blog, has sent an obnoxious letter to the mother of Rockstar’s boss, Strauss Zelnick, accusing it of being pornography and training for murder. A new book, Grand Theft Childhood, as documented by WaPo’s Mike Musgrave, suggests that the fears of corrupted childhood are overblown, though Lord knows I wouldn’t let any teenage kids I was responsible for play this game.
  • As someone who purchased Grand Theft Auto:San Andreas the first day it was out for the Xbox 360 original Xbox, I am a member of a plaintiff class in a class action settlement over the Hot Coffee mod where players can access the Internet and voluntarily modify the game to make it slightly more offensive to the easily offended. (To imagine that one can find p0rnography on the Internet!) In the settlement, I get, well, nothing, and the attorneys will ask for about a million dollars; worse, individual “representative” class members who suffered no injury will get $5000 that could have been used to buy more music rights for Grand Theft Auto IV. We’re frequently asked what we can do if we’re unhappy with a class action settlement where we’re a member, but this settlement was sufficiently appalling that I actually retained an attorney and he served an objection on my behalf on Friday. Further updates to come.

Update: I incorrectly said I bought San Andreas for the Xbox 360. Of course, San Andreas was never available for the 360. I bought the June 2005 release for the original Xbox.

Update: More.

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Update: court nixes “Deal or No Deal” lawsuit

Updating a Feb. 28 post:

The Supreme Court of Georgia has said “no deal” to a team of Columbus lawyers representing a proposed class of people seeking to recover money they spent participating in a feature of the NBC hit show “Deal or No Deal.”

The suit filed in federal court had contended that the Lucky Case Game — in which viewers, like the contestants on “Deal or No Deal,” try to pick a lucky suitcase — ran afoul of Georgia law because participants were charged 99 cents to play through their cell phones. The plaintiffs based their suit on a colonial-era Georgia statute that allows gamblers to recover their losses through lawsuits.

(Alyson M. Palmer, “Luck Runs Dry for ‘Deal’ Plaintiffs in Lawsuit Against NBC”, Fulton County Daily Report, Apr. 22).

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FACTA receipts, restaurant coupons and “annihilating” damages

Entrepreneurial lawyers have launched a thriving industry of class actions demanding statutory damages of $100-$1000 per violation (times the number of customers) from businesses that continue printing too much credit card information on receipts despite a federal law requiring them to stop that practice, the Fair and Accurate Credit Transaction Act (FACTA). Kings Family Restaurants, a Western Pennsylvania chain, has agreed to distribute coupons, as well as very non-couponic attorney’s fees, in one such case (WSJ law blog, Apr. 25). “Coffee Bean Tea & Leaf, a Los Angeles-based coffee-shop chain, agreed to give customers free drinks and pay customer lawyers $110,000.” On the other hand, judges have not always gone along with demands for class certification: “Costco, the largest U.S. warehouse-club chain, might have to pay as much as $17 billion without having harmed anyone, U.S. District Judge A. Howard Matz said in January, refusing to certify a class action. That’s 15 times the Issaquah, Washington-based company’s 2007 profit.” (Cynthia Cotts, “Costco, Kinko’s Battle Trial Lawyers Over Credit-Card Receipts”, Bloomberg, Apr. 5). One tactic, used in suits against U-Haul and In-N-Out Burger, is to limit the scope of the class action to a few stores or locations, on the theory that a court that might not let a class action with “annihilating” damages go forward might yet approve one inflicting a nonfatal though large shark-bite. (Matthew Hirsch, “Plaintiffs Attorneys Think Globally, Act Locally in Financial Privacy Cases”, The Recorder, Aug. 27, 2007). Among the 300+ defendants in receipt suits is 1-800-FLOWERS, whose attorney David E. Block expresses outrage:

“In 22 years, I have never had a plaintiff sit across the table from me and say, ‘I have no damages. My identity hasn’t been stolen. I’m just bringing this lawsuit because I can,'” said Block of the Miami office of Jackson Lewis. “There’s something inherently wrong with a lawsuit where the plaintiff has no injury.”

(Tresa Baldas, “Landslide of Suits Over Data on Receipts”, National Law Journal, Apr. 7). “Receipts” needn’t actually be printed out in a shop or public place to trigger the act; those that flash on a customer’s home computer screen count too. (WSJ law blog, Apr. 8). Our earlier coverage: May 10 and Oct. 31, 2007, and Apr. 4 of this year.

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