Tuesday, November 26, 2013
Now, nothing requires Discover to make a settlement actually be worth $8.7 million in cash. Perhaps this settlement is really only costing them $4 million or so; the actual amount is unknown and may never be known if the court does not ask what the results of the claims process are, and the claims process does not end until after the fairness hearing, a typical scheduling tactic to permit the parties to claim ignorance (or make wild promises) about actual recovery. But class counsel is asking for a 25% commission on the larger illusory figure. It would be easier and cheaper if Discover just issued $3 million of credits to the list of known class members and paid $1 million to the class counsel, but by all these additional steps and illusory chargebacks that are against the class's interest, class counsel gets to claim that the settlement is "worth" $8.7 million, and they should get a $2.175 million fee.
Of course, it also seems odd that class members are being asked to settle for 1 to 3% of their claims (and if a class member received more than one illegal phone call, less than 1%), but class counsel is getting millions for a case that settled a few dozen docket entries in. But perhaps the fee petition due to be filed December 23 will do a better job justifying that fee that the settlement website currently does.
The case is Steinfeld v. Discover Financial Services, No. 3:12-cv-01118-JSW (N.D. Cal.); the objection deadline is January 13, 2014.
Wednesday, November 20, 2013
The fact that the parties can identify the number with specificity suggests that a settlement is simple: give money to the allegedly injured class members. But instead one must make a claim (by mail or by the settlement website, www.urbanactivelawsuit.com). The reasoning for that is simple: class counsel would rather that the money to go to settle the lawsuit go to themselves and their friends, the settlement administrator company, rather than the class.
Earlier this year, the Sixth Circuit in In re Dry Max Pampers Litigation condemned sham settlements that allocated a disproportionate sum of money to class counsel. This settlement will pay $2.4 million to class counsel (from a segregated fund that reverts to the defendant) and, most likely, only $1.3 million to the putative clients—exactly the sort of thing the Sixth Circuit said was impermissible.
One hopes that a class member who received a postcard investigates the unfairness of the settlement and retains qualified counsel to object. The claims deadline and the objection deadline is December 30.
Monday, November 4, 2013
Monday, October 14, 2013
I'll be speaking at the University of Chicago Law School at lunchtime, and hope to see some readers there.
Tuesday, October 1, 2013
Tuesday, September 17, 2013
- Procter & Gamble (but not the plaintiffs) filed an en banc petition seeking further review of the 2-1 decision striking down the ludicrous attorney-benefit-only settlement in Dry Max Pampers. CCAF filed its opposition yesterday.
- Similarly problematic to the Dry Max Pampers settlement is the case of Richardson v. L'Oreal, a pathetic lawsuit and settlement that seems to have forum-shopping shenanigans. CCAF attorney Adam Schulman filed an objection on behalf of a class member.
- One tactic class counsel engages in is to attempt to scare off objections with abusive discovery requests. This happened in L'Oreal, where class counsel purported to try to subpoena every attorney working for CCAF. Less than one business day after the subpoena was served and we sent this letter, class counsel withdrew all of the subpoenas. We're not scared of discovery: we follow the rules, and as Citigroup showed, class counsel almost always has something to hide. In this case, for example, it's doubtful the class representatives ever had any real input in the settlement process, and some might not even have standing; and I'd wager there's more than a colorable chance that there are documents existing where the parties agree that they don't want to be in the Ninth Circuit because of Bluetooth. But we're leanly staffed, and offensive and defensive discovery can be time-consuming and take away from the fun appellate stuff we like to do. If you're a litigator who'd like to be on our pro bono SWAT team call list the next time someone tries to play discovery games with us (subject of course to conflict checks and the like when the occasions arise), please drop me a line. We're engaging in fundraising so that we can be more aggressive with offensive discovery in future cases.
- We won $26.7 million for shareholders in the Citigroup case, but we think we can win even more on appeal. Another objector appealed anyway, so we're not adding any delay. We filed a notice of appeal yesterday. [Litigation Daily]
Wednesday, September 11, 2013
All persons and entities (excluding governmental entities, Defendants, and Defendants’ respective predecessors, subsidiaries, and affiliates) who purchased Passenger Air Transportation on [Korean Air or Asiana Airlines], or any predecessor, subsidiary, or affiliate of the Defendants, at any time during the time period January 1, 2000 through August 1, 2007. As used in this definition, “affiliates” means entities controlling, controlled by, or under common control with a Defendant [and does not include travel agents]. “Passenger Air Transportation” means passenger air transportation service purchased in the United States for flights originating in the United States and ending in the Republic of Korea (“Korea”) or flights originating in Korea and ending in the United States.
There is a claim form online if you want your cash and coupons; class members should get formal notice shortly. One of the lead class counsel is Jeff Westerman, who you might remember from his Milberg days for his role in the NVIDIA settlement bait-and-switch where he hired an expert witness to testify against letting class members recover what the settlement notice told them they'd recover. So one is skeptical when one reads in the settlement that "Korean Air and Class Counsel shall set the maximum coupon redemption value per ticket by mutual agreement."