Wednesday, July 8, 2009

July 6 Bluetooth hearing

Monday, I attended the fairness hearing for the Bluetooth MDL settlement. UCLA math professor and client Henry Towsner was in the audience.

Dozens of people filed objections with the court, but, aside from the CCAF objection, only 12 of those successfully navigated the procedural maze to file a "valid" objection. Out of those, we were the only ones to cite precedent in favor of our objection. And we were the only ones to make an appearance in court, which suggests that this would've been a quiet rubber-stamp without our appearance and filing.

After hearing from all sides, Judge Fischer took the position that settlements are favored outcomes in a world of crowded dockets, and, even if the case is meritless and unlikely to succeed, it is preferable to allow defendants to get out of the case by paying a small cy pres sum, since the plaintiffs would get nothing if the case was thrown out. The judge ruled that the settlement was fair and adequate, and approved the settlement. She postponed a ruling on the attorneys' fees (despite my argument that the fairness of the settlement was inextricably tied to the fee award). The plaintiffs have until August 5 to submit additional material in support of their fee request; the defendants will file a proposed order by July 20.

This is a settlement that is arguably fair if the fees are knocked down sufficiently so that the attorneys are not receiving more than their putative clients; though the plaintiffs negotiated a "clear sailing" clause where the defendants will not object to fees, the fee request was severable from the rest of the settlement. We will know more in August or September.


  1. As someone who's never been to a proper legal hearing before, it was an...interesting experience. Mostly, it was the little legal oddities that the lawyers all took to be perfectly sensible, but which are quite strange to an outsider.

    Much of the issue seemed to come down to the law's fixation on procedure over substance. (As us math professors like to say, syntax over semantics.) When discussing whether the settlement was collusive, both the plaintiffs and defendants focused entirely on the process by which they reached the settlement, entirely ignoring (even after Ted pointed it out quite clearly) the fact that it's possible to tacitly collude without either party ever explicitly bringing it up. But the court seemed satisfied---the procedures were followed, so it must be okay.

    (Bizarrely, the evidently non-collusive process involved the two sides voluntarily exchanging information early on and then meeting with each other a great deal. The way that this demonstrated not being collusive was apparently so obvious that it didn't bear mentioning.)

    Similarly, the plaintiffs talked endlessly about how they were "taking a haircut" and handling the case "at a loss", when what they really meant was that they weren't being paid as much money as they claimed that they "ought" to be paid. (Of course, without any evidence that they could have been spending that time on a case that would have paid that much.)

    The last oddity that stood out to me was the "injunctive relief"---that is, the new, longer warning the defendants have to include---which the plaintiffs touted as the main benefit to, well, us, of the settlement. Ted pointed out that after the settlement, the companies will never be able to improve the warning based on new information. The defendants, however, clarified that they were free to change the warning later. (This isn't how I'd interpret the settlement, but I guess that's why I'm not a lawyer.) That is, the main benefit of the settlement is that the defendants have to include a new warning, for now, until they change their mind, at which point they're apparently free to do something different.

    The courthouse is located in the most intimidating building I've ever been in. I couldn't help thinking that the architect was asked to build it that way to discourage people from laughing at what goes on inside.

  2. I should add that, much to Ted's credit, his arguments against the settlement dominated the hearing. It was clear that without his objections, the concerns raised by non-lawyers would have been quickly dismissed and the settlement would have been rubber-stamped.