Sunday, March 28, 2010

Want to be local counsel in Ohio?

We have a potential client who wishes to object to a settlement in Cuyahoga County, Ohio, and need local counsel to sponsor our pro hac vice application. Please contact me if this is something you can do.

Wednesday, March 24, 2010

Wednesday, March 17, 2010

CCAF Third Circuit amicus brief in fen-phen fees case

In April 2008, the Diet Drugs MDL district court awarded $567 million the class counsel in that case, basing the award in part on representations by class counsel about future class recovery. A year later, a plaintiff's attorney requested the court reopen the question of the fee award because the class counsel had exaggerated those estimates. The district court refused, holding that the one-year delay in bringing the Rule 60(b) motion was not a "reasonable time." There has been an appeal to the Third Circuit, and, today, the Center for Class Action Fairness filed an amicus brief in support of the appeal that itself provides a short overview of the history of the fen-phen MDL. Many thanks to Chris Arfaa for his generous help in filing the brief.

We frequently cite to Professor Lester Brickman's law review article, which is on SSRN.

Tuesday, March 16, 2010

Scary Stephen King text message worth $175 in class action settlement

Some 60,000 cell-phone users who had signed up to receive "promotional messages" from in order to get a free ringtone got just such a text message on January 18, 2006 advertising a cell-phone-related Stephen King book. This resulted in a class action that was thrown out on the grounds that plaintiffs had agreed to "terms and conditions" permitting such cell-phone advertising; moreover, the federal law prohibiting the use of an automatic telephone dialing system applied only to systems that dialed numbers randomly or sequentially, and the defendants were operating off of a list of opt-in telephone numbers.

The Ninth Circuit reversed. The issue, it said, was not whether phone numbers were sequentially dialed, but whether the equipment used could hypothetically sequentially dial telephone numbers. It also held that there was a disputed issue of fact whether King's publisher, Simon & Schuster, counted as an "affiliate."

Faced with the prospect of going to trial and the risk of $500 to $1500 damages assessed for each call (i.e., $30 to $90 million in damages) defendants have settled. There is a settlement fund of $10 million established, plaintiffs can submit claims that will pay $175 (or a pro rata amount if the fund is exhausted) and plaintiffs' attorneys will ask for $2.725 million from that fund.

This is superficially all well and good, but if the claim response is the all-too-typical 1%, the attorneys may well collect 27 times as much as the class will get. Indeed, assuming that $1 million for notice and administration disappears from the fund, the full $10 million won't be paid out unless over half the class signs up. There is also a mysterious $250,000 "cy pres" award whose destination is not specified in the notice or in the settlement.

If you're a class member who received the text message in 2006, congratulations, you can get free money: fill out a claim form before September 20 (and kudos to the parties for allowing claimants to do it online); if you're a class member who has concerns about the settlement, contact me.

Saturday, March 13, 2010

Trial lawyers dismiss Grand Theft Auto appeal

The case that started me on this route is now over: plaintiffs voluntarily dismissed their appeal last week after voluntarily dismissing the court case February 22.

Friday, March 12, 2010

Off-topic: Toyota sudden acceleration

Mark Tapscott and Instapundit discuss my op-ed on Toyota sudden acceleration, which has risen to #2 on the most-viewed on the Washington Examiner website behind an article linked on the Drudge Report.

Tuesday, March 9, 2010

CCAF wins $2 million victory for consumers: perhaps more to come

We had objected to the Lonardo v. Travelers settlement for its disproportionate ratio of class benefits to attorneys' fees. On the eve of the fairness hearing, the parties modified the settlement so that class members who filed claims would get an additional $2 million, all of which would come out of the requested attorneys' fee—no small potatoes when only $2.8 million in claims were made. Still, we're talking about a settlement where the class gets $4.8 million and the attorneys get $4.6 million, so we renewed our objection today.

Tuesday, March 2, 2010

On KOGO (San Diego) 600 AM at 6:35 PM

I'll be on Top Story with Chris Reed tonight at 6:35 pm Pacific discussing recent CCAF cases and the problem of bad class action settlement cases generally.

Objection to Costco fuel settlement

Our clients were perturbed at a settlement that sought to pay up to $10 million to the attorneys, but zero to the class, along with entirely illusory (or, worse, counterproductive) injunctive relief. We filed an objection yesterday. The hearing is April 1 in Kansas City, KS.

Monday, March 1, 2010

CCAF in the Wall Street Journal

Our objection to the AOL Footer case (currently on appeal) was covered in the March 2 Wall Street Journal:

Late last year, in a class action claiming that tech giant AOL LLC improperly inserted footers in its users' emails, Los Angeles federal judge Christina Snyder awarded $25,000 in settlement funds to a Los Angeles legal-aid organization that has the judge's husband on its board. The mediator in the case recommended the organization, along with other charitable groups that received settlement funds, said Mark Litvack, counsel to AOL.

The Virginia-based [sic] Center for Class Action Fairness objected, claiming the settlement raised a conflict of interest. Ted Frank, president of the group, said that to avoid potential conflicts, it would be better to require unclaimed settlement funds to be deposited into state coffers. "The problem is that parties can now give money to a judge's preferred charity in the hopes that it will prompt the judge to rubber stamp a settlement," he said.

Judge Snyder declined to comment. "It did not seem logical to anyone," Mr. Litvack said, "to split a $110,000 settlement among 60 million class members."