Court strikes down Ameritrade settlement

$1.87 million in attorneys' fees for a worthless settlement will not be collected; Judge Vaughn Walker denied settlement approval.

From the perspective of the class, the worst-case scenario may be realized if following this denial of final settlement approval the case were to fail on dispositive motion. But in that event, class would end up essentially in the same situation it would be if final settlement approval were approved: with nothing. Because the purported benefits to the class do not warrant settlement approval, the court DENIES final approval of the proposed settlement.

Ameritrade Stock Spam Settlement briefing responses

Plaintiffs and defendants each filed responses yesterday in the Ameritrade suit. I have to say that I didn't expect the claim that the coupon for free software is not a "coupon."

Ameritrade Stock Spam Settlement briefing

Unlike the Bluetooth case, we were among several plaintiffs who filed substantive objections to this settlement. The hearing will be before Judge Vaughn Walker in San Francisco on September 10.

• CCAF objection;
• Public Citizen;
• Weinstein;
• Holober; and
  
• Elvey request for exclusion.

You may notice that Public Citizen filed an objection on behalf of Elvey. Unfortunately, when one excludes oneself from a settlement, one loses standing to object, so Public Citizen's fine brief may well be out the door.

Ameritrade Stock Spam Settlement

In 2007, plaintiffs brought a class action lawsuit against Ameritrade, alleging that Ameritrade was somehow behind the plaintiffs' receiving spam pushing the purchase of certain stocks--because, after all, there is no other way that anyone receives spam.

In 2008, the parties settled, with $1.87M for the attorneys, and zero pecuniary benefits to the 6.2-million-member class other than coupons for anti-virus software. Unfortunately for the attorneys,

at the preliminary approval hearing, Matthew Elvey, one of the class representatives, came forward and expressed numerous “reservations” about the settlement. He suggested that the gains the class would receive under the settlement had the appearance of benefitting the class but were, in operation, trivial.

This is understatement: Elvey told the court that he opposed the settlement, and even filed papers to that effect. Judge Vaughn Walker therefore declined preliminary approval--but then a few months later approved a similar settlement that had some minor changes such as the expiration date of the coupons and the wording of the notice.

To date, there is no evidence that the spam was connected to Ameritrade, or that a breach of Ameritrade data security that released home addresses for its customers has resulted in any harm, despite Ameritrade seeding databases with dummy spam-catcher e-mail addresses, and multiple analyses of whether identity theft had occurred.

Objections to this settlement are due July 9, 2009, with a September 10 hearing date in the Bay Area. And wouldn't you know it, I am a class member, though I must have thrown my densely written notice in the trash.

(Case No. C 07-2852 VRW (N.D. Cal.)).