Reply brief in Bachman v. A.G. Edwards coupon settlement appeal

Milberg and several other law firms collected $21 million in quick-pay fees for a Missouri state-court class action settlement that provided face value of $39 million to the class, most of which was in $8.22 coupons. The Center for Class Action Fairness appealed the rubber-stamp approval, and, on Friday, filed a reply brief in the case. Oral argument is set for May 4 in St. Louis.

Press coverage of the Bachman case

In Litigation Daily, Forbes.com, and the Washington Times. Also Amy Alkon's blog.

Bachman v. A.G. Edwards coupon class action settlement appeal

Our unsuccessful objection to the Bachman v. A.G. Edwards settlement, which consisted almost entirely of time-restricted non-transferable $8.22 coupons, received press coverage at the time. The question of whether to value a coupon at full face value or at the actual (or reasonably anticipated) redemption rate is a question of first impression in Missouri state courts; our appellate brief was filed Monday.

Appeal bond struck down

Imagine our surprise when we checked the docket in the Bachman case in late July (after checking it weekly since we filed our appeal) and learned that the judge had backdated an order requiring us to file a $325,000 appeal bond and then never served it on us or had it placed in the docket until a month later. We moved the Missouri appellate court to vacate the bond; plaintiffs cross-moved to dismiss our appeal for failure to pay the bond. Friday, the Missouri appellate court followed the law and struck down the illegal bond: there was no request for a stay of execution, and plaintiffs cannot self-impose a stay of execution by ripping off the class and then demand a bond to prevent an appeal of their own failure to look out for the class's interests. We're looking forward to the appellate court considering the problems with this class action settlement.

Good reporting, bad reporting

Compare and contrast the excellent analysis of Forbes.com's Dan Fisher with the shallow softball St. Louis Business Journal on the A.G. Edwards case—though the latter coaxes from Robert Blitz of Blitz Bardgett and Deutsch an admission that his lawsuit would have been deemed meritless if it had been in federal court.

"Oddly enough, I admired one of the lawyers."

Bill McClellan of the St. Louis Post-Dispatch writes about the Bachman v. A.G. Edwards case and settlement in today's paper.

Bachman v. A.G. Edwards update

You may recall the $60 million settlement that wasn't to which CCAF objected. Judge Angela T. Quigless approved the settlement and approved the $21.6 million award of attorneys' fees and costs without addressing any of the objections.

And if you ever hear a class action attorney tell you that what they really care about is "access to justice," you have my permission to laugh sardonically. The Bachman attorneys have asked the court to require any objector-appellants (each of whom have about $20 at stake) to post a $325,000 appeal bond—despite the fact that Missouri law does not permit such a thing. CCAF filed an opposition to the request (citing Professor Fitzpatrick's recent article disapproving of excessive appeal bonds), and I was in St. Louis yesterday to argue at the hearing. We will see whether CCAF gets to appeal the judgment or has to appeal an illegal appeal bond order.

Bachman v. A.G. Edwards class action settlement objection

The attorneys in the case of Bachman v. A.G. Edwards, Inc. negotiated what they call a $60 million settlement. Which sounds good, until you actually look at the settlement:

• The attorneys are asking for $21 million of the $60 million, or 35%;
• 35% is actually an underestimate, because $34 million of the $60 million consist of $8.22 coupons, issued in sets of three to be used once a year to pay for mutual fund fees--assuming that the class members remember to use an $8.22 coupon in 2012;
• the attorneys' fees get paid immediately, while the class does not get paid until ninety days after all appeals are resolved;
• and even if the court reduces the attorneys' fees, the reduction goes to a charity run by A.G. Edwards's successor, Wells Fargo, rather than to the class.

In reality, the class is getting more like $8 million, and the attorneys will be getting more than twice that. This settlement is similar to a settlement against Edward D. Jones of a couple of years ago negotiated by a similar group of attorneys; I asked a co-lead counsel who was involved in both cases for evidence of the redemption rate of the Edward D. Jones coupons. Needless to say, he refused to provide a response.

Today, we filed an objection on behalf of a class member who was justifiably appalled by the settlement. And I see many others are unhappy as well. The AG Edwards Settlement Fairness Hearing will be held on May 14, 2010 at 9:30 a.m., central time at the St. Louis City Circuit Court, Civil Courts Building, 10 North Tucker Boulevard, St. Louis, MO 63101-2044.