May update

• A disappointing loss in Cobell v. Salazar, the first time I lost a federal appeal I've argued. We're still evaluating our options. Lots of links and analysis at Point of Law.
• Briefing and oral argument in Robert F. Booth Trust v. Crowley. I'm looking forward to the Seventh Circuit opinion.
• Odd shenanigans in Brazil v. Dell: see Point of Law; Reuters coverage; Reuters follow-up coverage.
• We completed Sixth Circuit briefing in the Pampers Dry Max case, and will discuss in a future post.
• The district court approved the Costco "hot fuel" settlement, though it at least refused to credit the junk economics expert; several other defendants are settling, and, if they're similar settlements where the benefits go entirely to the class counsel, we'll file objections there, too. Some objectors have appealed; we don't believe there's appellate jurisdiction yet. 

Two important appellate briefs filed this week

• Shareholder derivative suits present interesting conflicts of interest. The suit is purportedly brought on behalf of shareholders, but when the case settles, the corporate defendant—i.e., the plaintiff shareholders—are the ones paying the bill. Thus, if the suit does not actually extract any wealth from directors or officers for their supposed breaches of duty, shareholders are frequently worse off. This is the case in Robert F. Booth Trust v. Crowley, a derivative suit against Sears Holding Corp. where the alleged breach was failure to recognize the risk of Clayton Act litigation. The irony, of course, is that the actual shareholder derivative suit is far more expensive than the possibility of Clayton Act litigation. I objected; the posture is muddied by some procedural issues relating to the Seventh Circuit's intervention requirement, as you can see, but the fundamental point—shareholder derivative suits should not be permitted to be maintained when they are designed to benefit the attorneys, rather than the shareholders—remains valid, and we believe this is the first case to present this principle in the shareholder derivative context. The case is No. 10-3285, Robert F. Booth Trust v. Crowley (7th Cir.).
• Claims-made settlements are the successor to coupon settlements in structuring settlements to divert the lion's share of relief to the attorneys, rather than the class. The parties typically structure a claims process that will reward less than a tenth of the class (in this case, less than 3% of the class), hide the claims rate from the lower court by scheduling the fairness hearing well before the claims deadline (though that evasion didn't happen in this case), and then ask for attorneys' fees on the illusion that the entire class got relief. Thus, we have cases like Brazil v. Dell, where the class got less than $500,000, but the attorneys received $7 million. We think that is per se unfair, and have asked the Ninth Circuit to weigh in. The case is No. 11-17799, Brazil v. Dell (9th Cir.).

Some updates

• Yesterday, we filed the opening brief in our HP Inkjet Ninth Circuit appeal. Details at Point of Law.

• The district court approved the $0 settlement in Pampers. The attorneys will receive $2.7 million. We've appealed to the Sixth Circuit.

• The district court approved the Brazil v. Dell settlement. There have been about $0.5 million of claims, and the attorneys are to receive $6 million. We're going to appeal to the Ninth Circuit, since this pretty clearly contradicts Bluetooth. Thanks to Kyle Graham for covering the fairness hearing.

• The plaintiffs have asked for a $200,000 appeal bond in Blessing v. Sirius XM, the case we've appealed to the Second Circuit where the attorneys got $13 million and the class got worthless coupons that the court refused to call coupons. We filed an opposition to the motion for appeal bond. The motion is entertaining: the plaintiffs complain that I've previously objected in several other cases, but if you look at their list, we won most of those objections. 

• Blogosphere coverage of yesterday's Wall Street Journal article: Ribstein; Overlawyered; Mass Tort Litigation Blog; WSJ Law Blog.

• Business Law Daily covers the CEI amicus in Cobell v. Salazar.

Brazil v. Dell

The class attorneys in Brazil v. Dell are asking for $6 million for themselves, but it is a claims-made settlement that will almost certainly pay a small fraction of that amount to the class. The parties are attempting to hide that from the court by scheduling the claims deadline after the fairness hearing, but this is where objectors come into play, and the Center has filed an objection on behalf of a class member in advance of the October fairness hearing. The settlement also suffers from several of the self-serving features identified as problematic in Bluetooth.