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.

Dannon Activia class action settlement

A stipulation of settlement has been filed in the Dannon Activia yogurt consumer-fraud case. A $35 million fund will be established to pay claim forms with cash, and plaintiffs' lawyers (including Coughlin Stoia, the lead firm) have "clear sailing" to request $10 million plus expenses from that fund—that's over 28.5% for those of you keeping track at home. A typical contingent fee of 25% would mean a fee of $8.75 million.

Any unclaimed funds will go to charity—which means that, as the settlement is structured, the plaintiffs' firms have no incentive to ensure that the allegedly injured class members will collect the money: their fee is tied to the common fund, rather than to what consumers receive.

That's before we get to the injunctive relief. For that, I'll defer to Russell Jackson, who reports on his blog:

It's understandable that it could make economic sense for a defendant to settle a series of class actions after years of litigation. But this settlement's so-called "equitable" relief involving the defendant's advertising and labeling makes it crystal clear that these lawsuits were not based on any real fraud at all. The settlement allows Dannon to say practically the same thing it always has said. The lawsuits obviously were lawyer-invented, and although they may have survived some motions to dismiss, the settlement's equitable relief demonstrates that the defendant's statements were backed up by real science.

The court has yet to provide preliminary approval to the settlement. If you are a member of the class of Activia purchasers, and you wish to object to the settlement, please let me know.

"The Cy Pres Racket"

Karen Lee Torre, in the Connecticut Law Tribune, hates cy pres even more than I do, so we'll be seeing her Sep. 28 op-ed in future briefs. See also Peggy Little at Point of Law.

In the Recorder

The Recorder has a brief piece on CCAF on their blog.

Costco Fuel Settlement

Costco, along with other fuel retailers, has been sued over the way it measures gallons of fuel in some states. The putative class plaintiffs have settled the case--for zero dollars for the class, and ten million dollars for the attorneys. You are a member of the Settlement Class and are affected by the proposed settlement if you purchased gasoline from Costco at a temperature above 60 degrees, between January 1, 2001, and April 22, 2009, and reside in the following states: Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, the District of Columbia, or Guam. CCAF will be representing two class members who find the settlement objectionable.

(Updated to reflect status of case.)

CD California ruling approving Bluetooth settlement

The court's opinion is not quite a rubber-stamp of the defendants' proposed order and opinion, but it's pretty close. The court distinguishes precedent by claiming the cases we cited did not have severable attorneys' fees, but that (1) is a distinction without an economic difference and (2) is not universally true. The attorneys' fees were severable in Crawford v. Equifax, for example, as that settlement obliged only the payment of "reasonable" fees to be set by the court.

The critical issue of the fees to the attorneys has not yet been decided.

In Forbes magazine

The Sep. 21 issue of Forbes magazine, now on newsstands, has a lengthy profile by Dan Fisher of my founding of the Center for Class Action Fairness, complete with a photo of my ugly mug gracing the story.