Objection to Yahoo! "Sponsored Search" settlement

In In re Yahoo! Litigation, Case No. CV06-2737 CAS (FMOx), plaintiffs’ lawyers seek approval to settle a class action over alleged problems in its "Sponsored Search" web advertising service with zero dollars for the vast majority of class members, but seek over $4.1 million in attorneys’ fees. The Center for Class Action Fairness filed an objection on behalf of Eric Turkewitz, a New York personal injury attorney and blogger. As the brief says, “It would be an abuse of discretion to reward these attorneys with a contingency fee of over 80,000% when they failed to make the millions of dollars of settlement money available to their putative clients, instead claiming it solely for themselves.”

Honda Civic Hybrid class action settlement objection

In True v. American Honda Motor Co., Case No. 07-cv-00287 VAP (OPx), trial lawyers seek to settle consumer fraud litigation over mileage claims for the Honda Civic Hybrid with a settlement that offers only coupons to the 186,000-member class, but $2.95 million for the attorneys. Worse, the coupon program appears to be designed to discourage class members from their use: they exclude Honda’s hottest models, may not be transferred, expire quickly, require a trade-in for full value, and cannot be used unless class members sit through a lengthy presentation on optimizing gas mileage. The Center for Class Action Fairness filed papers on behalf of a Civic Hybrid purchaser requesting that the settlement be rejected. A similar class action settlement over Ford Explorers in Sacramento last year issued one million $500 coupons to the class, of which only 75 were redeemed, while the attorneys collected over $20 million in fees.

AOL Footer case - Fairchild v. AOL objection to proposed settlement

Four plaintiffs represented by three law firms sued AOL for including advertising in the footers of emails and failing to make it sufficiently easy for members to opt out of the process. Before so much as a motion to dismiss was filed, they settled—for $320,000 for their attorneys, and nothing for the class they represented. (Per ¶¶ 23-24, AOL will give $110,000 to six charities that have nothing to do with email footer advertising; $35,000 of that amount was chosen by the four plaintiffs.)

Today, the Center for Class Action Fairness filed an objection on behalf of Objector Darren McKinney to the settlement.

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.