Saturday, March 5, 2011
Wednesday, March 2, 2011
NVIDIA class action settlement: Milberg declares war on its clients
If there was ever any question of whether Milberg was going to side with its putative clients or its putative adversary, we now have an answer from this Litigation Daily story (behind a subscription wall, but now available for free):
1. Millions of HP owners were subject to the settlement; "thousands have already submitted claims." Or, in other words, less than 1% of the class has submitted claims. And that's aside from the fact that "submitting a claim" doesn't indicate approval of the settlement administration, just an understanding that half a loaf is better than none. All of my clients have "submitted claims"; none are happy with the settlement.
2. In case it wasn't clear from my briefs, I fully support "consumers [getting] their computers replaced." One can readily look at my proposed order, and see that I am not trying to "stop[] the settlement from proceeding." There is already an existing court order for the settlement to proceed, and no one has moved to stay that order.
3. I've heard of spin, but it's remarkable that demanding that consumers get what their attorneys promised them in a class action settlement and notice is considered "an anti-consumer agenda." To review: it's the tort reform advocate who has filed papers with the court asking for consumers to get what they were promised; it's the trial lawyers who have announced their intent to file papers with the Court siding with the defendant and alleged wrongdoer insisting that the consumers—their clients—get less than what the Court has already ordered.
Leading tech blog Engadget caught wind of our motion:
Update: Court rules for NVIDIA. If you're a class member with questions about the case, and why your attorneys argued against your own recovery, you need to talk to your attorneys at Milberg; I cannot help you.
Lead class counsel Jeff Westerman of Milberg said in a statement that Frank is "working against the interests of consumers who deserve to get their computers replaced."Three obvious points:
"This settlement is providing class members with repairs and replacement computers, and thousands have already submitted claims," Westerman said in the statement. "When it comes to the replacement computers, we hired an independent expert who confirmed that we were adhering to the terms of the settlement. [Frank's] claims to the contrary reveal an anti-consumer agenda aimed at stopping the settlement from proceeding."
1. Millions of HP owners were subject to the settlement; "thousands have already submitted claims." Or, in other words, less than 1% of the class has submitted claims. And that's aside from the fact that "submitting a claim" doesn't indicate approval of the settlement administration, just an understanding that half a loaf is better than none. All of my clients have "submitted claims"; none are happy with the settlement.
2. In case it wasn't clear from my briefs, I fully support "consumers [getting] their computers replaced." One can readily look at my proposed order, and see that I am not trying to "stop[] the settlement from proceeding." There is already an existing court order for the settlement to proceed, and no one has moved to stay that order.
3. I've heard of spin, but it's remarkable that demanding that consumers get what their attorneys promised them in a class action settlement and notice is considered "an anti-consumer agenda." To review: it's the tort reform advocate who has filed papers with the court asking for consumers to get what they were promised; it's the trial lawyers who have announced their intent to file papers with the Court siding with the defendant and alleged wrongdoer insisting that the consumers—their clients—get less than what the Court has already ordered.
Leading tech blog Engadget caught wind of our motion:
Ted Frank of the Center for Class Action Fairness says that NVIDIA has no business passing off cheap laptops, and we think he might have a case -- after all, the judge ordered that NVIDIA provide "a replacement computer of like or similar kind and equal or similar value," and it doesn't take a lawyer to see that the $400 [sic] Compaq Presario CQ56-115DX that the company's offering doesn't come close to compensating owners of faulty machines. We joked that you might be better off selling your old laptop for parts on eBay, and that might not be far from the truth.So did leading law blog Above the Law.
Update: Court rules for NVIDIA. If you're a class member with questions about the case, and why your attorneys argued against your own recovery, you need to talk to your attorneys at Milberg; I cannot help you.
Friday, February 25, 2011
In re HP Laserjet and the question of injunctive relief
On February 14, there was an hour-long fairness hearing before Judge Guilford in the Central District of California, and anyone who practices in federal court in California knows how rare hour-long arguments are. One certainly appreciates the attention paid to the case. The Laserjet settlement was pretty much identical to the Inkjet settlement (with the twist that the lead plaintiff in Laserjet filed an objection accusing his attorneys, Kabateck Brown Kellner, of fraud). The Court gave the opportunity for additional briefing, and Tuesday we provided this brief with a short summary on the question of injunctive relief and answering some of the Court's questions.
Tuesday, February 22, 2011
The return of the $0 Costco fuel settlement
You will recall that a class action is pending in Kansas over gasoline retailers' failure to disclose the laws of physics to customers, i.e., gasoline, like all other liquids, expands in higher temperatures. Since a "gallon" is a measure of volume rather than power, someone buying gasoline when it's warm is getting less mileage than someone who buys the same volume of gasoline when it's cool. To some extent, the retailers are being hoist by their own petard, because they pulled the same class-action nonsense on wholesalers, but it's still socially wasteful litigation that benefits no one but the lawyers; when I argued at a fairness hearing in Kansas City last April, I had several dozen witnesses, likely each billing an average of over $400/hour. Costco decided to get the uncertainty off of its books, and agreed to pay the lawyers to go away. But the class members, the ones putatively injured by Costco's conduct, got nothing. The plaintiffs had the chutzpah to claim that Costco's agreement to "temperature-adjust" their fuel sales was a benefit to consumers, but that's clearly not so. If Costco's average "gallon" happens to increase in size a cubic inch or two, that doesn't mean that consumers are getting free gas any more than it would mean that consumers would get free eggs if the government suddenly mandated that a "dozen" was now equal to eighteen.
The court threw out the settlement on a technicality, and the parties are now back with an amended settlement that fixes the technicality, but still doesn't do anything for the class. So my clients renewed their objection to the settlement. Last time around, we challenged the quack economic report that plaintiffs submitted that claimed changing the size of a gallon would magically result in consumers getting tens of millions of dollars of free gasoline; the other side protested that I was just a mere lawyer who wasn't qualified to use big words like "cross-subsidization." Over the last few months, I've discussed this case with several economists, many of whom fell over laughing as I described the testimony of Dr. Andrew Safir; the distinguished Dr. David Henderson was kind enough to charge us a reduced rate to provide a simple rebuttal on short notice this time around.
When is injunctive relief a benefit to the class? So many plaintiffs' lawyers seem confused about this issue: they forget that they represent clients, and the injunctive relief needs to benefit their clients if one is to count it towards determining the fairness of the settlement. Few courts consider the issue because few objectors raise it, but the ones that do consider it consistently distinguish between retrospective injunctive relief (say, a recall that fixes an automobile or a computer) and prospective injunctive relief (a company agrees to change its business practices). Even when there is consumer fraud, prospective injunctive relief doesn't benefit consumers unless they engage in new business with the vendor. And even then, the consumers will not benefit if the vendor simply raises its prices to account for the new costs in the change in business practices.
The court threw out the settlement on a technicality, and the parties are now back with an amended settlement that fixes the technicality, but still doesn't do anything for the class. So my clients renewed their objection to the settlement. Last time around, we challenged the quack economic report that plaintiffs submitted that claimed changing the size of a gallon would magically result in consumers getting tens of millions of dollars of free gasoline; the other side protested that I was just a mere lawyer who wasn't qualified to use big words like "cross-subsidization." Over the last few months, I've discussed this case with several economists, many of whom fell over laughing as I described the testimony of Dr. Andrew Safir; the distinguished Dr. David Henderson was kind enough to charge us a reduced rate to provide a simple rebuttal on short notice this time around.
When is injunctive relief a benefit to the class? So many plaintiffs' lawyers seem confused about this issue: they forget that they represent clients, and the injunctive relief needs to benefit their clients if one is to count it towards determining the fairness of the settlement. Few courts consider the issue because few objectors raise it, but the ones that do consider it consistently distinguish between retrospective injunctive relief (say, a recall that fixes an automobile or a computer) and prospective injunctive relief (a company agrees to change its business practices). Even when there is consumer fraud, prospective injunctive relief doesn't benefit consumers unless they engage in new business with the vendor. And even then, the consumers will not benefit if the vendor simply raises its prices to account for the new costs in the change in business practices.
Saturday, February 12, 2011
Merger lawsuits
I'm quoted in a Reuters story about merger lawsuits and their quick settlements:
Settlements often come fast, and plaintiffs' lawyers share in the spoils -- $500,000 in a typical lawsuit, Advisen said.
"The real problem, I think, is in cases where lawyers win a few extra sentences of disclosure and walk away with $1 million of fees," said Ted Frank, who founded the Center for Class Action Fairness and often challenges proposed settlements.
Lawyers and researchers say the proliferation of lawsuits reflects increased competition among firms.
"There are some bottom feeders on the plaintiffs' side," said Adam Savett, a director at the Claims Compensation Bureau LLC, which monitors class-action claims for investors. "Their modus operandi is throw up a lot of stuff on the wall and try to get a quick settlement, and move on."
REARRANGING DECK CHAIRS
Typically, an individual or institutional investor sues a target company or its directors, seeking class-action status and alleging a breach of fiduciary duty to shareholders.
...
"Defense lawyers benefit from this game," Travis Laster, a vice chancellor in Delaware Chancery Court, said at a December hearing. "They get to bill hours without any meaningful reputational risk from a loss. They then get to get a cheap settlement for their client. Disclosures are cheap."
Frank, of the Center for Class Action Fairness, said it was up to judges to decide if these settlements have much benefit.
"Judges should consider whether these provisions actually create value for shareholders," he said, "or amount to a rearranging of the deck chairs to create the illusion of value to justify attorneys' fees."
Wednesday, February 9, 2011
Oral argument in the Bluetooth case
The audio file of Monday's oral argument in the Ninth Circuit in the Bluetooth case is now on line. The panel consisted of circuit Judges Hawkins and Fisher and N.D. Ohio district court Judge Zouhary.
Briefing:
Briefing:
Friday, January 21, 2011
Apple backdating litigation update
We opposed preliminary approval of the Apple settlement because there was a possibility that money would go to third parties at the expense of class members. The settling parties assured the court that that wouldn't happen, but have not disclosed the number of claims made on the settlement fund to date. So today we filed an objection to the settlement contingent upon whether the settlement fund goes to the class members or to third-party cy pres. If the settlement fund does end up in the hands of the class, we're going to ask for a token amount of attorneys' fees to reflect the $2.5 million we won for the class.
The case is In re: Apple Inc. Securities Litigation, No. 06-5208 (N.D. Cal.); the fairness hearing is scheduled before Judge Fogel on February 18 in San Jose.
The case is In re: Apple Inc. Securities Litigation, No. 06-5208 (N.D. Cal.); the fairness hearing is scheduled before Judge Fogel on February 18 in San Jose.
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