CCAF wins in Ninth Circuit

WASHINGTON, DC - The Center for Class Action Fairness LLC announced today its victory in the U.S. Court of Appeals for the Ninth Circuit objecting to a valueless class action settlement. On Friday, the appellate court vacated a district court's 2009 approval of a settlement of a lawsuit alleging that Bluetooth headset manufacturers committed fraud when they failed to give more prominent warnings that listening to headsets continually at loud volumes might cause hearing damage. (A similar class action over Apple iPods was dismissed.) The settlement would have provided no cash to the class, but $850,000 to the attorneys. The Center believes that this is the first time the Ninth Circuit has vacated approval of a class action settlement since 2003.

"This is a landmark decision," said Ted Frank, the founder of CCAF who argued the appeal. "The Court explicitly upheld the principle that the absence of explicit collusion is not enough for a court to approve a settlement when the attorneys have negotiated a self-serving settlement at the expense of their clients. It is important because the Court identified as problematic several tactics attorneys use to protect proposed fee awards from scrutiny such as 'clear sailing' clauses that prohibit defendants from challenging proposed fee awards and 'kickers' that preclude the class from receiving any reduction in the fee award. The decision further emphasizes that any fee request based on 'lodestar' rates has to be cross-checked against benefits actually received by the class. It will now be much more difficult for attorneys to abuse the class action system to negotiate low-value settlements that provide handsome compensation for themselves."

The case is In re Bluetooth Headset Products Liability Litigation, No. 09-56683.


The Center for Class Action Fairness, founded in 2009, is a not-for-profit program that provides pro bono representation to consumers and shareholders aggrieved by class action attorneys who negotiate settlements that benefit themselves at the expense of their putative clients. It has won millions of dollars for class members over the last two years.

Coverage: Forbes, Point of Law, NLJ, Law 360 ($), Business Law Daily, LNL, Lawyers USA Online, Toothman, Trial Insider.

Georgia investigation into judge's use of cy pres

I'm quoted in a newspaper's investigation into a Georgia judge's seemingly self-serving use of cy pres awards. More details at Point of Law.

I'm kind of annoyed at the Los Angeles Daily Journal

CCAF, a non-profit project unaffiliated with and unsupported by any corporate funding, does not lobby. But the LA Daily Journal says that they don't need to run a correction for a sentence beginning with the phrase "Corporate lobbyists and advocacy groups such as CCAF" because, according to them, they're not claiming that CCAF is a lobbyist. It seems to me that the only people who could make that sort of sophistic argument are convicted child molesters and editors such as David Houston of the Los Angeles Daily Journal.

The LA Daily Journal op-ed critical of CCAF was written by a Kabateck Brown Kellner attorney; at no point does it disclose that we've objected to four of Kabateck's settlements (all of which paid substantially more to the attorneys than the class), resulting in one settlement rejection and another ruling reducing their fee request by nearly a million dollars, with two other cases still pending.

(At the risk of killing the joke, I wish to make clear that I have no basis to think that David Houston has been convicted of child molestation or any other sex offense.)

Opening brief filed in appeal of Volkswagen class action settlement approval

We filed our opening brief last Friday. Details at Point of Law.

It's still unclear to me why the Third Circuit waited a year before our briefs were due from our appeal of a class action settlement approval. (Dewey v. Volkswagen is reported at 728 F. Supp. 2d 546.)

Objection in Trombley v. National City Bank

The D.C. Circuit is correct, I think, in holding that an attorneys' fee in a class action should be calculated as a percentage as the common fund. But does that mean that class counsel in a class action that settles immediately upon the filing of a complaint without any contested litigation is entitled to the same 25% that is the benchmark for a fully-litigated case where class counsel is actually facing risk? This month, we argued no at a fairness hearing in a class action over overdraft fees. More details at Point of Law.

On KOGO (San Diego) 1:05 pm today

I will be on the LaDona Live program on KOGO (San Diego), 600 AM at 1:05 PM Pacific, talking about CCAF's objection in the Rice Krispies case.

CCAF objection in Blessing v. Sirius XM Radio

The Center for Class Action Fairness LLC objected today to a valueless class action settlement: the objection, filed in the Southern District of New York on behalf of a class member, underscores that the proposed Sirius XM Radio settlement would provide valueless injunctive relief to the class but $13 million to class attorneys.

"Certainly, parties to a class action can agree to settle a case for $13 million," said Ted Frank, the lead attorney on the objection and the founder of CCAF. "But if they do, it is inherently unfair and unreasonable for the attorneys to extract 100% of the settlement benefit for themselves. Class actions should be prosecuted on behalf of the class members, not self-serving class counsel."

The settlement of the antitrust class action against Sirius XM requires only that the defendant agree to not raise prices for five months. But this is an entirely valueless promise, given that Sirius XM, facing admittedly heavy competition from Internet music services and MP3 players, has been lowering prices and engaging in deep discounting to keep customers. Yet class counsel (including the Milberg law firm) implausibly claims that the settlement is worth $180 million to the class.

The CCAF objection also targets Judge Harold Baer's class certification order. For several years, Judge Baer has controversially required class counsel to meet racial quotas as a condition of appointment. CCAF has requested that Judge Baer vacate that part of his class certification order as unconstitutional.

The case is Blessing v. Sirius XM Radio Inc., No. 09-cv-10035 (S.D.N.Y.).

The Center for Class Action Fairness, founded in 2009, is a not-for-profit program that provides pro bono representation to consumers and shareholders aggrieved by class action attorneys who negotiate settlements that benefit themselves at the expense of their putative clients. It has won millions of dollars for class members over the last two years.