Thursday, March 6, 2014
"Muscle Milk Magnificence"
A former CCAF intern files an entertaining objection to a bad lawyer-driven settlement that doesn't comply with Ninth Circuit Law, and Above the Law is ON IT.
Wednesday, February 19, 2014
Wednesday, January 15, 2014
Abusive appeal bonds
(This post is by both Adam Schulman and Ted Frank.)
Over at Public Citizen's blog, Scott Michelman posts about the attempt by class attorneys in the Facebook Sponsored Stories settlement to impose $32,000 appeal bonds against each of the 15 appealing objectors in that case. (As you'll recall, CCAF represented objectors in this case, but chose not to appeal when the settlement was improved and the district court substantially cut attorneys' fees. The improvements made the settlement somewhat less objectionable, and given that we have limited resources and can only take on so many appeals each year, we'd rather devote them to a case where we can make more of a marginal difference than where there are fifteen other appellants.)
Michelman is correct that $32,000 is far beyond what the law allows under Federal Rule of Appellate Procedure 7. In multiple cases, even when the appellees violate FRAP 30 to bloat the appendix, we have yet to see a cost order greater than $3,000. Sadly, however, this $32,000 request is not unique. In the Center's short history we have seen several attempts to abuse Rule 7, some even successful:
Fortunately, most judges get it right. See, e.g., the non-CCAF case In re Navistar Diesel Engine Prod. Liab. Litig. (N.D. Ill. Aug. 12, 2013).
A particularly abusive appeal bond is pending before the 10th Circuit. Two objectors appealed an abusive settlement that the district court approved over the objection of several state attorneys general, after which the district court imposed a $1 million appeal bond. Tenille v. Western Union, 2013 U.S. Dist. LEXIS 130962 (D. Colo. Sept. 10, 2013); the Tenth Circuit will hear argument next week.
Michelman worries that "[such strong-arm tactics] play into the negative stereotype about class actions and class counsel." They certainly do—but the fact that class counsel so frequently engages in them show that the stereotypes have much truth. For all the plaintiffs' bar talks about "access to justice," many trial lawyers will not hesitate to run roughshod over a class member's right of appeal if they think it will short-circuit a meritorious appeal that would jeopardize an excessive fee award. Given that Fraley class counsel (who claims his time is worth $975/hour) will be expending more than $32,000 of lodestar to brief and argue the appeal bond motion (and any collateral litigation caused if the bond is granted), the motion is clearly a bad-faith attempt to improperly deter appeals, rather than a legitimate concern over recovering appellate costs.
Over at Public Citizen's blog, Scott Michelman posts about the attempt by class attorneys in the Facebook Sponsored Stories settlement to impose $32,000 appeal bonds against each of the 15 appealing objectors in that case. (As you'll recall, CCAF represented objectors in this case, but chose not to appeal when the settlement was improved and the district court substantially cut attorneys' fees. The improvements made the settlement somewhat less objectionable, and given that we have limited resources and can only take on so many appeals each year, we'd rather devote them to a case where we can make more of a marginal difference than where there are fifteen other appellants.)
Michelman is correct that $32,000 is far beyond what the law allows under Federal Rule of Appellate Procedure 7. In multiple cases, even when the appellees violate FRAP 30 to bloat the appendix, we have yet to see a cost order greater than $3,000. Sadly, however, this $32,000 request is not unique. In the Center's short history we have seen several attempts to abuse Rule 7, some even successful:
- Cobell v. Salazar, 816 F. Supp. 2d 10 (D.D.C. 2011) (appeal bond request of $8.3 million denied);
- Blessing v. Sirius XM Radio, Inc., No. 09-cv-10035-HB, 2011 WL 5873383 (S.D.N.Y. Nov. 22, 2011) (appeal bond request of $200,000 denied);
- In re MagSafe Apple Power Adapter Litig., No. C 09-01911 JW (N.D. Cal. 2012) (appeal bond request of $200,000 against each appealing objector; court orders illegal $15,000 bond on each of five appellants); currently on appeal at the Ninth Circuit; and
- In re EasySaver Rewards Litig., No 09-cv-2094-AJB-WVG (S.D. Cal. 2013) (appeal bond request of $60,000 before the settlement had even been approved, let alone appealed!) (court issued illegal $15,000 bond); currently on appeal at the Ninth Circuit.
Fortunately, most judges get it right. See, e.g., the non-CCAF case In re Navistar Diesel Engine Prod. Liab. Litig. (N.D. Ill. Aug. 12, 2013).
A particularly abusive appeal bond is pending before the 10th Circuit. Two objectors appealed an abusive settlement that the district court approved over the objection of several state attorneys general, after which the district court imposed a $1 million appeal bond. Tenille v. Western Union, 2013 U.S. Dist. LEXIS 130962 (D. Colo. Sept. 10, 2013); the Tenth Circuit will hear argument next week.
Michelman worries that "[such strong-arm tactics] play into the negative stereotype about class actions and class counsel." They certainly do—but the fact that class counsel so frequently engages in them show that the stereotypes have much truth. For all the plaintiffs' bar talks about "access to justice," many trial lawyers will not hesitate to run roughshod over a class member's right of appeal if they think it will short-circuit a meritorious appeal that would jeopardize an excessive fee award. Given that Fraley class counsel (who claims his time is worth $975/hour) will be expending more than $32,000 of lodestar to brief and argue the appeal bond motion (and any collateral litigation caused if the bond is granted), the motion is clearly a bad-faith attempt to improperly deter appeals, rather than a legitimate concern over recovering appellate costs.
Wednesday, November 20, 2013
Urban Active Fitness class action settlement
The class in Gascho v. Global Fitness Holdings LLC, Case No. 2:11-cv-436 (S.D. Ohio), consists of the 606,246 individuals who signed a gym membership or personal training contract with Urban Active Fitness between January 1, 2006 and October 26, 2012. You might be one of the people who received a postcard.
The fact that the parties can identify the number with specificity suggests that a settlement is simple: give money to the allegedly injured class members. But instead one must make a claim (by mail or by the settlement website, www.urbanactivelawsuit.com). The reasoning for that is simple: class counsel would rather that the money to go to settle the lawsuit go to themselves and their friends, the settlement administrator company, rather than the class.
Earlier this year, the Sixth Circuit in In re Dry Max Pampers Litigation condemned sham settlements that allocated a disproportionate sum of money to class counsel. This settlement will pay $2.4 million to class counsel (from a segregated fund that reverts to the defendant) and, most likely, only $1.3 million to the putative clients—exactly the sort of thing the Sixth Circuit said was impermissible.
One hopes that a class member who received a postcard investigates the unfairness of the settlement and retains qualified counsel to object. The claims deadline and the objection deadline is December 30.
The fact that the parties can identify the number with specificity suggests that a settlement is simple: give money to the allegedly injured class members. But instead one must make a claim (by mail or by the settlement website, www.urbanactivelawsuit.com). The reasoning for that is simple: class counsel would rather that the money to go to settle the lawsuit go to themselves and their friends, the settlement administrator company, rather than the class.
Earlier this year, the Sixth Circuit in In re Dry Max Pampers Litigation condemned sham settlements that allocated a disproportionate sum of money to class counsel. This settlement will pay $2.4 million to class counsel (from a segregated fund that reverts to the defendant) and, most likely, only $1.3 million to the putative clients—exactly the sort of thing the Sixth Circuit said was impermissible.
One hopes that a class member who received a postcard investigates the unfairness of the settlement and retains qualified counsel to object. The claims deadline and the objection deadline is December 30.
Monday, November 4, 2013
November 4 Press Release
US SUPREME COURT DENIES FACEBOOK USERS
CY PRES SETTLEMENT CHALLENGE OPPORTUNITY
OPENS DOOR FOR FUTURE CHALLENGES
WASHINGTON, D.C. – The US Supreme Court (SCOTUS) has
declined to hear arguments in Marek v.
Lane, (No. 13-136) a case challenging the fairness, reasonableness and adequacy
of a $6.5 million cy pres settlement
where the only concession Facebook made to settle the claims of millions of
users was to establish a new foundation to educate the public about “user
control” over Internet privacy.
However, in a separate statement, Chief Justice Roberts acknowledged
the need for the Court to address the increasing use of cy pres settlements. He wrote, “…review of this case might not have
afforded the Court an opportunity to address more fundamental concerns
surrounding the use of such remedies in class action litigation, including
when, if ever, such relief should be considered….In a suitable case
this Court may need to clarify the limits on the use of such remedies.”
“We’re hopeful the Court in a future case will address abuse of the cy pres doctrine which has become an
increasingly serious problem that cheats consumers of fair settlements in class
action cases,” said Ted Frank, founder of the Center for Class Action Fairness
and one of the lawyers challenging the Facebook settlement.
Cy pres awards in class
action settlements provide awards be given to charities or foundations instead
of individual consumers. According to legal scholars these awards “create the
potential for conflicts of interest by ensuring that class counsel are able to
reap exorbitant fees regardless of whether the absent class members are
adequately compensated.”
Monday, October 14, 2013
October 15
Tomorrow morning, the Supreme Court will announce orders relating to two cert petitions we filed (with substantial and critically necessary pro bono assistance) that it considered at its October 11 conference: Martin v. Blessing (which long-time readers remember as the Sirius XM case) and Marek v. Lane (the Facebook Beacon cy pres case). Both petitions made SCOTUSblog's "Petitions We're Watching" list, which means that the experts there think that those petitions have a better than average chance of being granted--but since "average" means "less than 1%," odds are still long.
I'll be speaking at the University of Chicago Law School at lunchtime, and hope to see some readers there.
I'll be speaking at the University of Chicago Law School at lunchtime, and hope to see some readers there.
Tuesday, October 1, 2013
Marek v. Lane cert petition in the Wall Street Journal
In The Wall Street Journal, David Rivkin and Lee Casey write about Marek v. Lane, arguing that it's time to end class-action settlements that only reward lawyers, not plaintiffs. Earlier.
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