Unlike the Bluetooth case, we were among several plaintiffs who filed substantive objections to this settlement. The hearing will be before Judge Vaughn Walker in San Francisco on September 10.
You may notice that Public Citizen filed an objection on behalf of Elvey. Unfortunately, when one excludes oneself from a settlement, one loses standing to object, so Public Citizen's fine brief may well be out the door.
Tuesday, July 28, 2009
Wednesday, July 8, 2009
July 6 Bluetooth hearing
Monday, I attended the fairness hearing for the Bluetooth MDL settlement. UCLA math professor and client Henry Towsner was in the audience.
Dozens of people filed objections with the court, but, aside from the CCAF objection, only 12 of those successfully navigated the procedural maze to file a "valid" objection. Out of those, we were the only ones to cite precedent in favor of our objection. And we were the only ones to make an appearance in court, which suggests that this would've been a quiet rubber-stamp without our appearance and filing.
After hearing from all sides, Judge Fischer took the position that settlements are favored outcomes in a world of crowded dockets, and, even if the case is meritless and unlikely to succeed, it is preferable to allow defendants to get out of the case by paying a small cy pres sum, since the plaintiffs would get nothing if the case was thrown out. The judge ruled that the settlement was fair and adequate, and approved the settlement. She postponed a ruling on the attorneys' fees (despite my argument that the fairness of the settlement was inextricably tied to the fee award). The plaintiffs have until August 5 to submit additional material in support of their fee request; the defendants will file a proposed order by July 20.
This is a settlement that is arguably fair if the fees are knocked down sufficiently so that the attorneys are not receiving more than their putative clients; though the plaintiffs negotiated a "clear sailing" clause where the defendants will not object to fees, the fee request was severable from the rest of the settlement. We will know more in August or September.
Dozens of people filed objections with the court, but, aside from the CCAF objection, only 12 of those successfully navigated the procedural maze to file a "valid" objection. Out of those, we were the only ones to cite precedent in favor of our objection. And we were the only ones to make an appearance in court, which suggests that this would've been a quiet rubber-stamp without our appearance and filing.
After hearing from all sides, Judge Fischer took the position that settlements are favored outcomes in a world of crowded dockets, and, even if the case is meritless and unlikely to succeed, it is preferable to allow defendants to get out of the case by paying a small cy pres sum, since the plaintiffs would get nothing if the case was thrown out. The judge ruled that the settlement was fair and adequate, and approved the settlement. She postponed a ruling on the attorneys' fees (despite my argument that the fairness of the settlement was inextricably tied to the fee award). The plaintiffs have until August 5 to submit additional material in support of their fee request; the defendants will file a proposed order by July 20.
This is a settlement that is arguably fair if the fees are knocked down sufficiently so that the attorneys are not receiving more than their putative clients; though the plaintiffs negotiated a "clear sailing" clause where the defendants will not object to fees, the fee request was severable from the rest of the settlement. We will know more in August or September.
Monday, June 29, 2009
Bluetooth Reply Brief
This morning we filed this reply brief in the Bluetooth Headset Products Liability Litigation. The hearing is July 6, a week from today.
If you read our first brief, you may recall that we argued that the new warnings mandated by the settlement were not materially different than those that class members already had when they bought their headset. (I was personally impressed that objectors held on to their thin-paper manuals and knew where to find them.) Much to my surprise, plaintiffs agreed, but claimed that the warnings were that good because of the lawsuit--a surprising concession that the settlement isn't creating any prospective relief.
And now some inside baseball: this case possibly presents an interesting choice-of-law question. California state law recognizes the "catalyst" theory for recovery of attorneys' fees. As such, Erie demands that a California-state-law case apply the catalyst theory, though that theory is rejected by federal common law in cases such as Buckhannon. But can one apply that substantive California law in fifty-state class action? Shutts would say no, but there is a D.N.J. decision out there, Chin v. DaimlerChrysler, that says yes--but without mentioning Shutts.
In this case, it's moot: the plaintiffs don't qualify for catalyst theory fees even under California law, and didn't even ask for recovery based on a catalyst theory. So I wouldn't expect the judge to reach it, but there's a law review article out there for someone ambitious.
If you read our first brief, you may recall that we argued that the new warnings mandated by the settlement were not materially different than those that class members already had when they bought their headset. (I was personally impressed that objectors held on to their thin-paper manuals and knew where to find them.) Much to my surprise, plaintiffs agreed, but claimed that the warnings were that good because of the lawsuit--a surprising concession that the settlement isn't creating any prospective relief.
And now some inside baseball: this case possibly presents an interesting choice-of-law question. California state law recognizes the "catalyst" theory for recovery of attorneys' fees. As such, Erie demands that a California-state-law case apply the catalyst theory, though that theory is rejected by federal common law in cases such as Buckhannon. But can one apply that substantive California law in fifty-state class action? Shutts would say no, but there is a D.N.J. decision out there, Chin v. DaimlerChrysler, that says yes--but without mentioning Shutts.
In this case, it's moot: the plaintiffs don't qualify for catalyst theory fees even under California law, and didn't even ask for recovery based on a catalyst theory. So I wouldn't expect the judge to reach it, but there's a law review article out there for someone ambitious.
Sunday, June 28, 2009
Compare and contrast: Costco renewal settlement
Not all class action settlements are anti-consumer, and CCAF does not reflexively oppose settlements. I had two people independently approach me about a class action settlement over Costco's membership renewal policies.
Prior to the suit, if one purchased a one-year $50 membership on February 1, 2006, let it expire, and then renew your membership on March 1, 2007, the one-year membership would expire February 1 rather than March 1, 2008. Plaintiffs sued arguing that this was consumer fraud. After some rulings adverse to it, Costco agreed to settle by providing a free month or three to class members.
The settlement was structured the way a settlement should be. Class members automatically received the benefit from the settlement without having to file a claim form: Costco's computers would automatically grant the benefit to its customers. We know that the class members prefer that in-kind relief, because they had already demonstrated their preference by exchanging cash for membership benefits, so the in-kind offer gave them full cash-value without loss of consumer surplus. With 50 million Costco members, even if only 10% were affected by the renewal policy, there would be a benefit to the class of over $21 million--though of course that is a guestimate and the real figure might well be more or less. The attorneys are requesting $5 million or so in fees, which is a good living, but not the greediness of demanding 25 or 35% of the pool, assuming that they have not inflated their hours on the case.
I told both people who contacted me that I would not be opposing this particular settlement.
Prior to the suit, if one purchased a one-year $50 membership on February 1, 2006, let it expire, and then renew your membership on March 1, 2007, the one-year membership would expire February 1 rather than March 1, 2008. Plaintiffs sued arguing that this was consumer fraud. After some rulings adverse to it, Costco agreed to settle by providing a free month or three to class members.
The settlement was structured the way a settlement should be. Class members automatically received the benefit from the settlement without having to file a claim form: Costco's computers would automatically grant the benefit to its customers. We know that the class members prefer that in-kind relief, because they had already demonstrated their preference by exchanging cash for membership benefits, so the in-kind offer gave them full cash-value without loss of consumer surplus. With 50 million Costco members, even if only 10% were affected by the renewal policy, there would be a benefit to the class of over $21 million--though of course that is a guestimate and the real figure might well be more or less. The attorneys are requesting $5 million or so in fees, which is a good living, but not the greediness of demanding 25 or 35% of the pool, assuming that they have not inflated their hours on the case.
I told both people who contacted me that I would not be opposing this particular settlement.
Saturday, June 27, 2009
Ameritrade Stock Spam Settlement
In 2007, plaintiffs brought a class action lawsuit against Ameritrade, alleging that Ameritrade was somehow behind the plaintiffs' receiving spam pushing the purchase of certain stocks--because, after all, there is no other way that anyone receives spam.
In 2008, the parties settled, with $1.87M for the attorneys, and zero pecuniary benefits to the 6.2-million-member class other than coupons for anti-virus software. Unfortunately for the attorneys,
To date, there is no evidence that the spam was connected to Ameritrade, or that a breach of Ameritrade data security that released home addresses for its customers has resulted in any harm, despite Ameritrade seeding databases with dummy spam-catcher e-mail addresses, and multiple analyses of whether identity theft had occurred.
Objections to this settlement are due July 9, 2009, with a September 10 hearing date in the Bay Area. And wouldn't you know it, I am a class member, though I must have thrown my densely written notice in the trash.
(Case No. C 07-2852 VRW (N.D. Cal.)).
In 2008, the parties settled, with $1.87M for the attorneys, and zero pecuniary benefits to the 6.2-million-member class other than coupons for anti-virus software. Unfortunately for the attorneys,
at the preliminary approval hearing, Matthew Elvey, one of the class representatives, came forward and expressed numerous “reservations” about the settlement. He suggested that the gains the class would receive under the settlement had the appearance of benefitting the class but were, in operation, trivial.This is understatement: Elvey told the court that he opposed the settlement, and even filed papers to that effect. Judge Vaughn Walker therefore declined preliminary approval--but then a few months later approved a similar settlement that had some minor changes such as the expiration date of the coupons and the wording of the notice.
To date, there is no evidence that the spam was connected to Ameritrade, or that a breach of Ameritrade data security that released home addresses for its customers has resulted in any harm, despite Ameritrade seeding databases with dummy spam-catcher e-mail addresses, and multiple analyses of whether identity theft had occurred.
Objections to this settlement are due July 9, 2009, with a September 10 hearing date in the Bay Area. And wouldn't you know it, I am a class member, though I must have thrown my densely written notice in the trash.
(Case No. C 07-2852 VRW (N.D. Cal.)).
Tuesday, June 23, 2009
Opposition briefing in Bluetooth
The plaintiffs and defendants each filed their briefs yesterday in the $0-for-the-class and $800k-for-the-attorneys settlement. Note that defendants were required to pay $1M in notice costs. Yet still, there were class members who did not hear of the settlement until my Overlawyered post publicizing it--a post that comes in for some ad hominem criticism in the plaintiffs' briefs, a classic case of pounding the table.
Wednesday, June 17, 2009
In re Bluetooth Headset Product Liability Litigation
"If you bought a Bluetooth headset between June 30, 2002 and February 19, 2009, the settlement of a class action lawsuit may affect your rights." And if you want to know why your instruction manuals are overwhelmed with worthless wacky warnings, the settlement of this class action lawsuit may explain why.
Overlawyered has covered other ridiculous failure-to-warn-of-hearing-loss consumer-fraud lawsuits, but missed this one filed by the Garcia Law Firm, which was eventually consolidated with twenty-six other lawsuits against Motorola, Plantronics, and GN Netcom (which makes "Jabra" headsets) alleging that the insufficiently advertised risk of hearing loss from turning the volume up too high on a Bluetooth headset was consumer fraud meriting damages, yadda yadda, because, without a wacky warning, people might not know that loud sounds can cause hearing loss.
The settlement is remarkable: the defendants are spending approximately $1.2 million to give notice of the settlement that offers $0 to the class. That's, right $0. There's a total $100,000 cy pres award to four charities selected by the plaintiffs, and the manufacturers agree to provide a wacky warning that "Exposure to loud noise from any source for extended periods of time may temporarily or permanently affect your hearing." Only lawyers like warnings like this. Such warnings make the rest of us worse off; when people see so many warnings "crying 'wolf,'" it inures them to meaningful warnings.
In return, the trial lawyers are going to ask for up to $850,000 in fees and costs—a remarkable infinite-percentage attorneys' fee. Nine representative plaintiffs will ask the court for a total of $12,000 in "incentive" payments.
On June 3, CCAF filed filed an objection on behalf of seven clients.
And anyone in Los Angeles July 6 who wants to watch the hearing, please join in the fun. I've got my plane ticket.
Overlawyered has covered other ridiculous failure-to-warn-of-hearing-loss consumer-fraud lawsuits, but missed this one filed by the Garcia Law Firm, which was eventually consolidated with twenty-six other lawsuits against Motorola, Plantronics, and GN Netcom (which makes "Jabra" headsets) alleging that the insufficiently advertised risk of hearing loss from turning the volume up too high on a Bluetooth headset was consumer fraud meriting damages, yadda yadda, because, without a wacky warning, people might not know that loud sounds can cause hearing loss.
The settlement is remarkable: the defendants are spending approximately $1.2 million to give notice of the settlement that offers $0 to the class. That's, right $0. There's a total $100,000 cy pres award to four charities selected by the plaintiffs, and the manufacturers agree to provide a wacky warning that "Exposure to loud noise from any source for extended periods of time may temporarily or permanently affect your hearing." Only lawyers like warnings like this. Such warnings make the rest of us worse off; when people see so many warnings "crying 'wolf,'" it inures them to meaningful warnings.
In return, the trial lawyers are going to ask for up to $850,000 in fees and costs—a remarkable infinite-percentage attorneys' fee. Nine representative plaintiffs will ask the court for a total of $12,000 in "incentive" payments.
On June 3, CCAF filed filed an objection on behalf of seven clients.
And anyone in Los Angeles July 6 who wants to watch the hearing, please join in the fun. I've got my plane ticket.
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