Another victory for CCAF: Pecover v. EA Sports triples class payouts

You will recall that we objected to a class action settlement over EA Sports's Madden games: as in our successful Baby Products objection, the settlement did little to ensure that class members got paid, while the attorneys would get millions regardless whether any class members received any cash. We argued that class members should get first dibs on the settlement fund before money went to unrelated third-party charities. The court agreed in part, and the parties consented to modifying the settlement to permit both a tripling of the money available to consumers, and another thirty days for consumers to make claims. Coverage of the new notice (though not the litigation that led to that tripling) at Kotaku and Consumerist. Would it be too needy to ask for some blog love?

Already, the number of claims has doubled: combined with the tripling of claim amounts, we're looking at over a 500% increase in the amount of money going to consumers. In a just world, we'd get five sixths of the gigantic attorney fee (after all, class counsel ridiculed our objection and defended the degree to which their own clients were going to be shafted), but we'll settle for making a more modest request, to be paid from the $9.2 million class counsel has argued they are due to receive, with any amounts over our lodestar to be donated to the class or the Federal Judicial Center.

In today's Wall Street Journal

Today's Wall Street Journal covers one element of the fee dispute in Citigroup Securities. More discussion at Point of Law, together with links from coverage of last week's fairness hearing.

Victory in Bayer

As a result of our objection in the Bayer class action settlement, the parties modified the settlement to increase direct payments to the class by over $5.8 million, over 25 times as much as the class would have received in the cy pres-heavy settlement had we not objected. A second objection to one of the cy pres recipients resulted in a beneficiary more aligned with the purpose of the litigation. The district court has not yet finalized its decision on the fees to be awarded to plaintiffs' counsel. We'll be seeking modest attorneys' fees to come out of class counsel's share; if we are awarded more than $50,000 (less than 1% of the additional benefit to class members), we'll cede the rest to the settlement fund.

Texas appellate victory for CCAF

We won the case of Kazman v. Frontier Oil, knocking out 100% of the attorneys' fees in a $0 shareholder derivative suit that made shareholders worse off because it was brought solely for the benefit of the attorneys. Details at Point of Law.

More on Citigroup Securities

I discuss continuing developments in the Citigroup Securities fee objection at Point of Law. Our objections (December, March) have attracted a lot of press coverage.

Baby Products press coverage

Lots of people are talking about Baby Products, some of whom talked to me. [Fisher @ Forbes; Legal Intelligencer; Reuters; Washington Examiner; Litigation Daily ($) (calling me "Class Action Settlement Scourge Ted Frank," which I should print up on my business cards); WSJ Law Blog ($); Star-Ledger/Bloomberg News; Debevoise; Ballard Spahr; ABA; Findlaw; Blawgletter; UCL Practitioner; Petit (who seems mad at me, but can't bring himself to accurately represent my litigation or public-policy position); Mealey's ($); Law360 ($)]

Why is Jaafar & Mahdi Law Group trying to squelch criticism of a bad class action settlement?

A class action accusing local McDonald's in Dearborn County of falsely advertising its chicken as "halal" was settled. A class member, Majed Moughni, an attorney, wrote a Facebook post complaining, inter alia:

McDonald's was going to pay $700,000 for selling "Haram" chicken sandwiches and labeling it as "Halal". The current lawyer on the case wants the the [sic] majority of the money to go to a medical center ($275,000) and a museum ($150,000), that lawyer Kassem Daklallah, wants to pocket $230,000 and the plaintiff, Ahmed Ahmed will keep $20,000. We think the money should go to you, the people who were lied to and bought and ate "Haram" chicken sandwiches, not a medical center or a museum who were not injured. ...

This seems a reasonable criticism: after all, the class is relatively small (observant Muslims who ate at the particular McDonald's restaurant), so distributing $425,000 to claimants is feasible. And, as Baby Products and the American Law Institute confirm, cy pres should be the last resort (rather than opening gambit) in a settlement. If Daklallah, his law firm, McDonald's, or their attorneys have preexisting relationships with the cy pres recipients, that would be even worse, because then the cy pres would be illusory relief. A $20,000 proposed payment to the class representative in a $0 settlement is further evidence of self-dealing.

At plaintiff's request, the Michigan state court enjoined Moughni, and forced a change to the Facebook page to put forward Ahmed's preferred view of the case. This is a scary First Amendment violation, and that the court signed off on it makes one wonder whether the court can fairly adjudicate objections to the settlement. Public Citizen is on the right side in this one, and, along with the ACLU, is litigating in favor of the objector's rights. [Public Citizen; Dan Fisher @ Forbes; Detroit Free Press]

(Of course, there are certainly strong arguments against using the consumer fraud laws to mediate a religious dispute. If the lawsuit reflects a disagreement over what constitutes "halal," courts shouldn't be adjudicating the religious question. If the lawsuit reflects an objectively false claim that a particular organization certified the food as "halal," then that's a legitimate complaint. But even if the possibly fatal flaw in the lawsuit means the settlement is necessarily small, that is no excuse for the attorneys, class representative, and unrelated third parties to capture the entirety of the value of the settlement.)

Public Citizen and the ACLU are taking no position on the fairness of the settlement, which makes sense for the strategic purpose of focusing on the First Amendment issues. Since we're not involved in the case, and will not be representing any clients in the Michigan proceedings, I hope that even the attorneys who negotiated this awful settlement will concede I have the right to speak about what I think is a breach of fiduciary duty to their clients.