Monday, November 28, 2011

Wherein CCAF is "justly lauded"

More coverage of the AOL victory in a Washington Examiner op-ed. And Reuters Legal does a lengthy story.

AOL's attorney's comment is revealing: all they cared about was whether they were able to get rid of the frivolous claims against them in a nuisance lawsuit. But the Center cares more about establishing precedents and rules governing the long-term fairness of class actions than any individual result. That larger issue was irrelevant to AOL, so they think they have a victory, but we do, too. Reuters, through Professor Brian Fitzpatrick, questions whether it makes a difference: it does. Class actions are supposed to benefit the class first, rather than the attorneys. When the attorneys have carte blanche to choose cy pres recipients, they effectively get double-payment. To the extent Professor Fitzpatrick cares about defendant deterrence as a reason for class actions, he should be pleased that the defendant would not be allowed to dictate illusory cy pres that goes to their preferred charitable donee.

Interestingly, Kabateck Brown Kellner, whose attorneys had written a dishonest op-ed criticizing CCAF's defense of class members in cy pres settlements without revealing they were adverse to us in four cases (all four of which have now resulted in CCAF court victories), couldn't even be bothered to file a Ninth Circuit brief making a public-policy argument for their preferred tactic of abusive cy pres.

Wednesday, November 23, 2011

Some updates

  • Coverage of Monday's Nachsin v. AOL cy pres victory for CCAF, some of which is even accurate. I was also interviewed by Reuters and the Daily Journal, but I don't see their stories yet. [Zywicki @ Volokh; Fisher @ Forbes; BLD;; Metropolitan News-Enterprise; Litigation Daily ($); Law360 ($); Wolfman]
  • In Blessing v. Sirius XM, Judge Baer denied the request for a punitive appeal bond. Thanks to Adam Schulman, who took the lead in drafting the successful opposition brief.
  • The Dewey v. VW oral argument in the Third Circuit looks like it will be scheduled in late March.
  • We filed our objection to the fee request and structure in the second Classmates settlement. Dan Greenberg will argue at the fairness hearing December 15.
  • Yes, that Apple Magsafe class action settlement you've gotten an email for is likely unfair given the artificial restrictions on the claims process. We have one class member as a client, perhaps two.

Tuesday, November 22, 2011

Ninth Circuit cy pres victory in Nachshin v. AOL

We've been at the forefront of noting the problem of abusive cy pres; originally intended as a last resort "second-best" way to benefit the class after resolution of a case where there is leftover money, too many class actions use cy pres as a first resort to exaggerate the class benefits, or to siphon some of those benefits to the class attorneys or the defendants or, shockingly, the judge. A couple of recent decisions speak out against free-flowing cy pres. In Klier v. Elf Atochem, the Fifth Circuit struck down cy pres given to local charities instead of to undercompensated class members; Alison Frankel has good coverage.

And yesterday, in a case I argued, Nachshin v. AOL, Inc., the Ninth Circuit adopted much of the reasoning of our briefs in striking down cy pres to local Los Angeles charities unrelated to the class or the claims of the lawsuit:
When selection of cy pres beneficiaries is not tethered to the nature of the lawsuit and the interests of the silent class members, the selection process may answer to the whims and self interests of the parties, their counsel, or the court. Moreover, the specter of judges and outside entities dealing in the distribution and solicitation of settlement money may create the appearance of impropriety.
Thanks to Darren McKinney for being willing to stand up to abusive class action settlements, even it meant publicly admitting that he had an AOL account. Additional coverage at

Wednesday, November 16, 2011

Online DVD Rental Antitrust Litigation / Wal-Mart/Netflix Settlement

Class members (including me) are getting email notice of a class action settlement with Wal-Mart in the Online DVD Rental Antitrust Litigation, No. M 09-2029 PJH (N.D. Cal.). Wal-Mart will pay $27,250,000, in "cash and gift cards" to a settlement fund to be distributed to the class and lawyers.

Of course, there are 40 million class members. That's 68 cents a class member. And you can only get cash if you spend 44 cents on a stamp to submit your claim, though it's possible to ask for a gift card on line.

But wait, there's more. The attorneys and class representatives are asking for $8,592,500 of the $27 million. And "notice and administration costs"—the amount of which is entirely undisclosed—will be deducted from the $27 million before the class will get anything. (This contradicts what the parties told the court in the motion for preliminary approval, which said the entire amount after attorneys' fees and expenses would go to the class.) In reality, the attorneys are asking for over a third and perhaps as much as half of the money available for the class.

That would be bad enough, but the "gift-card" aspect makes this a coupon settlement (the coupons cannot be sold and are good only at Wal-Mart—again, contradicting the motion for preliminary approval, which falsely called them "fully transferable"), and there seems to be no plan to have a fee request that complies with the Class Action Fairness Act's restrictions on coupon settlements.

Lots of class members have contacted us, and, yeah, we're going to be objecting to this one.

Update: a class member writes me to point out that I was misled by the notice. Though the notice says "Wal-Mart gift card," it is not a Wal-Mart gift card, because the gift card is only good at, where prices are often higher when shipping is included.

Wednesday, November 9, 2011

Barber Auto Sales v. UPS

The Center has objected to a settlement that would pay $2 million to class members (without even telling them how much of their claims are likely to be paid pro rata) and $4 million to the attorneys. Details at Point of Law. The case is Barber Auto Sales, Inc. v. United Parcel Service Co., Inc., No. 5:06-cv-04686-IPJ (N.D. Ala.).

Tuesday, November 8, 2011

Working through the email

As you might expect, I got a lot of email from the October 31 Wall Street Journal story. Between an October 31 Ninth Circuit deadline, a November 4 deadline for an objection for two clients, preparing for a three talks and a couple of hearings in the first ten days of the month, and a 1000-mile road trip to help a friend move, I haven't had the opportunity to respond to some of the more detailed emails. I'm not ignoring you, and hope to answer a lot of these over the next few days.

I'll be speaking about some of the Center's work at the Federalist Society's National Lawyers Convention Thursday afternoon. Come say hi.

Tuesday, November 1, 2011

Some updates

  • Yesterday, we filed the opening brief in our HP Inkjet Ninth Circuit appeal. Details at Point of Law.
  • The district court approved the $0 settlement in Pampers. The attorneys will receive $2.7 million. We've appealed to the Sixth Circuit.
  • The district court approved the Brazil v. Dell settlement. There have been about $0.5 million of claims, and the attorneys are to receive $6 million. We're going to appeal to the Ninth Circuit, since this pretty clearly contradicts Bluetooth. Thanks to Kyle Graham for covering the fairness hearing.
  • The plaintiffs have asked for a $200,000 appeal bond in Blessing v. Sirius XM, the case we've appealed to the Second Circuit where the attorneys got $13 million and the class got worthless coupons that the court refused to call coupons. We filed an opposition to the motion for appeal bond. The motion is entertaining: the plaintiffs complain that I've previously objected in several other cases, but if you look at their list, we won most of those objections.