Posts Tagged ‘attorneys’ fees’

“Courts Should Stop Approving Unfair Class Action Settlements”

A “claims-made” class action settlement

allows the defendant to make a large amount of money “available” to class members, but in order for the members to collect, they must jump through the hoops of correctly filing claims. Because of the low response rate in such settlements, the defendants will end up paying much less than the funds made available. Indeed, of the $8.5 million made available to the class members [in an action over gym membership fees], Global Fitness only paid $1.6 million — a payout of approximately 10 percent of the settlement funds. Despite this low payout to plaintiffs, class counsel are still paid a certain rate based on the funds that were made available — not the funds that were actually paid out — in some instances giving them attorney fees larger than the class members’ damages award!

The class counsel here were paid $2.4 million, nearly $1 million more than the class members collected.

Josh Blackman, a Cato adjunct scholar and law professor, is a member of the class and raised objections to the settlement. [Ilya Shapiro and Frank Garrison, Cato, on Blackman v. Gascho]

Liability roundup

CRST Van Expedited v. EEOC

Another unanimous loss for Obama, another trip to the dunking booth for the Equal Employment Opportunity Commission: my new Cato post on last week’s Supreme Court decision on the proper standard for awarding attorneys’ fees to prevailing defendants in Title VII employment discrimination cases. Justice Thomas has it right in his concurrence: the ruling at hand is all well and good, but the Court needs to go further and rethink precedents that bend over backward to give prevailing employment plaintiffs a set of fee entitlements that it does not allow to prevailing defendants (& welcome SCOTUSBlog readers).

“‘Good ol’ boys club’ in multidistrict litigation: Same plaintiffs firms repeatedly lead suits”

A familiar roster of plaintiff’s firms keep grabbing profitable lead positions in mass litigations that begin with multiple filings in different states. Judges and critics suspect that committees are often overstaffed to set up a likelihood of higher fees, and that cozy mutual backscratching helps allocate lucrative positions to repeat players in the club. [Amanda Bronstad, National Law Journal]

Arizona cops vs. Rhonda Cox’s truck

Cato’s Caleb Brown talks with attorney J. Cabou about the legal fight over Arizona’s civil asset forfeiture law, which authorizes “one-way” fees to be made available to prevailing law enforcement, but not to prevailing citizens. Note, by the way, that the (very real) due process objections to one-way fee-shifting are in many ways equally applicable to one-way fee-shift provisions found in numerous other areas of law, including discrimination and environmental statutes.

“Only two of the estimated 232,000 class members claimed the coupons”

“Only two of the estimated 232,000 class members claimed the coupons” in a class action led by Edelson McGuire LLP. Defendant Dick’s Sporting Goods “agreed not to oppose the plaintiff’s request for $210,000 in attorney fees and costs and a $3,500 incentive award,” but an Orange County, Calif. judge took away a large chunk of that sum because… why? Because some of the lawyers angling for it had not been admitted to practice in California, that’s why. [Kenneth Ofgang, Metropolitan News-Enterprise; Golba v. Dick’s Sporting Goods, unpublished]

Law enforcement for profit roundup

  • One Oklahoma official used asset forfeiture to pay back his student loans, another lived rent-free in a confiscated house [Robby Soave, Reason]
  • Per ACLU, Arizona has a one-way legal fee rule in forfeiture cases, with prevailing police allowed to collect from property owner but not vice versa [Jacob Sullum]
  • From Michael Greve, some thoughts on prosecution for profit and where money from public fines should go [Liberty and Law]
  • About the Benjamins: Philadelphia mayor-to-be cites revenue as reason to let parking officers ticket sidewalk users [Ed Krayewski, Reason]
  • Captive market: with wardens’ and sheriffs’ connivance, prison phone companies squeeze hapless families [Eric Markowitz, IB Times]
  • Former red light camera CEO pleads guilty to bribery, fraud in Ohio [Cyrus Farivar, Ars Technica]
  • Taxpayers lose as Maine counties jail indigents over unpaid fines [Portland Press-Herald]
  • “St. Louis County towns continue to treat residents like ATMs” [Radley Balko]

Jury rules against Ellen Pao; fees fail to shift

A San Francisco jury has found no improper gender discrimination or retaliation by Kleiner Perkins and returned a defense verdict in Ellen Pao’s high-profile lawsuit [Mashable, Roger Parloff/Fortune (noting judge’s evidentiary rulings favorable to Pao)] Pao’s “lawyers also missed out on a payday that could have reached into the millions of dollars.” In particular, “had Pao won on any of her claims, under California law her legal team, led by longtime San Francisco employment lawyers Alan Exelrod and Therese Lawless, could have sought all its fees from Kleiner.” [Reuters] One-way fee-shifting rules like those in discrimination law, especially with the further “win on any claim, collect all legal fees including those spent pursuing losing claims” refinement, diverge sharply from the principles of two-way loser pays followed in other advanced nations, but have the result (and the intent) of strongly incentivizing speculative litigation. The only real way to go further would be to order defendants to pay both sides’ fees even when the defendants win outright, as Kleiner did; but as of yet even California law does not go that far.

P.S. Apparently even a lost case counts as valuable promotion for the California plaintiff’s employment bar [Margaret Cronin Fisk, Bloomberg, auto-plays]