Posts Tagged ‘class action settlements’

February 15 roundup

“The Met wins admission charge lawsuit, but lawyer may rack up $350K”

“The big winner from a lawsuit against the Metropolitan Museum of Art over its recommended $25 admission charge is the plaintiffs’ lawyer — who is seeking a staggering $350,000 fee for handling a case that resulted in a nonmonetary settlement.” [Julia Marsh, New York Post]

More: Center for Class Action Fairness has objected.

February 8 roundup

  • Freedom of association is at risk from California’s effort to crack open donor names of advocacy nonprofits [Ilya Shapiro on Cato Ninth Circuit amicus]
  • “Center for Class Action Fairness wins big in Southwest Airlines coupons case, triples relief for class members” [CEI, earlier here, here]
  • Campus kangaroo courts: KC Johnson and Stuart Taylor Jr. have spent a week guestblogging at Volokh on their new book (first, second, third, fourth, fifth, earlier links; plus Christina Hoff Sommers and WSJ video interviews with Stuart Taylor, Jr.]
  • Despite his I’m-no-libertarian talk, two 2015 cases show Judge Neil Gorsuch alert to rights of Drug War defendants [Jacob Sullum]
  • Drug pricing, estate/inheritance double tax whammy, shaken baby case, mini-OIRA in my new Maryland policy roundup [Free State Notes]
  • And the legal fees flowed like water: dispute with Georgia over water rights has clocked $72 million in legal bills for Florida [Orlando Sentinel]

“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]

Litigation roundup

  • Settlement insurance, a new litigation-finance mechanism, can have the unintended result of casting light on just how little benefit some class actions provide to consumers [Ted Frank, CEI] Yet another new litigation finance mechanism: trial-expense insurance purchased by lawyers [Bloomberg/Insurance Journal]
  • South Carolina law firm sues 185 different defendants in the average asbestos case it files, and it’s still far from tops in that department [Palmetto Business Daily]
  • “Those terms and conditions (that nobody reads) could cost New Jersey retailers” [Tim Darragh, NJ.com on class actions under pre-Internet-era state consumer protection law]
  • Some federal courts, while paying lip service to the important Rule 26 discovery reforms that took effect Dec. 1, continue in their old ways, “effectively applying the old standard” [James Beck]
  • “Can Pokémon Go and Product Liability Coexist?” [Julie Steinberg, BNA/Product Safety & Liability Reporter, earlier]
  • “How does privatization affect liability?” [Sasha Volokh]

Liability roundup

Daniel Fisher on the VW settlement

The big Volkswagen settlement dishes out a large pot of money for owners of VW diesels, whether they feel injured or not. “A roster of the country’s biggest class-action firms will get an unspecified but huge amount of fees, likely measured in the billions. And buried in the 42-page proposed settlement are tidbits for other folks, including the professional association for state attorneys general and manufacturers of electric cars. … Some AGs justify such payments as reimbursement for their investigative expenses, but as tax-supported officers it is not clear why their professional association should get the money.” [Daniel Fisher, Forbes]

Liability roundup

Bloomberg profiles Ted Frank

Ted Frank, who directs the Center for Class Action Fairness and was long a co-blogger here at Overlawyered, is the subject of this Bloomberg/BNA profile from Steven Sellers of Class Action Litigation Report. A master key to Ted’s analysis of class action settlement incentives? “The Posner and Easterbrook decisions on class actions… pervade everything I do,” he says, referring to economically informed Seventh Circuit judges Richard Posner and Frank Easterbrook, both also associated with the University of Chicago law school, where Ted studied. Chicken offsets get a mention, too.