- Pearson Pants update: dry cleaners offered to drop their fee demand if Pearson would end case, but he declined [Marc Fisher, other Washington Post coverage, Beldar]
- Check your oil, ma’am? On second thought, if it’s going to get us sued, never mind [Reiland/Pittsburgh Tribune-Review]
- “Surprising and uncommon” resolution of med-mal case: Nebraska Methodist Health System admits error, cooperates with family on video memorializing victim and educating other hospitals about aortic dissection [Omaha World-Herald, Chamber reprint]
- Heated email exchange between perennial Overlawyered favorite Jack Thompson and Take Two game company exec [Ambrogi]
- Putting her image on a Hallmark card? Now that’s degrading and exploitative enough to make Paris Hilton want to sue [K.C. Star]
- Uncle sues nephew over season tickets to Chicago Bears at 40-yard line [Crain’s Chicago Business]
- Hurt her teeth on McDonald’s cherry pie, hurt her teeth on cheeseburger soon after — and what’s this about forged dental-work receipts? [Seattle Times]
- Wisconsin snuff users may soon be rolling in coupons following settlement of antitrust class action, lawyers to pocket $17 million [AP/Green Bay Press-Gazette]
- New at Point of Law: fiasco of UC Irvine’s withdrawn offer to Chemerinsky; judge says $500/hr is enough for lawyers in Northwest bankruptcy; law firm advertises for heart attack victims to sue over lack of defibrillators in public places; Astroturf detected in Washington-state insurance-suit referendum fight; NY Times takes skeptical look at Mount Sinai’s Selikoff Center; Jerry Brown sure fooled us, says San Diego paper; Ted expands his empire; and much more;
- A topic on which we’ve had a lot to say over the years — to what extent does the Americans with Disabilities Act apply to websites? — may be heating up again [Corporate Counsel]
- Thanks for the incoming links from, among others, Instapundit (on Ted’s reclining-car-seat post, which has drawn a bodacious number of comments), Patterico (on Jarek Molski), Bainbridge (on animal welfare laws), and Adam Smith Institute (on lawyers suing each other: “Such a pity that only one side can lose”.)
No, not $2,402 each. The $2,402 represents the total redemption of coupons by a 1,500,000-member class, or $0.0016 per class member. The Illinois state court (in the judicial hellhole of Cook County) awarded plaintiffs’ attorneys Gary K. Shipman of Shipman & Wright $1,000,000, presumably because they represented the face value of the unlikely-to-be-redeemed coupons to be in the millions of dollars. A North Carolina state judge was not impressed after he forced the forum-shopping attorneys (and defendants) to reveal the results of the settlement before dismissing a parallel lawsuit. (Moody v. Sears, Roebuck, & Co.) (via Nick Pace of RAND Institute at CL&P Blog).
Note that the widely-publicized Eisenberg/Miller class-action study, regularly cited for the proposition that state courts were no worse than federal courts in terms of awarding attorneys’ fees, would have erroneously calculated this attorney fee as 14% or so of the total settlement value, rather than the actual number of 100%. Garbage in, garbage out.
Pace mistakenly thinks that the class members were deprived of a remedy. Not really, though consumers are certainly worse off because of such litigation. Problems like this arise because a Sears is only willing to settle a frivolous consumer-fraud suit for nuisance amounts, and the plaintiffs’ attorneys just want a paycheck, so Sears is willing to pay the protection money to make the meritless lawsuit go away, since it will cost more in litigation expense to defend itself. When neither the plaintiffs’ attorneys nor the judge cares about the class members, plaintiffs’ attorneys can extract, as here, 99.9% of the settlement amount. If, on the other hand, a court ensures that the majority of a nuisance settlement must go to the ostensible plaintiffs, the plaintiffs’ attorneys will be less likely to find it profitable to bring the meritless suit and try to extort a settlement, because defendants will be more likely to find it worthwhile to defend against the suit, and the suit won’t happen in the first place. Which does make consumers better off, because then they realize a substantial part of the savings of doing business when there’s less protection money paid off to plaintiffs’ lawyers like Gary Shipman.
The Class Action Fairness Act fixes these matters—or at least it does in the cases where federal judges apply its rules and accept jurisdiction. First, CAFA effectively consolidates national class actions into a single federal jurisdiction, defendants are unable to play one plaintiffs’ attorney off of another, as happens when plaintiffs file several dozen identical and parallel class actions. Second, CAFA requires federal judges to apply meaningful scrutiny to class-action settlements and the award of attorneys’ fees, especially coupon settlements like this one. A $2402 coupon redemption with a million-dollar attorneys’ fee would have been impossible under CAFA.
When, however, judges misread the jurisdictional provisions of CAFA and remand legitimate removals back to the state courts that routinely approve such travesties, they undo the whole point of the legislation, and hurt consumers in the bargain. That Public Citizen regularly argues for such narrow readings of CAFA suggests their true interests lie with trial attorneys, rather than consumers, and that the true consumer advocates are those who support civil justice reform. (Cross-posted to Point of Law)