April 18 press release
CENTER FOR CLASS ACTION FAIRNESS
ANNOUNCES MULTIPLE VICTORIES
WASHINGTON, DC – Today the Center for Class Action Fairness LLC announced multiple victories in class action objections it filed in five class action settlements that will result in class members receiving over $5 million more than what their class attorneys were willing to negotiate.
- In a securities class action over options backdating by Apple executives, the Center’s objection to the diversion of $2.5 million of shareholder money to unrelated third parties affiliated with the lead class counsel resulted in a modification of the settlement to ensure that class members would be given first dibs on that money. In March, the parties confirmed that class members had fully claimed the additional $2.5 million, meaning that the class would receive over $16.5 million instead of $14 million. The Center’s motion for an incentive payment to the objector and a share of the $2 million of attorneys’ fees requested by class counsel is pending in the district court. The case is In re Apple Inc. Securities Litigation, No. C-06-5208-JF (N.D. Cal.).
- The Center successfully objected to a settlement of a consumer fraud class action against Classmates.com that would have paid $117 thousand in cash and coupons to class members, but $1.05 million to the class attorneys. As a result, the parties renegotiated the settlement last month to make it easier for class members to make claims and ensure that $2.5 million in cash will be paid to the class. Preliminary review of the modified settlement is pending in the district court. The case is In re Classmates.com Consolidated Litigation, No. 09-cv-0045-RAJ (W.D. Wash.).
- The Center successfully objected to a diversion of $500,000 cy pres to unrelated third parties in a class action settlement with Toyota over antitrust allegations when the district court ordered this month that that money instead be distributed to the class. The Center’s objection to an excessive attorney-fee request from the common fund is pending, which could result in additional millions of dollars being distributed to class members. The case is In re New Motor Vehicles Canadian Export Antitrust Litigation, No. MDL 03-1532 (D. Me.).
- The Center objected to a settlement that would have distributed $1.5 million in nearly worthless coupons to millions of class members, but paid the attorneys $2.9 million. In In re HP Inkjet Printer Litigation, 2011 WL 1158635 (N.D. Cal. Mar. 29, 2011), the district court agreed with the Center that class counsel’s economic expert had wildly exaggerated the value of the proposed injunctive relief, and reduced the award to the class attorneys to $2.1 million. The Center is pleased with the favorable language in the opinion, but is deciding whether to appeal to ask the U.S. Court of Appeals for the Ninth Circuit to adopt a bright-line rule that it is inappropriate for attorneys to receive more than their putative class clients.
- In a case alleging that Costco Fuel and other gasoline retailers committed consumer fraud when they failed to disclose to consumers the law of physics that gasoline, like other liquids, expands with temperature, the parties announced a modified settlement that would provide $0 to the class while the class attorneys made a $10 million fee request. The Center renewed its objection to the settlement, presenting testimony from an economic expert, Dr. David Henderson, that class counsel’s economic expert had inappropriately overvalued the worthless injunctive relief provided by the settlement. The Center further argued that it was inappropriate for the parties to expand the class without giving new notice to the new class members who had not previously had an opportunity to object. This month, the district court agreed with the last proposition, and ordered the parties to propose new notice and schedule a new fairness hearing. The case is In re Motor Fuel Temperature Sales Practices Litig., No. 07-MD-1840 (D. Kan.).
The Center for Class Action Fairness, founded in 2009, is a not-for-profit program that provides pro bono representation to consumers and shareholders aggrieved by class action attorneys who negotiate settlements that benefit themselves at the expense of their putative clients.
Press coverage of the Center’s work is available at http://tedfrank.com/press.
The Center’s lead attorney, Theodore H. Frank, is available for comment on these cases and other issues relating to class actions, lawsuit abuse, and the civil justice system.
FOR MORE INFORMATION:
http://
http://