One of the manufacturers of the above Conair models, Neumax, supposedly produced especially dangerous hair dryers. Plaintiffs alleged that under normal use, these dryers could catch fire, or shoot sparks from the handle.
This seems like something you would want to know about, right? Well, unless you’re obsessively reading the legal notices in People magazine or clicking wildly on internet banner ads (yes, banner ads, like it’s 1996), the settlement agreement provides little hope you would ever find out about the settlement. Plaintiffs’ counsel could have subpoenaed customer information from retailers like CVS and Amazon to send class members direct notice, but they chose not to do so. Prior to the settlement, Conair called the notice plan “woefully insufficient.”
Even for class members who do manage to find out about the settlement, it’s needlessly difficult to get benefits. Owners of the Neumax-manufactured hair dryers are eligible to receive a replacement dryer, and owners of 259/279 hair dryers made by other manufacturers can claim $5.00. But there are hoops to jump through: all claiming class members must print out a claim form, write down two serial numbers off the dryer, and attach either a photograph of the dryer or proof of purchase, then send all of this via postal mail. No email is accepted, nor is any online filing available (like it’s 1896). Class members with a Neumax-manufactured dryer (which can be identified by an ‘N’ engraved on the plug) must also arrange to have their dryer shipped to Conair. The replacement will arrive sometime after the settlement is approved, likely months in the future.
Why would plaintiffs’ attorneys do so little to inform class members and then make it so hard to claim any benefit? Simple: plaintiffs’ counsel would prefer that money to settle the lawsuit go to themselves rather than the class.
Bad class action settlements frequently pay class members a pittance while providing disproportionate fees to attorneys. Because courts are reluctant to approve settlements that obviously pay attorneys more than class members, clever attorneys devise gimmicks to obscure this fact. One of the most frequently-abused gimmicks is a “claims-made settlement.” Instead of agreeing to pay a lump sum to the class (called a common fund), the defendant instead agrees to pay each class member a flat payment per claim. Settling parties know that only a fraction of class members will file claims even under ideal circumstances, and a difficult claims process will further depress recovery. With few benefits going to the class, the parties can agree to larger fees for counsel.
The Conair settlement provides class members with either five whopping dollars or a replacement hair dryer, but Conair agreed to pay counsel $1,196,000 cash. Counsel rationalizes their proposed fee by saying that “ $4.58 to $5.37 million” is “made available” to about a half million class members in New York and California, but few will be paid due to the lack of direct notice and pointless hoop jumping. The figures are “alternative facts”: fictional values to make the attorneys’ fees seem proportional. CEI’s Center for Class Action Fairness opposes this practice and has recently petitioned the U.S. Supreme Court to reform claims-made settlements so that attorneys’ fees are based on benefits actually given to class members.
As for the Conair settlement, one hopes that a class member investigates the unfairness of the settlement and retains qualified counsel to object. The claims deadline and the objection deadline is March 9.