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OpenMarket: Class Action Fairness

  • National Sandwich Day Sharpens Hunger for Subway Class Action Decision

    November 3, 2016

    Today is National Sandwich Day. Its origins are shrouded in history, but curious students of marketing will probably be satisfied by the University of Nebraska-Lincoln’s authoritative Food Calendar.

    It’s a good day to...

  • 5 Scariest Halloween Regulations

    October 31, 2016

    Dodd-Frankenstein

    This monster regulation stands in the way of average Americans’ access to bank services. He came to life after being cobbled together in response to the 2007-2008 financial crisis. Dodd-Frankenstein was made out of good intentions, but the unintended consequences to small banks and main street have been devastating.

     

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  • Volkswagen "Clean Diesel" Settlement Prioritizes Attorneys' Interests Over Harmed Consumers

    October 25, 2016

    Today the U.S. District Court for the Northern District of California approved a settlement in the Volkswagen Clean Diesel MDL that puts the interests of the attorneys ahead of consumers. The class action, In re Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation, No. 3:15-md-2672, arose from the emissions scandal that erupted last year following the U.S. Environmental Protection Agency (“EPA”) issuing a Notice of Violation to Volkswagen for manufacturing and installing defeat devices in certain model year 2009 through 2015 diesel vehicles, resulting in violations of the Clean Air Act’s emission standards.

    The Court also approved settlements in actions against Volkswagen by the U.S. Department of Justice (“DOJ”), on behalf of the EPA, the U.S. Federal Trade Commission (“FTC”), and California state agencies.

    The settlement...

  • Settlement Insurance Shows Need for Court Skepticism in Class Actions

    August 31, 2016

    A plaintiffs’ attorney and an insurance executive have created a business, Risk Settlements, that offers a “post-lawsuit settlement insurance product specifically designed to manage settlement risk, cap exposure and provide certainty to the uncertain world of class action settlements.” That this business model is viable—and that it purports to save class-action defendants millions of dollars in claims-made settlements—demonstrates the need for courts to provide scrutiny of what class-action settlements actually provide consumers, and to structure incentives for class counsel to minimize conflicts of interest.

    Under Risk Settlements’ class action settlement insurance, “in exchange for a fixed premium payment, the insurer covers all valid claims made pursuant to...

  • Landmark Ruling for Shareholders in Walgreens Class Action Lawsuit

    August 11, 2016

    Just weeks before the shareholder vote on Walgreens’ $4.8 billion merger with a European pharmacy, Walgreens got slapped with a class action lawsuit claiming that the legally-required information given to shareholders regarding the merger (the Proxy Statement) omitted important and relevant information.

    What a...

  • A Tale of Two Settlements: The Virtue of Being Adversarial in Class Action Lawsuits

    August 2, 2016

    I really only want to talk about one settlement—the settlement in Rougvie v. Ascena Retail Group, No. 15-cv-724 (E.D. Pa.). Ascena is the corporate owner of the Justice brand clothing franchise, which caters to pre-adolescent girls in 900 stores throughout...
  • The Seventh Circuit Considers a Costly But Useless Shareholder Settlement in the Walgreens Merger

    June 2, 2016

    The average merger and acquisition has as much chance of escaping litigation as you have of winning the lottery.

    OK, that’s a slight exaggeration. In recent years, about 97 percent of sizable mergers (those valued at $100 million or more) have been hit by shareholder challenges. These challenges usually produce bupkis for shareholders themselves; the typical settlement results in meaningless additions to the proxy materials, extravagant attorney fees to the lawyers bringing the case, and nothing else.  And that, unfortunately, is not an exaggeration. The supplemental proxy additions hardly ever provide useful information to the shareholders themselves, who essentially pick up the tab for their attorneys and get nothing in return. And because the merging companies are as eager to finish the deal as the shareholder attorneys are to collect their fees, the settlement proposals...

  • Subway Footlong Sandwich Settlement Now on Appeal

    March 30, 2016

    CEI’s Center for Class Action Fairness has appealed the district court’s approval of the Subway Footlong settlement to the Seventh Circuit Court of Appeals. 

    The saga began in January 2013 when an Australian teenager’s tweet of a not-quite-footlong Subway Footlong sandwich went viral, spawning nine U.S. lawsuits that were eventually centralized in federal court in Milwaukee. 

    After two plus years of wrangling (most of that time just spent negotiating class counsel’s fee award), the plaintiffs and defendants sought to have the court sign off on their proposed agreement. Subway agreed to require franchisees to keep a measuring tool on their premises, require monthly inspectors to inspect five loaves of white and five loaves of wheat bread, and maintain certain other trivial best-baking practices. Although the parties wouldn’t exactly let on, it is a good bet that Subway...

  • Collusive Deals with Class Action Lawyers before the Supreme Court

    March 14, 2016

    Class-action lawsuits are commonly settled for things that benefit the lawyers bringing them, not the class of allegedly victimized people they are supposedly suing on behalf of.

    A classic example is Frank v. Poertner, pending before the Supreme Court. Ripped-off class members asking the Supreme Court to hear their challenge to a class action settlement that awarded class lawyers $5.7 million, while 99 percent of class members get nothing, and a third-party nonprofit got a bunch of donated batteries. As Roger Parloff of Fortune asks, “Should Plaintiffs Lawyers Get 94% of A Class Action Settlement?” The Supreme Court should answer with a loud “No.”

    The class-action lawsuit was brought against Gillette, the maker of...

  • CCAF Asks Supreme Court to Hear Challenge on Duracell Class Action Settlement

    December 11, 2015

    Today, the Center for Class Action Fairness petitioned the U.S. Supreme Court to hear a case challenging an abusive class action practice where trial lawyers pay themselves the bulk of the cash recovery ($5.7 million), the class members receive just a fraction of that ($344,000), and the settlement hands out millions to third parties who are not part of the class.

    The original class action lawsuit, Joshua D. Poertner v. The Gillette Co. et al., centers on seven million class members who sued over dubious advertising about Duracell batteries. Class counsel structured a settlement that paid class counsel $5.7 million in fees and expenses and provided a cy pres award of $6 million in batteries to a third-party charity, while class members were awarded $3 to $6 in claims for future battery purchases...

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