Appeals Court Says Legal Fees in Diaper Suit are Ir-rashional

The Wall Street Journal's Law Blog discusses the Center for Class Action Fairness' In re Dry Max Papers Litigation case.

A U.S. appeals court on Friday threw out a settlement reached by Procter & Gamble in a class-action lawsuit over its Pampers diapers, on the grounds that too much of the money would have gone to the attorneys who brought the suit.

P&G agreed to pay roughly $3 million to settle the diaper-rash suit in 2011. Of that sum, $2.73 million was to go to the lawyers who brought the case, while a few dozen plaintiffs in the lawsuit would get $1,000 for each sore-bottomed baby. P&G also agreed to contribute $400,000 to pediatric training programs.

That settlement was challenged by the Center for Class Action Fairness, a Washington nonprofit that challenges class-action settlements it views to be unfair. “When attorneys get more than the class is getting, it’s an unfair settlement,” said Ted Frank, the organization’s founder. “The class counsel owes an obligation to its clients to get a good deal for them before it gets paid.”