Headset Settlement That Paid Lawyers, Not Clients, Is Rejected

Forbes reports on Center for Class Action Fairness' victory in a case blocking a settlement that resulted in large benefits for lawyers and much smaller benefits for their clients.

A federal appeals court in California has rejected a contested settlement over Bluetooth headsets that would have paid consumers nothing but given the lawyers who negotiated the pact $850,000 in fees. It was a victory for Ted Frank’s Center for Class Action Fairness, which sued to block the settlement, although the appeals court merely sent the whole thing back to the trial court to be reconsidered.

The decision provides yet more evidence that the real problem with these settlements lies with the judges who approve them. Class-action lawyers are peddling absolution to their targets: In exchange for a settlement that includes lucrative fees, they can obtain a court decree ending the possibility of any further litigation over the same claims. That’s powerful stuff, and it sets up an almost unsolvable conflict of interest between the lawyers angling for a fee and their largely faceless and clueless clients who have no power to shape the negotiations. That’s why the judge overseeing the case has to approve both the settlement and the fees.

Read the full article at Forbes.