In objection to $14 billion VW deal, Ted Frank claims class lawyers breached duty
Reuters reports on CEI's Center for Class Action Fairness's objection to the proposed Volkswagen emissions settlement. Reporter Alison Frankel calls CCAF's Ted Frank a "class action maverick" and "among class action lawyers' most feared objectors."
Class action maverick Ted Frank of the Competitive Enterprise Institute has filed an objection to the proposed $14.7 billion settlement between Volkswagen and owners and lessors of its two-liter engine clean diesel cars, arguing that class members could have obtained the same relief if private lawyers hadn't been involved in the deal. In fact, the CEI brief alleges that clean diesel owners are worse off because class action lawyers inserted themselves into negotiations between VW and state and federal regulators.
As for class lawyers breaching their duty, CEI claims that plaintiffs' lawyers obtained nothing more for their clients than government negotiators won from VW, yet want to collect as much as $332 million in fees and expenses. It is no improvement, according to CEI, that class counsel structured the settlement so that their fees and expenses will be negotiated separately from the class deal and will be paid directly by VW, rather than from the class settlement fund.
In fact, CEI contends, that arrangement is deeply suspect. It leaves class members in the dark about what their lawyers will collect, the objector's brief said, and probably cost class members hundreds of millions of dollars because VW was likely expecting class lawyers to ask for more money so ceded less to the class in settlement negotiations. Class lawyers compounded the betrayal, according to CEI, when they failed to demand that VW give class members any difference between the maximum VW agrees to pay and whatever class lawyers are ultimately awarded by U.S. District Judge Charles Breyer of San Francisco, who is overseeing the case.
About 15 objections, some on behalf of several VW class members, were filed as of the Sept. 16 deadline. Frank and the CEI are among class action lawyers' most feared objectors.
Read the full article at Reuters.