Forbes reports on Ted Frank's objection to Johnson & Johnson's settlement that will benefit the plaintiff's lawyers much more than the class members.
Ted Frank’s Center for Class Action Fairness has challenged a settlement that would pay the lawyers who negotiated it $10 million and give their ostensible clients — Johnson & Johnson shareholders — nothing.
Frank, in a filing made Friday, challenges the nuisance-value settlement, in which J&J agrees to certain governance changes it already has put in place, as “only a cosmetic sheen.” Frank is representing a J&J shareholder who challenges the adequacy of the named plaintiffs in the case, since they “have permitted their attorneys to negotiate worthless relief and pursue these proceedings solely for the benefit of the plaintiffs’ attorneys.”
Frank set up the Center for Class Action Fairness to challenge what he sees as collusive settlements between defendants who want absolution and lawyers who are only to willing to sell it to them. Unlike so-called “professional objectors,” who prey on their brethren in the class-action bar by dropping their objections in exchange for a piece of the fee, Frank says he only seeks a fee when he obtains a material benefit for the class.
In this case, he notes it is hard to see how best to make things better for J&J shareholders. The simplest solution would be for Judge Wolfson to dismiss the case because the plaintiffs who brought it appear to be incapable of directing their lawyers to negotiate an adequate settlement.
"If the Court will not dismiss the litigation, it should recognize that the only thing worse than this settlement for shareholders would be to force J&J to continue to spend money on litigation."
Read the rest of the article at Forbes.