Value of Beck’s Beer Settlement a Case Study in Class Action Math

Wall Street Journal discusses the Center for Class Action Fairness' recent settlement and references Ted Frank on class action settlements.

Litigator and class-action activist Ted Frank raised similar concerns last year when he objected to a settlement of allegations that Gillette Co.’s Duracell unit misled consumers about the battery life of a premium battery line.

While approving the settlement, the federal trial court judge in Florida questioned the plaintiffs’ assertion that their request for $5-plus million fee was more than reasonable. The lawyers said it was only 10% of the estimated value of the settlement. “[T]he $50 million calculation is somewhat illusory, because the parties never expected that Gillette would actually pay anything close to that amount,” wrote Judge Gregory A. Presnell.

Mr. Frank told Law Blog that inflated estimates of settlement value are common in class actions and help plaintiffs’ lawyers make their fee requests “seem more reasonable.” He said he’s hoping the U.S. Supreme Court will take up the issue, saying he plans to ask the justices to review the battery settlement, which was affirmed by a federal appeals court.