The Competitive Enterprise Institute’s Center for Class Action Fairness (CEI) objected to the settlement in Leung et al. v. XPO Logistics, Inc. yesterday, arguing that the plaintiffs’ attorneys are attempting to overpay themselves by taking over 34 percent of the recovery, or $2.33 million of the $6.75 million class relief.
Leung et al. v. XPO Logistics, Inc. is a case involving an IKEA contractor’s potential violation of the Telephone Consumer Protection Act (TCPA). The TCPA is a law that protects consumers from telephone solicitations, and the IKEA contractor allegedly violated the law by calling customer cell phones for them to take an automated survey about furniture delivery.
In TCPA class actions settlements, the median fee recovery for lawyers is 25 percent of the net recovery. Applying a more appropriate 25 percent fee structure in this case would return over $600,000 to the class members.
“At the very least, the court should reduce the fee award to 25 percent,” said CEI attorney Frank Bednarz. “But it is very likely that a reduction of 25 percent is not enough. The class attorneys here did not disclose to the court or the class the amount of time the lawyers spent on this case. Based on past cases we’ve seen, the lawyers here may be getting paid 5 to10 times more than what they should be.”
ABOUT: The Competitive Enterprise Institute’s Center for Class Action Fairness represents class members against unfair class action procedures and settlements. Originally founded by Ted Frank in 2009, the center has won millions of dollars for consumers and shareholders and won landmark precedents that safeguard consumers, investors, courts, and the general public.