In a victory for class action fairness, the Ninth Circuit Court of Appeals vacated $8.7 million in fees for plaintiffs’ attorneys in Re: EasySaver Rewards Litigation. CEI's Center for Class Action Fairness (CCAF) objected to and then appealed the approval of a nationwide class settlement where 0.2% of the class received a $225,000 cash benefit, and the remaining class members received low-value coupons. In the same settlement, over $8 million went to the plaintiffs' lawyers and $3 million in cy pres to local San Diego universities, including class counsel's alma maters.
The court ruled that the district court failed to apply the Class Action Fairness Act (CAFA) and improperly treated the coupons as cash, which lead to the inflated $8.7 million fee calculation.
While CEI won a victory on attorneys’ fees, the Ninth Circuit upheld the cy pres portion of the settlement, holding that the district court did not abuse its discretion in approving the use of cy pres or the designated recipients. The Ninth Circuit’s decision only further illustrates why it is necessary for the Supreme Court to reverse in Frank v. Gaos and align class counsel’s incentives with those of the class.
CEI Director of Litigation Ted Frank said:
“We are gratified that the court rejected class counsel’s attempt to evade the Class Action Fairness Act’s restrictions on coupon settlements, but the fact that the court was willing to countenance attorneys choosing to prefer their alma mater and local San Diego schools to nationwide class recovery while collecting 15 to 40 times as much as their clients shows why the Supreme Court needs to reverse in Frank v. Gaos. We are considering our options for further review.”
View the Ninth Circuit’s decision here.
ABOUT: CEI’s Center for Class Action Fairness (CCAF) represents class members against unfair class action procedures and settlements. Since 2009, the center has secured millions of dollars for consumers and shareholders, winning landmark precedents that safeguard consumers, investors, and the courts.
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