October 9, 2018
After nearly a year and a half without response from the agency, the Competitive Enterprise Institute is representing individuals taking the Federal Communications Commission to court over the 2016 Charter/Brighthouse/Time Warner cable merger. Arguing that the FCC has an obligation to respond to CEI’s June 2016 petition, the lawsuit requests the court to, urge the agency to respond to CEI.
The agency imposed harmful merger conditions on Charter that have nothing to do with the merger itself, which is why CEI filed a petition in 2016. CEI argued in their 2016 petition that the FCC doesn’t have the authority to put conditions in place when it comes to corporate mergers. These conditions will increase costs for consumers who will have to foot the bill for an overreaching federal agency.
In this lawsuit, CEI represents plaintiffs against the FCC in the U.S. Court of Appeals for the District of Columbia requesting a writ of mandamus.
On January 31, 2018, the D.C. Circuit ordered the FCC to respond to CEI’s petition.
On September 10, 2018, the FCC finally ruled after 25 months of doing nothing on CEI's petition for the agency to reconsider the conditions it imposed on the Charter/Time Warner Cable merger.
CEI Senior Attorney Melissa Holyoak responded to the FCC's order:
"CEI has demonstrated that the FCC imposed unlawful conditions on the Charter merger that would increase costs for consumers, who will have to foot the bill for an overreaching federal agency. Even though the FCC dismissed CEI’s petition, the FCC has no authority to micromanage the internet at the public’s expense and we are evaluating our options regarding appealing the FCC’s order."
October 4, 2018
In 2013, CEI's Center for Class Action Fairness objected to and then appealed the approval of a nationwide class settlement where 0.2% of the class received a cash benefit, a total of $225,000, and the remaining class members received low-value coupons. In the same settlement, $8.85 million went to the plaintiffs' lawyers and $3 million to local San Diego universities, including class counsel's alma maters. On appeal, the Ninth Circuit vacated the settlement approval and remanded for further consideration.
Plaintiffs claimed that the defendants' gift- and flower-delivery websites violated state and federal law by enrolling customers in rewards programs after luring them with the promise of worthless coupons. Oddly, class counsel negotiated a settlement consisting almost entirely of low-value coupons for class members. These coupons were nearly worthless as they expired after a year, were devalued because they precluded the use of standard freely-available 20% discounts, and could not be used on major holidays such as Valentine’s Day, Mother's Day, or Christmas. Nevertheless, the district court approved the settlement again on August 9, 2016, and CCAF again appealed the settlement approval.
At the Ninth Circuit, the plaintiffs filed a motion for summary affirmance that was denied. CCAF filed its opening brief on May 1, 2017. That same month, 13 state attorneys general filed an amicus brief supporting CCAF’s challenge. Oral argument will be heard on May 17, 2018.
June 26, 2018
The Center became involved in the case in 2014 when it objected to a class action settlement that would have provided attorneys $4.5 million but less than $900,000 to the class. On appeal, the Seventh Circuit agreed and reversed approval of the “selfish” settlement. Thanks to the Center’s objection, the parties negotiated a new settlement providing the class with more than $3 million additional recovery. The new settlement was approved August 25, 2016.
The new settlement was opposed by three professional objectors—that is, objectors who threaten to hold up a class action settlement unless they are paid to go away. Courts and commentators have criticized professional objectors, who essentially demand blackmail from settling parties. In this case, the settling parties are believed to have paid the three appellants to drop their appeals, which they did November 7.
On July 31, 2017, CEI filed its opening brief in its appeal of the district court’s handling of the new settlement in the 7th Circuit Court of Appeals.
May 11, 2018
CEI's Center for Class Action Fairness objected to a cynical class action settlement in Campbell v. Facebook, Inc. This class action arose from Facebook's alleged practice of capturing and using URL content in its users' personal Facebook messages without their consent. The parties reached a lopsided settlement in which the plaintiffs' attorneys recover $3.9 million while the class gets injunctive relief consisting of 22 words regarding Facebook's practices added to a Facebook help page.
Class member Anna St. John objected to the unfairness of this disproportionate allocation and to the inadequacy of the class representatives who tried to foist such a settlement on the class with no notice other than postings on the law firms' websites.
The fairness hearing was held on August 9, 2017. The U.S. District Court for the Northern District of California approved the settlement on August 18, 2017.
"We had hoped the court would recognize that this settlement exemplifies the worst of lawyer-driven class actions and should not be approved under existing law,” said CCAF director Ted Frank about the decision. “The class relief is entirely illusory and yet the attorneys claim they are entitled to millions of dollars in fees."
CCAF has appealed to the Ninth Circuit.
April 30, 2018
In the original case, Gaos v. Google, plaintiffs sued Google seeking trillions of dollars in statutory damages for alleged federal privacy violations over their search engine. CEI's Center for Class Action Fairness objected to the class action settlement negotiated by the plaintiffs' lawyers in Gaos v. Google because it provided $0 to class members and $8.5 million to be divided between the plaintiffs’ lawyers – who received $1000/hour on this case – and cy pres recipients. Cy pres recipients included organizations that were not parties in the litigation, including class counsel's alma maters, and several organizations that Google already supports through donations.
The U.S. District Court for the Northern District of California approved the settlement in Gaos v. Google over CCAF's objection. CCAF appealed the settlement approval to the Ninth Circuit, and oral argument was heard on March 13, 2017. On August 22, 2017, the Ninth Circuit affirmed the district court’s order approving a cy pres only settlement. On September 5, 2017, CCAF requested a rehearing.
CCAF has been a pioneer of protecting consumers and shareholders from the abusive practice of cy pres, winning landmark appellate decisions on the question in 2011, 2013, 2014, and 2015. The Ninth Circuit court’s decision on this case could affect future class-action settlements, especially the use of cy pres awards.
On September 5, 2017, CCAF requested a rehearing, but the Ninth Circuit denied motions for rehearing and rehearing en banc October 5, 2017. CCAF petitioned the U.S. Supreme Court to review the case on January 3, 2018. The Court has previously expressed interest in addressing cy pres issues.
Watch the March 13 oral argument below or on YouTube.
December 4, 2017
The Center for Class Action Fairness (CCAF) at CEI filed an appeal brief in the Transpacific Passenger Air Transportation Antitrust Litigation on November 4, 2015, in the U.S. Court of Appeals for the Ninth Circuit.
The underlying class action litigation alleged a conspiracy of numerous international air carrier defendants to fix prices in violation of the Sherman Act and sought recovery for passengers who had purchased transpacific air travel from the defendants and their alleged co-conspirators. Eight of the thirteen defendants have settled. This appeal relates to the district court’s approval of five of these settlements.
The case settlement contained excessive attorney fee requests of over $16 million and improper settlement class certification. Though class members had claims of wildly differing values, there was only one settlement class that treated all class members the same, leaving a settlement that was not proportional to the harm. The district court approved the settlements, but reduced class counsel's request for attorneys' fees and expenses by over $5.1 million, for the benefit of the class.
CCAF argues that the settlements inappropriately treat all class members identically despite facing materially different affirmative defenses, creating intraclass conflicts that preclude a finding of adequate representation.
Oral argument before the Ninth Circuit was held on April 21, 2017. The court ruled against CCAF's objection on June 26, 2017. CCAF subsequently filed for en banc review before the Ninth Circuit on July 10, 2017.
On August 10, 2017 the court denied CCAF’s request for en banc review.
On October 31, 2017, CEI filed a petition for writ of certiorari before the U.S. Supreme Court.
On December 4, 2017 the U.S. Supreme Court denied CEI's cert petition.
September 6, 2017
CEI’s Center for Class Action Fairness appealed the approval of several settlements in multi-district litigation concerning the sale of motor fuel, which has been ongoing for many years. In 2006-07, plaintiffs sued retailers for selling gasoline by volume, alleging that such sales failed to account for fuel expansion and contraction with temperature and constitute consumer fraud for failure to disclose the laws of physics. The cases were consolidated in the U.S. District Court for the District of Kansas.
Collectively, the settlements provide plaintiffs’ attorneys with nearly $19 million in attorneys’ fees, while absent class members receive nothing.
Costco was the first defendant to settle, offering zero dollars to the class, but millions of dollars in attorneys’ fees, and injunctive relief—a promise to install automatic temperature correction (ATC) pumps in certain states if it is legal. Currently, no state expressly allows fuel to be sold by anything except volume, and sales using ATC would actually harm consumers. A cost benefit analysis by the California Energy Commission concluded in 2009 that non-volumetric sales would result in a “negative or a net cost to society under all the options examined.” For these reasons, CEI successfully objected on behalf of class members to the Costco settlement in 2010, but the parties secured approval of a revised settlement in 2013. The district court would not decide fees until 2016.
August 25, 2017
CEI's Center for Class Action Fairness is challenging the legality of a class action settlement with Google that provides millions of dollars to the attorneys, and zero dollars to the class. Class members, who waive all rights to damages under the settlement, receive the same benefit whether or not they opt out.
In the original class action case, plaintiffs sued Google for alleged federal privacy violations over Google's circumvention of Safari browser users' privacy settings, but class counsel negotiated a settlement that provided $0 to class members and $5.5 million to be divided between class counsel and third-party charities. One of those charities is a non-profit for which co-lead counsel serves as chairman of the board, and several others are charities to which Google routinely donates, bringing into question the benefit to the class.
The Center for Class Action Fairness (CCAF) objected to the settlement, but was overruled by U.S. District Court for the District of Delaware on February 2, 2017. CCAF director and class member in this case, Ted Frank, filed a notice of appeal on March 1, 2017. CCAF is challenging the final approval of the class action settlement in the U.S. Court of Appeals for the Third Circuit.
In July 2017, 13 state attorneys general filed an amicus brief in support of CCAF's objection. The state attorneys general agree with CCAF that the feasibility of distributing funds depends on whether it's impossible to distribute funds to some class members, not whether it's possible to distribute to all class members. According to CCAF director and senior attorney Ted Frank, this is an important distinction that helps prevent nearly every class-action settlement from turning into an abusive cy-pres-only settlement, which harms class members.
July 25, 2017
The Center of Class Action Fairness (CCAF) was appointed as a special amicus curiae to defend the judgement of the U.S. District Court for the Western District of Arkansas, which reprimanded five plaintiffs’ attorneys for acting in bad faith for the improper purpose of forum selection.
Instead of protecting the interests of their clients, plaintiffs’ attorneys signed a settlement to dismiss the case from federal court, where it had been removed, and immediately refiled in Arkansas state court, which was more likely to approve their questionable fee request. The settlement provided plaintiffs’ attorneys $1.85 million in fees, but only provided class members at most $300,000. After learning about this agreement from the Arkansas Business newspaper, the district court judge ordered that the attorneys show cause why they should not be sanctioned. After two rounds of briefing and hearings, the district court issued reprimands to five of the fifteen attorneys that had appeared, finding that these counsel abused the judicial process in bad faith. CCAF filed the brief following appointment as amicus by the Eighth Circuit because there was no appellee to defend the district court's decision.
On July 25, 2017, the U.S. Court of Appeals for the Eighth Circuit reversed the judgement of the district court ruling the plaintiffs attorneys did not violate the law.
July 21, 2017
CEI, the Consumer Advocates for Smoke-free Alternatives Association (CASAA), and former CEI employee Gordon Cummings today filed a lawsuit in April 2016 challenging a U.S. Department of Transportation (DOT) regulation that bans the use of electronic cigarettes on planes.
The lawsuit alleges DOT has no authority to issue such a ban and that the agency is illegally rewriting congressional law. In 1989, Congress authorized DOT to issue rules banning in-flight smoking. But, as DOT itself admitted when it first proposed to ban in-flight e-cigarette use, electronic cigarettes involve neither combustion nor smoke.
Until the final rule, issued in mid-February, airlines were free to voluntarily prohibit vaping aboard their aircraft, and most did. The airlines’ ban means that DOT’s rule is not only illegal but unnecessary.
On April 28, 2016, CEI filed its initial suit against the DOT before the United States Court of Appeals for the District of Columbia. On November 4, 2016, CEI filed its reply brief before the court. On April 10, 2017, the court heard oral argument in the case. Listen to the April 10 oral argument here.
On July 21, 2017, by a 2-to-1 majority, the appeals court said that DOT could ban e-cigarette use on planes under Congress’s 1987 no-smoking law for airlines. In a lengthy dissent, Judge Douglas H. Ginsburg stated that this was an unjustified distortion of the statute’s meaning. Airlines already ban vaping on planes, but DOT nonetheless imposed its own regulatory ban as well, essentially freezing those airline policies in place.
Sam Kazman, CEI general counsel, made the following statement on today’s ruling: