Pearson v. NBTY, Inc.

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.