February 16, 2018
This class action involves claims that Wines 'Til Sold Out sold wines with advertised "Original Prices" and percentage discounts that were deceptive because the wines were never sold at that original price and, as a result, consumers were erroneously led to believe they received a greater discount than they did. Under the settlement, class members who submit a claim will receive "credits" in an amount between $0.20 and $2.00 that can be used to purchase wine from Wines 'Til Sold Out through its website for a period of one year.
Although the parties failed to address the Class Action Fairness Act in their court filings, this settlement contains a number of abusive features that the Act sought to stamp out: Class members cannot choose cash in place of a "credit," meaning they are required to do business with the defendant in order to recover; the credits are only available through a claims process; they expire in one year; and a maximum of $2.00 in credits can be used toward each purchase. Claims and coupon redemption rates in low-value consumer settlements such as this are notoriously low. While class members receive nominal benefits under the settlement, class counsel is seeking $1.7 million in fees and expenses, unopposed by Wines 'Til Sold Out, without regard to the actual recovery by class members. The result is a settlement that impermissibly allocates the bulk of the settlement benefit to the class attorneys rather than class members.
February 8, 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.
February 8, 2018
This class action relates to a data breach of Anthem's computer system containing personal information of 78.8 million people, with a claims-made settlement that proposes to pay $40.95 million to class counsel, $23 million to settlement administrators, and $52 million to the class in the form of credit monitoring and cash.
On behalf of class member Adam Schulman, CEI is challenging the excessiveness of the attorneys' fee request. In particular, CEI is arguing that because this is a megafund case, any fee award should be significantly less than the 25% benchmark; the unusually sizable settlement-administration costs require reduction in the valuation of the settlement; and plaintiffs' counsel drastically overstated their lodestar with millions of dollars of work by contract attorneys billed at excessive rates and with duplication of effort.
CEI asked the court to investigate overbilling that was not disclosed to the court or the class. Judge Koh agreed and appointed a special master to investigate overbilling in the Anthem case on February 8, 2018.
February 7, 2018
The Competitive Enterprise Institute filed a lawsuit against the U.S. Department of State to force it to comply with four Freedom of Information Act (FOIA) requests related to its work on the Paris Climate Agreement.
CEI’s FOIA requests seek to gain a better understanding of why the Paris Climate Agreement was not considered a “treaty” by the Obama Administration when it was signed in 2015, and of what steps the State Department took to orchestrate that signing. The requests seek information about the State Department's use of "validators" on this issue—outside experts and groups who agreed to provide commentary in support of the State Department’s agenda.
This information is important to the American public, as the Trump administration still needs to provide a plan and timeline for withdrawing the United States from the Paris Agreement. Information on the State Department’s use of validators will give Americans a better understanding of why certain claims were made by some experts and news organizations, and why these newsmakers supported the State Department’s claim that the Paris Agreement was not a treaty.
CEI is also seeking online communications such as the encrypted app WhatsApp that State Department officials use to communicate about the agreement.
The State Department had 20 working days to provide CEI with its estimate of the number of relevant documents and what it planned to withhold from disclosure. It failed to do so, and CEI is asking the court to order the production of the documents.
Read CEI’s complaint and the original FOIA requests below.
January 30, 2018
In Leung et al. v. XPO Logistics, Inc., CEI is objecting to a class action settlement fee request in a case involving an IKEA contractor’s alleged 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 recent furniture delivery by the contractor.
CEI argues the plaintiffs’ attorneys are attempting to overpay themselves by taking over one-third of the net settlement fund, or $2.33 million, which is substantially more than the median fee award in similar cases. The settlement proposes to distribute checks from a $7 million fund—less attorneys’ fees and administration costs—to the fraction of 313,000 class members who file claims. 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.
Plaintiffs’ attorneys also failed to document the time they spent on the case. Based on past TCPA cases, it’s likely a $2.33 million fee award is five or ten times the base amount of hourly fees (called a “lodestar”) that the attorneys would normally receive. Therefore, even a 25% award likely overcompensates attorneys.
January 25, 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.
December 18, 2017
In May 2016, CEI requested copies of all “common interest agreements” that were made with or that mentioned other state attorneys general or certain environmental activists from New York Attorney General Eric Schneiderman. The request was made under New York’s Freedom of Information Law (FOIL). The common interest agreements at issue were the organizing documents behind the AG Schneiderman’s multi-state campaign to shut down free speech about the climate science debate. More on this campaign can be found at cei.org/climatesubpoena.
AG Schneiderman’s office denied the request, claiming that the documents were exempt from disclosure. CEI challenged the denial in a lawsuit, CEI v. The Attorney General of New York, filed in New York State court on August 31, 2016. AG Schneiderman moved to dismiss the case. Among his claims was that the lawsuit was moot because a copy of the agreement, released by some other source, had become available on the Internet.
On November 22, 2016, the court ruled in favor of CEI, holding that CEI was entitled to an official copy of the agreement. It characterized AG Schneiderman’s claims as “nothing more than a parroting of statutory language, and thus a complete failure of its obligation ‘to fully explain’” its refusal to produce the document. The court also invited CEI to file for attorney fees under the New York FOIL.
When CEI submitted its attorney fee petition, the AG Schneiderman challenged it, and also took issue with the court’s FOIL ruling. On April 19, 2017, the court granted CEI’s fee petition in large part, and once again criticized AG Schneiderman’s failure to comply with New York’s FOIL.
AG Schneiderman appealed the court's fee award. Briefing in the appeal is complete. Oral argument expected to be heard in late March 2018.
November 20, 2017
On May 2, 2017, CEI's Center for Class Action Fairness (CCAF) filed an objection on behalf of a class member to the proposed settlement in Kumar v. Salov North America Corp. This is a settlement over claims marketers of Filippo Berio olive oil deceived consumers by including the label “Imported from Italy” on their olive oil bottles, when many of the olives used to make the olive oil came from Greece, Tunisia, and elsewhere.
The settlement provides up to $5, without proof of purchase, to any consumer who is willing to attest that they relied on the product's “Imported from Italy” labeling when purchasing it. This limitation applies even though the class includes everyone who made a purchase, regardless of whether they relied on the “Imported from Italy” labeling. The settlement also enjoins Defendant from using the phrase “Imported from Italy” on its products - which matches what the company has been doing since 2015. The settlement provides attorneys’ fees and expenses of $982,500, which is four times the amount of cash they “won” for class members—a mere $210,985.
CCAF is challenging class certification, settlement fairness, and attorneys’ fees in this case. The fairness hearing was held on May 30, 2017, in Oakland, California. On July 7, 2017, the district court granted final approval of the settlement, even though more than 80 percent of the settlement fund would go to class counsel rather than the class members.
CCAF has appealed this decision to the Ninth Circuit and its opening brief was filed on November 20, 2017.
Read more about the Center for Class Action Fairness here.
November 13, 2017
CEI v. State Department seeks records under two Freedom of Information Act requests for documents relating to the December 2015 Paris climate agreement, including regarding State’s arguments about Paris’s “legal form”. Requests were sent Oct. 6 and Oct. 10, 2017, for emails of Trigg Talley, presently in Bonn at the Paris treaty talks, and Alexandra Costello, a Hill liaison who, a previous FOIA productions shows, corresponded with aides including Senate FRC Chairman Corker’s lawyer, to calm concerns after the NYT reported in August 2014 that Obama would declare Paris was not a treaty. Corker’s lawyer objected to the “disturbing contempt” for the Senate’s constitutional treaty role. CEI seeks to educate the public on State’s efforts to avoid Senate scrutiny.
October 5, 2017
The Competitive Enterprise Institute sued the Department of Justice for emails from former Attorney General Loretta Lynch’s alias email address that used the name “Elizabeth Carlisle." In yet another example of a high ranking official in the Obama administration using an alias email address, CEI sought emails from the Carlisle account which were to or from Rhode Island Senator Sheldon Whitehouse. To date the DOJ has failed to provide any response to CEI’s August, 2017, Freedom of Information Act request for these emails, so CEI is suing the department. CEI noted in its original FOIA request, a colloquy between former Attorney General Lynch and Sen. Sheldon Whitehouse at a March 2016 hearing of the Senate Committee on the Judiciary addressing Justice Department Operations. Ms. Lynch, responding to Sen. Whitehouse’s question about using the Racketeer Influenced and Corrupt Organizations Act, or RICO, against political opponents of the ‘climate’ agenda, stated:
“This matter has been discussed. We have received information about it and have referred it to the FBI to consider whether or not it meets the criteria for which we could take action on”.
This exchange rightly generated numerous headlines questioning this use of DOJ resources. This lawsuit is a next step in CEI’s investigation into Sen. Whitehouse's call for federal racketeering investigations of opponents of the political agenda pushed in the name of climate change. In previous document productions under state open records requests, CEI encountered the Senator corresponding (via his Cox.net account) with a Senate aide, a Judiciary Committee lawyer and various college faculty activists. Subsequently, Sen. Whitehouse engaged in a colloquy at a Judiciary Committee hearing with then-AG Lynch about using the DOJ for this purpose. Lynch stated indeed it was a matter her Department had considered.
October 3, 2017
In September 2017, in response to mounting information about the role of outside influence in developing the controversial Paris climate treaty, CEI submitted a Freedom of Information Act (FOIA) request for records relating to three top former officials in the Obama administration State Department. These requests included correspondence pertaining to two officials' work with two named environmentalist pressure groups which, records show, the officials had particularly close relationships in developing the pact. The officials are former Special Envoy for Climate Change Todd Stern and former "climate change legal advisor" Sue Biniaz.
The requests also sought certain emails and attachments pertaining to Mr. Stern's and Ms. Biniaz's roles in developing the Paris treaty's "legal form", including State's Circular 175 process and memo. Circular 175 establishes a procedure for determining whether a proposed international agreement should be negotiated as a treaty requiring Senate advice and consent through the Article II, Section 2 of the U.S. Constitution.
Finally, the requests sought Stern and Biniaz correspondence with former State Department Director of Policy Planning Jake Sullivan.
To date, State has provided none of the required demonstration it is processing CEI's request. With the list of stonewalls, including but not limited to litigation, which the Trump administration has yet to address, CEI filed suit Monday, October 2, 2017 to seek prompt production of records that could prove critical in the ongoing fight to get President Trump to reverse his June 1, 2017 pledge to withdraw from Paris.
September 29, 2017
Class member and CCAF attorney Anna St. John objected to settlement approval, class certification, and the request for attorneys' fees in Ma v. Harmless Harvest, Inc. The legal claim involved whether Harmless Harvest’s labeling representations that their products were “100% organic” and “raw” were accurate. The proposed settlement provides class members with worthless injunctive relief, simply codifying labeling changes that Harmless Harvest voluntarily made in 2015. At the same time, and in a clear signal of who the settlement is structured to benefit, the class attorneys and named representatives are seeking combined payments of $575,000.
The fairness hearing will be held in early November.
September 18, 2017
Last year the Center for Class Action Fairness (CCAF) and CEI won an appellate victory over the self-serving Walgreens shareholder settlement, where the Seventh Circuit labelled merger strike suits a “racket” that “must end.”
On September 18, 2017, CCAF attorney Theodore H. Frank moved to intervene and vindicate Walgreens’ directive to end such strike suits. The underlying cases concern the acquisition of Akorn, Inc. by pharmaceutical giant Fresenius Kabi AG. Plaintiffs in these suits have convinced Akorn to pay $322,500 in attorneys’ fees, although no benefit has accrued to the class—only immaterial supplemental disclosures, just as in Walgreens. The award of attorneys’ fees constitutes an end-run around Walgreens precedent and also appears to violate the Private Securities Litigation Reform Act (PLSRA) and basic principles of federal class action law.
The Akorn cases illustrate plaintiffs’ shift in tactics since CCAF’s win in Walgreens. Instead of settling merger strike suits, plaintiffs dismiss with the understanding they will apply for “mootness fees,” of hundreds of thousands of dollars per merger. This tactic has spread like wildfire in Delaware and the Federal Courts, and has enabled a dramatic uptick in merger strike suit filings. Suits against 95 merging companies were filed in the first half of 2017 compared to only 28 in the first half of 2016.
By intervening in the Akorn cases, Frank and CCAF hope to disgorge attorneys’ fees unjustly appropriated by strike suit files, and enjoin or at least discourage the filing of frivolous strike suits nationwide.
September 15, 2017
CEI’s Center for Class Action Fairness objected to an unfair settlement deal resulting from the much-publicized 2013 data breach at retail giant Target Corporation. Forty-one million consumers had credit card information stolen and 60 million consumers had personal information stolen as a result of the data breach. But the subsequent settlement deal helped class attorneys far more than class members. The terms of the deal provided a $10 million fund to class members that, in reality, is unlikely to be exhausted, gave class counsel a disproportionate $6.75 million fee, and left a large subclass of class members with zero recovery.
Representing class member Leif Olson, CEI attorneys argued that the class action could not be certified because it froze out millions of class members, releasing their claims for no recovery, without separate representation. CEI further objected to the excessive fee request and the inclusion of a "kicker" clause, whereby any decrease in the fee request would revert to the defendant (Target).
Nonetheless, the United States District Court for the District Of Minnesota approved the settlement deal, and in 2016, CEI appealed the case to the United States Court of Appeals for the Eighth Circuit. The appeal challenged both the district court’s error that class certification could not be revisited once granted and the violation of a federal rule requiring attorneys who represent a class to fairly and adequately protect the interests of the class.
In February, 2017, CEI received an important ruling on its appeal. The Eighth Circuit remanded the case back to the district court, finding that the lower court abandoned its ongoing duty to ensure class certification was proper when the court had failed to consider CEI’s objections. Additionally, the judge reversed the lower court’s ruling for an unlawful appeal bond, resulting in $46,872 being returned to CEI.
August 30, 2017
The Competitive Enterprise Institute (CEI) sued the Department of Justice (DOJ) under the Freedom of Information Act (FOIA) on August 30, 2017, seeking documents behind a controversial take-down of thousands of university videos last spring. In March, 2017, the University of California at Berkeley removed over 20,000 online educational videos after DOJ claimed that they violated the Americans with Disabilities Act (ADA) due to allegedly inadequate captions.
In a FOIA request filed shortly after the take-down, CEI asked for documents relating to this and similar DOJ investigations. DOJ essentially denied the request, and CEI’s lawsuit challenges that denial.
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.
August 22, 2017
In this class action, plaintiffs allege that Art.com violated consumer protection laws and committed unlawful business practices by offering items on "sale" but at prices it ordinarily offers to consumers in the regular course of its business.
Under the settlement, class members will receive $10 vouchers for use on Art.com's ecommerce sites. The settlement has hallmarks of the coupon-settlement abuse that Congress targeted with the Class Action Fairness Act of 2005: Class members were not able to choose cash in place of a voucher, the vouchers expire in 18 months, and they can be used only for the narrow range of products available on those websites, where the average purchase price is almost twice as much as the voucher. Art.com also agreed to comply with the law going forward and to undertake a compliance program -- illusory relief that will not benefit the class of past-purchasing class members. Meanwhile, class counsel is seeking $745,000 in fees and expenses, unopposed by Art.com, despite notoriously low coupon redemption rates and, thus, minimal class benefit, in low-value consumer settlements such as this.
On August 22, 2017, the court issued a ruling finding the vouchers are coupons, approving the settlement, and deferring the issue of attorneys' fees until the coupon redemption rate is known. We will now await the coupon redemption information and further word from the court.
August 9, 2017
In this antitrust price-fixing case, the settlement includes classes of direct and indirect purchasers of lithium ion batteries in a variety of electronic equiment. Under federal law, however, indirect purchasers do not have a cause of action, and only about 26 states provide a cause of action for such purchasers.
As a result, a nationwide class of indirect purchasers unfairly disadvantages--and dilutes the recovery of--those indirect purchasers who have a legal cause of action in violation of Rule 23. One of the disadvantaged class members, Frank Bednarz, is objecting to challenge the class certification and settlement fairness.
Frank's objection was overruled and we have appealed to the Ninth Circuit.
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:
June 26, 2017
On behalf of class member Joshua Holyoak, CEI's Center for Class Action Fairness objected to class counsel's excessive fee request in Edwards v. Milk. Under Ninth Circuit law, the appropriate benchmark for fees in a common fund case is 25 percent. Here, class counsel sought nearly 40 percent. CCAF urged the court to reduce the percentage of fees to 25 percent of the fund, after excluding notice and administrative costs that do not benefit the class, which would allow the class to recover an additional $7.2 million.
On June 26, 2017, in a victory for CCAF, the U.S. District Court for the Northern District of California adopted some of our objections, reducing the plaintiffs' attorneys fee request by 25 percent, from more than $17 million to $13 million.
CCAF Attorney Anna St. John commented on the victory, "The Court rightly recognized that the results achieved by plaintiffs were hardly exceptional and reduced the bloated fee request accordingly. Another $4.3 million will now go where it belongs, to the class members, and not to further enrich the attorneys."