This week, the Competitive Enterprise Institute Center for Class Action Fairness (CCAF) filed an amicus brief in Foster v. L-3 Communications EOTech, a class-action case over defective holographic weapon sights.
The class action settlement in EOTech is an excellent example of how attorneys can create settlements that rationalize excessive attorneys’ fees, which ultimately come at the expense of consumers. According to CCAF senior attorney Melissa Holyoak, there are two things that are holographic about this case: the target reticle superimposed in EOTech’s products and the illusion of relief this settlement provides.
“In this case, class counsel constructed a settlement where they would make $10 million—or around $1,800 per hour—while their clients would receive a coupon worth $22.50,” said Holyoak. “Not only should the court deny settlement approval because the lawyers are getting nearly three times what the class would get, but it also includes ‘clear sailing and kicker’ provisions that prevent the court from correcting the imbalance.”
According to Holyoak, class counsel has led the court to believe their settlement provided $51 million to the class, but it actually only provides approximately $3.5 million in class benefit.
>> Read the amicus here.
>> Read more about this class action settlement from CEI’s Ted Frank here.
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.
Unfair settlements generally serve self-interested lawyers and third parties at the expense of absent class members, the group of people whose rights are traded away to settle a class action. Lawyers have an interest in their fees, defendants have an interest in cheaply disposing of a lawsuit, and the class’s interests can take a back seat in the process. CEI seeks to solve these problems by representing such class members pro bono and presenting judges with the other side of the argument.