Today, the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) filed a cert petition before the U.S. Supreme Court asking for review of a class action lawsuit settlement in Joshua D. Poertner v. The Gillette Co. et al. The original case centered on a lawsuit over dubious advertising claims made about Duracell batteries. Class counsel structured a settlement that paid themselves $5.7 million, paid a small fraction of class members a total of $344,850, and left over 99 percent of the class with nothing.
“The Supreme Court has an opportunity to act in the interest of all consumers by forbidding class action attorneys from making themselves the primary beneficiaries in settlements,” said Ted Frank, CEI senior attorney and director of CCAF.
CCAF is appealing a decision by the U.S. Court of Appeals for the Eleventh Circuit that upheld the settlement. If the Supreme Court agrees to hear the case, the high court could resolve splits in circuit court decisions and establish a nationwide standard for evaluating class-action settlements, including the use of cy pres awards.
Cy pres awards are dollars given to nonprofits and universities often affiliated with the attorneys or the defendants. Such awards can be used to create the illusion of relief, but at the expense of the class. In the Poertner case, class counsel is receiving credit and millions of dollars in fees for negotiating charitable donations of batteries that were already part of Duracell’s regular marketing program.
“Class counsel defended this result by saying everybody does it,” said Frank. “Most courts confronted with such blatant abuse step in to forbid it, but the Eleventh Circuit shrugged. Precisely because class counsel is correct that this practice is all too pervasive, the Supreme Court should intervene and stop future abusive class action settlements that cost consumers millions.”
>>View the cert petition in Frank v. Poertner.
>> View the original objection to the settlement in Joshua D. Poertner v. The Gillette Co. et al.
>> View Ted Frank's blog post on the case.