CEI Files Reply Brief to Supreme Court in Challenge to Global Fitness Class Action Settlement

Today CEI submitted a reply brief to the Supreme Court in a case involving windfall fees for class action attorneys at the expense of the people they purportedly represent. In Blackman v. Gascho, the court has a unique chance to address a deep circuit split related to how such fees are calculated.

“Courts should not rely on alternative facts to determine whether class members are being fairly treated,” said Ted Frank, director of CEI’s Center for Class Action Fairness. “We hope the Supreme Court will resolve this split amongst the lower courts and ensure that consumers are protected from abusive class action settlements.”

Our reply brief responds to arguments made by the respondents in briefs that were specifically requested by the Supreme Court. The court requested the additional reply briefs after respondents initially waived their right of response and after attorneys general from 17 states filed a brief supporting CEI’s request for review.

The outrageous aspects of the settlement at issue in Blackman v. Gascho include:

  • A $2.4 million pay-out for the class attorneys, compared to $1.6 million spread over 600,000 class members.
  • A claims process that, instead of funding direct distributions to class members, distributes a share of the settlement fund only to those class members who submit a claim. That arrangement, in effect, ensures 90 percent of the class will receive nothing.
  • Special protections added by attorneys to shield their fee award from any effort by the district court to reallocate that money back to class members.

CEI is now awaiting a decision by the Supreme Court on whether to hear this important case.

> More on Blackman v. Gascho
> About the Competitive Enterprise Institute’s Center for Class Action Fairness