The Competitive Enterprise Institute’s Center for Class Action Fairness (CEI) objected Thursday to the unfair settlement in Birbrower et al. v Quorn Foods, Inc. that leaves class members with virtually nothing, their attorneys with over half of the settlement fund – $1.35 million – and most remaining funds to an unrelated organization.
“Some people like blue cheese, and others find the idea of eating mold disgusting, but a settlement that reserves 54 percent of the fund for attorneys and only a pittance to the class is universally revolting,” said Ted Frank, director of CEI’s Center for Class Action Fairness.
Filed in the U.S. District Court for the Central District of California, CEI’s objection challenges the settlement over a lawsuit where Quorn Foods allegedly failed to disclose to customers that “mycoprotein” found in their products derives from a mold rather than another type of fungus.
The settlement ensures that few class members receive anything because it requires receipts or credit card statements for even a $5 claim. It also relies solely on internet banner ads for notice because class counsel refused to subpoena retailers for customer information and did not even use Quorn’s own email list.
The class attorneys, who stand to take home $1.35 million in fees have characterized it as a “$120 million settlement,” because all class members who retained grocery receipts for five years could theoretically receive a full refund on their Quorn purchases. But this is fiction. Less than 0.25 percent of the class files claims in other “claims-made” settlements with internet ad notice. A designated a cy pres recipient, Food Allergy Research Education, would likely receive most of the remaining $2.5 million settlement fund, nearly $1 million and more than class members are likely to benefit.
A fairness hearing will take place September 1, 2017.
See more about the case here.
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. When CEI prevails, lawyers get less, class members get more, and the rule of law is strengthened.