Today the Supreme Court granted cert in Frank v. Gaos, a challenge to the class action settlement negotiated by the plaintiffs’ lawyers in Gaos v. Google which provided $0 to class members and $8.5 million to be divided between the plaintiffs’ lawyers – who received $1000/hour on this case – and third-party charities unrelated to the case. The challenge was brought by the Competitive Enterprise Institute, which is representing petitioners Ted Frank and Melissa Holyoak.
CEI Director of Litigation and petitioner Ted Frank said, “We are hopeful that the Supreme Court’s review will result in a standard forbidding attorneys from misusing class action settlements to selfishly put themselves and third parties ahead of their clients.”
This unfair practice of giving away class members’ money to third-party groups is known in the legal world as abuse of the cy pres principle. CEI Senior Attorney Melissa Holyoak explains why the cy pres issue is important. “The Google settlement epitomizes cy pres abuse in class actions where the money is being funneled to class counsel’s alma maters and to entities that Google already supports. Class counsel chose their favorite charities over their clients while Google is getting credit for donations they are already making.”
The Supreme Court is expected to hear argument in this case during the fall session.
Read more about the case 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 secured millions of dollars for consumers and shareholders and won landmark precedents that safeguard consumers, investors, and the courts.