Here’s a great formula for becoming a rich plaintiffs’-side class-action lawyer:

  1. Copy-and-paste some cookie-cutter complaints alleging technical statutory violations. 
  2. Send demand letters to a group of deep-pocketed targets and negotiate coupon settlements with them before even filing the complaints.
  3. Then seek a six- or seven-figure award of attorneys’ fees for doing no heavy lifting, bearing no risk of non-payment, and providing no meaningful social benefit. 

But a district judge in Massachusetts recently changed the equation by cutting a class counsel’s fee request by more than eighty percent in Brenner v. J.C. Penney Co. (pdf).

Brenner was one of a series
Continue Reading Why Did A Federal Court Slash Class Counsel’s Proposed Fee Award In A Zip-Code Class Action By More Than 80 Percent?

The federal courts of appeals continue to scrutinize class-action settlements closely when the direct benefits to class members are overshadowed by the attorneys’ fees that flow to plaintiffs’ counsel. The most recent example is Greenberg v. Procter & Gamble Co. (pdf), No. 11-4156 (6th Cir. Aug. 2, 2013). In its decision, the Sixth Circuit provided guidance to practitioners regarding the fee awards and incentive payments to named plaintiffs.
Continue Reading Sixth Circuit Rejects Class Settlement Over Excessive Payments to Class Counsel and Named Plaintiffs

A new paper by Fordham law professor Howard Erichson, entitled “The Problem with Settlement Class Actions”—and a blog post about it by Andrew Trask—caught my eye.

The paper uses two recent class settlements, In re AIG and Sullivan v. DB Investments, Inc., as the springboard to discuss settlement class actions. Erichson argues that the problem with class settlements isn’t that the would-be class counsel will collude with defendants to reach a deal that sells out the rights of absent class members. Instead, he says that plaintiffs’ lawyers simply lack sufficient leverage to negotiate a fair deal because
Continue Reading Is There A Problem With Settlement Class Actions?

We’ve blogged before about federal courts’ increasing reluctance to approve class settlements that involve a significant cy pres component. The Third Circuit’s recent decision in In re Baby Products Litigation (pdf) is the latest example of this trend.

Class counsel often use the distribution of funds to handpicked charities in order to disguise the percentage of the class recovery that’s actually going right into class counsel’s pocket. That may have been what was going on in In re Baby Products Litigation. In that case, class counsel got almost five times as much money ($14 million in fees and expenses)
Continue Reading Third Circuit Rejects Class Settlement Because Class Fund Went to Class Counsel and Cy Pres Rather than Class Members

In recent years, courts generally have cast a more skeptical eye on fee requests made by plaintiffs’ counsel who have negotiated a class action settlement. In the past, courts often rubberstamped outlandish fee requests. In fact, settlements awarding class counsel “excessive attorneys’ fees with little or no recovery for the class members themselves” were the very first “abuse” identified in the findings accompanying the Class Action Fairness Act (pdf).

But even today, courts do not always slash the fees requested by counsel for the settlement class. In one recent wage-and-hour class action, Lemus v. H&R Block Enterprises LLC (pdf) (N.D.
Continue Reading What Are Courts Doing With Fee Requests Made in Connection with Class Settlements?