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trial lawyers and outrageous paydays

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Circuit Court of Cook County
Circuit Court of Cook County

We get class action notices in the mail all the time, and mostly just throw them out. I suspect most of them are bogus lawsuits that mostly benefit the lawyers filing the case. I wonder if their days are numbered…

But this week, the U.S. Ninth Circuit Court of Appeals put a damper on the business model of legal extortion by trial lawyers filing frivolous lawsuits. It sent this particular class-action settlement back to the lower court for reconsideration. It was the court’s first failure to rubber-stamp such a class-action settlement in eight years.

Ted Frank of the Center for Class Action Fairness had filed the objection to the settlement. “We have been saying all along that this is an abuse of the class-action process,” Frank told me. He said that the case could be a milestone in his fight to prevent such abuses.

“A defendant is willing to throw a million dollars at a case to make it go away, because it’s often more expensive to defend it,” Frank said. “And the attorneys are OK with settling for that million dollars, if they get the million dollars. But if most of the money has to go to their clients, they won’t bring the crummy cases in the first place. They’ll only bring meritorious cases.”

Frank has become the proverbial fly in the trial lawyers’ ointment, objecting again and again to bogus nuisance settlements that make up the bread and butter for some. In January, his objection helped convince a court to throw out a settlement between Classmates.com (the online social site with the annoying popup ads) and some users who felt they had been duped into signing up.

In that case — whose merits appear much stronger than the Bluetooth case — the lawyers had negotiated $117,000 for the aggrieved class, and a million-plus-dollar fee for themselves.

Frank’s organization, a nonprofit 501(c)(3), is currently fighting settlements that are overly generous to trial lawyers in cases against Kellogg, Volkswagen and Toys “R” Us, among others.

(click here to continue reading Days numbered for trial lawyers getting outrageous paydays | David Freddoso | Columnists | Washington Examiner.)

and from the Center for Class Action Fairness:

Victory: court rejects Classmates.com settlement We’d like to think our objection had at least a little to do with the end result.

This decision is not a big surprise after the court was severely critical of the settlement during the December 16 fairness hearing. We won’t know for a while why the court rejected the settlement, but Judge Richard Jones today issued an order stating that he did so, that the parties should return to litigation, and that a formal opinion would be forthcoming. (The parties might reasonably murmur that they’re hard pressed to have productive settlement negotiations until they know where they fell short in the court’s eyes.)

(click here to continue reading Center for Class Action Fairness, LLC: Victory: court rejects Classmates.com settlement.)

Written by Seth Anderson

August 24th, 2011 at 7:52 am

Posted in Business

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