Just about anyone who owns a printer has strong opinions on toner cartridges. An enterprising group of plaintiffs’ lawyers sought to capitalize on consumer annoyance with printer cartridges by filing three class actions in the Northern District of California against toner manufacturer Hewlett Packard.

Their cases didn’t go so well. Some of the complaints were dismissed on the pleadings. They lost a bid at class certification. And trial court called their evidence of causation and injury "weak." These setbacks must have been particularly difficult because these plaintiffs’ counsel had spent a great deal of time and money imposing discovery … Continue Reading

 In the Northern District of California, Judge William Alsup keeps a standing order informing attorneys of how he will evaluate any proposed class action settlements. Now, one of his fellow judges has joined him. While Tijero v. Aaron Bros., Inc., 2012 U.S. Dist. LEXIS 183238 (N.D. Cal. Jan. 2, 2013) is neither a standing order nor a direct explanation of all the factors Judge Saundra Brown Armstrong might consider in a class action settlement–in fact, it appeared to be a bog-standard FLSA wage-and-hour case–it bears the distinction of being one of the few opinions to deny even preliminary approval Continue Reading

Mass torts have long been a problem for the American judicial system. Today, it’s Vioxx, the BP oil spill, and Chinese drywall. Fifteen years ago, it was asbestos, Agent Orange, and silicone gel breast implants. Back in the 1980s and 1990s, when mass torts first threatened to overwhelm crowded dockets in various jurisdictions, the courts carefully considered whether to use class actions as a means of resolving thousands of similar tort claims.

And, at that time, Columbia University law professor (and recent Daily Show guest) John Coffee wrote an in-depth examination of the … Continue Reading

I don’t usually say whether I think a class-action opinion is good or not.  For one thing, this blog has been about strategy rather than policy.  For another, I’m a practicing attorney, and I’d rather not try to second-guess judges who have to sort through layers of contentious briefing in order to decide issues in class actions.

But I’m going to make an exception for an opinion I just ran across by Judge Alsup of the Northern District of California.  This is a good settlement opinion; moreso for the fact that it has been issued before the … Continue Reading

 Still fighting a virus and a heavy schedule, so my apologies for providing only a brief post this week.  

So let me point you to a working paper from the American Antitrust Institute, titled Indirect Purchaser Class Action Settlements.  The paper was prepared by plaintiffs’ lawyers, and is

intended to respond to the contentions made by corporate interests that indirect purchaser antitrust actions benefitted only plaintiffs’ attorneys and resulted in, at best, cy pres recoveries for the indirect benefit of the class members.

While the paper may have been written to rebut "corporate interests" (presumably critics of … Continue Reading

 For plaintiffs’ counsel, one of the most important questions in a class-action settlement is how they will get paid. In McDaniel v. County of Schenectady, the Second Circuit explicitly compared the various methods of determining attorneys’ fees in class actions. McDaniel was a civil-rights case challenging strip-search policies for pretrial detainees. Approves settlement of the class action. The lower court approved the settlement, but awarded less in fees than the plaintiffs would have wanted. The analysis provides a good discussion of the advantages and disadvantages of both lodestar and percentage fees.

The case took three years of "vigorous" litigation, … Continue Reading

One of the larger points of contention in class-action settlements is the size of the attorneys’ fees. Indeed, with a few exceptions, no one defends the size of attorneys fees, and the most heated criticisms decry the size of the fees compared to the recovery the class actually receives. Which is what makes a recent case from the Ninth Circuit, In re Mercury Interactive Corp. Securities Litigation, so surprising: it turns out that Rule 23 already has one simple, often-ignored measure for limiting the amount of fees class counsel can charge.

The Mercury case arose after public … Continue Reading

 Brian Fitzpatrick (of "Objector Blackmail" fame) has published another article in the University of Pennsylvania Law Review asking the provocative question: are class-action lawyers paid too little? His provocative answer: yes they are. According to Fitzpatrick, in small-stakes class actions, lawyers should collect a 100% contingency fee. What’s his justification? An argument he refers to as "insurance-deterrence theory." Fitzpatrick assumes that any money that goes to class-action lawyers serves a deterrence function, because not only does it cost the defendant money, it also funds further opposition to corporate wrongdoing. (Fitzpatrick is not the only person to … Continue Reading

Back in 2001, Bruce G. Murphy, a California attorney, contacted the San Diego office of then-firm Milberg Weiss. He claimed to have several clients who had bought stock in Tut Systems, a technology company that had announced it was not going to meet its earning estimates for the fourth quarter of 2000. Murphy, who had provided clients for Milberg’s securities class actions before, wanted to know if the firm wished to pursue the case and pay him his customary 10% referral fee.

Four years later, Lerach Coughlin (which had broken off from Milberg) settled a securities class action … Continue Reading