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Posts Tagged ‘class action settlement’

Yesterday, the ALPS 411 Blog published my guest post titled I got this email about a class action.  What should I do?  Among other things, the post addresses how one goes about deciding whether an emailed class action notice is real or spam (or worse). 

For readers not familiar with the company, ALPS is an attorney liability insurer and financial services provider headquartered in my home state of Montana.  Be sure to check out the ALPS 411 Blog for excellent content relating to a host of topics of interest to attorneys, including ethics, malpractice, risk management, and general practice tips.

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Congratulations to my BakerHostetler partner, Bob Abrams, and the rest of his antitrust litigation team on a successful result in the Southeastern Milk Antitrust Litigation.  Below is a copy of a press release summarizing the case and settlement.  Also see these links to articles from the Wall Street Journal and Huffington Post.

Settlement brings total award to more than $300 million; agreement includes substantial changes to business conduct in the Southeast dairy industry

CLEVELAND – January 22, 2013 – BakerHostetler is proud to announce the third and final settlement agreement with the remaining defendants in the Southeast Milk Antitrust Litigation (MDL 1899—E.D. Tenn.). Dairy Farmers of America (DFA) and the remaining defendants/co-conspirators in the lawsuit that claims violation of federal antitrust laws have reached a settlement agreement with the certified class of Southeastern dairy farmers across 14 states totaling $158,600,000.

“The Southeast milk market has been reformed to the benefit of dairy farmers,” said Robert G. Abrams of BakerHostetler, lead attorney for the plaintiffs. “The monetary recovery itself is very substantial and the resulting conduct changes will significantly and positively impact competition in the southeast dairy industry.”

The settlement was reached in advance of the January 22, 2013 trial date and brings the total award for the certified class to more than $300 million. Previous settlements were reached in July 2011 with defendants Dean Foods for $140 million as well as Southern Marketing Agency and James Baird for $5 million plus changes in milk marketing conduct.

In addition to the monetary award, DFA agreed to change its business conduct in the Southeast, including taking steps to increase raw milk prices; removing cancellation penalties on certain full-supply agreements with bottling plants and not entering into new full supply agreements during the Settlement’s term; modifying membership agreements to improve farmer ability to change cooperatives; enhancing price-related information on milk checks; boosting transparency through auditing and disclosure commitments; and facilitating delegate votes on additional meaningful changes to conduct.

“We have always believed strongly in the southeast farmers’ case—a belief that has now been vindicated by three excellent settlements,” said Abrams.

The BakerHostetler team working on behalf of the certified class of Southeastern dairy farmers was led by Robert G. Abrams and includes Robert Brookhiser Jr., Gregory Commins, Joanne Lichtman, Terry Sullivan, William DeVinney, Dan Foix, Carey Busen, Bridget Merritt, Nicole Skolout.

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Strafford Publications is sponsoring a webinar on class action settlement objectors next Thursday, January 10, 2013 at 1:00 EST. This is a reprise of a webinar that I did with New Jersey Appellate Law blogger Bruce Greenberg a year or so ago.  Due to a scheduling conflict, I won’t be able to participate this time, but my partner Casie Collignon will share her valuable insights instead.  For more information and to register, click the title of the program below:

Class Action Settlement Objectors

Minimizing and Defending Against Challenges by Professional Objectors, Government Officials and Public Interest Groups

A live 90-minute CLE webinar/teleconference with interactive Q&A


Thursday, January 10, 2013 (5 days) 1:00pm-2:30pm EST, 10:00am-11:30am PST

Description

Objections by outside attorneys, government officials and public interest groups can jeopardize or delay class action settlements. Both sides can face problematic objections from “professional objectors” who may appear to be motivated solely to extract part of the fee or take over as class counsel.

Government official objections are usually aimed at coupon settlements and settlement release language intended to bind state officials. Public interest groups that file objections have varied purposes and political agendas. Coupon settlements and cy pres provisions are natural targets.

Both plaintiff and defense counsel may take advantage of several key preventative measures and tactics to ward off and protect proposed settlements from non-class counsel objectors as well as government and public interest objections.

Listen as our panel of experienced class action attorneys provides a review of trends and case law developments in settlement objections from non-class attorney objectors and government or private interest objectors. The panel will discuss best practices for plaintiff and defense counsel to minimize and overcome challenges from objectors.

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My partner, Casie Collignon, recently attended CLE International’s conference Class Actions: Plaintiff and Defense Perspectives in Chicago earlier this month, and she graciously agreed to share a summary of her notes.  Here they are for anyone who was unable to attend.  I’ll be attending the ABA’s 16th National Institute on Class Actions next week, so stay tuned for my notes from that conference as well.

On October 4th and 5th, esteemed panels of class action plaintiff and defense lawyers, along with multiple reputable class action administrators, gathered for panel discussions involving class action trends across the country from all perspectives. Below are just a few of the highlights from the conference:

  • Class Actions are not dead after DukesDukes may not have had the one-sided effect that everyone anticipated. Program Co-Director Francis Citera of Greenberg Traurig noted that class certification decisions after Dukes have been, despite popular opinion, very balanced.  In the federal courts since Dukes, there have been 32 cases certified, 33 denials of class certification, and 15 cases where certification was denied in part and granted in part.
  • Manageability remains key to certification – Even though the Dukes, Concepcion, and Comcast trends are on the tips of all class action practitioners’ tongues, manageability is still a top concern from all perspectives.  The Honorable William J.  Bauer of the Seventh Circuit opined about the importance of being able to be able to show the Court what a class action trial will actually look like.  This sentiment was echoed by plaintiff’s class action lawyer Kenneth Wexler of Wexler Wallace, who suggested that all plaintiffs’ class certification motions should be accompanied by an actual trial plan.  Defense attorney Sascha Henry of Sheppard Mullin Richter & Hampton opined  that the defense practitioner can take advantage of both the existence of a plaintiff’s trial plan or the lack of a trial plan in the manageability context.  For example, if there is no trial plan at all, the defendant can argue that the plaintiffs   have not alleged a practical way to manage the case and therefore have not met their burden of proving the manageability requirement.  Alternatively, if a plan is submitted, then the defendant has a precise manageability roadmap to attack. 
  • New settlement notice program trends – While traditional mailers and post card notices still reign supreme for claim rates, Patrick Izie of Class Action Services discussed some new media trends in class action settlements.  He opined that new media, such as QR codes, mobile device notifications, and coupon websites can have a dramatic impact on your claims rates without increased costs. And, even though the parties may not have intended their class settlements to appear on websites such as duckydeals.com, once these types of sites start listing your class action settlements, you can expect claims rates to spike.
  • Class Certification may never truly be over –   Attorney for the plaintiff in McReynolds v. Merrill Lynch, Linda Friedman of Stowell & Friedman, and class action defense lawyer Andrew Trask of McGuireWoods, both agreed that an important lesson to be learned from both the Merrill Lynch case and the recent denial of the motion to dismiss in the smaller Walmart case which is back pending in the Northern District of California, is that no ruling in the class certification context is ever truly permanent. Thus, the class action community should be on the lookout for second and even third bites at the apple with smaller proposed classes and arguments for issue class certification.

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Reuters contributor Alison Frankel authored an insightful column published August 20, 2012 entitled Foretelling the End of Money-for-Nothing Class Actions, that touches on issues similar to those raised by Brian Wolfman in two recent articles summarized in this August 15 CAB post.  In her column, Frankel comments on a recent trend, particularly in data privacy class actions, where large fee awards are requested in settlements for which no meaningful relief is provided to class members.  Oftentimes, the fee awards are justified by the value of prospective injunctive relief or by the fact of a large cash payment to charity in the form of a cy pres award, but not by any direct benefits to the class members themselves.

Frankel predicts that we have seen the “high point” in what she terms “money-for-nothing” class action settlements, pointing to a growing skepticism among judges who are asked to approve them.  While it remains to be seen if this prediction will come true, Frankel’s article, like Wolfman’s articles, should at least give pause to class action attorneys who are willing to sell out a class for personal gain: you may be getting away with this now, but at some point the courts will begin to look beyond the desire to clear their dockets and begin to question the societal value of these settlements.

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Brian Wolfman, Co-director of the Institute for Public Representation at Georgetown University Law Center, has two excellent recent posts on Public Citizen’s Consumer Law and Policy Blog that provide food for thought on the need for class action reform, and the best way to achieve reform if it is needed.

In the most recent of the two articles, Paying the Lawyer’s Expenses in Class Actions, Wolfman discusses the social importance of allowing plaintiffs’ attorneys to recover their reasonable costs incurred in successfully pursuing a class action settlement or judgment, but discusses a recent case in which two attorneys from a prominent plaintiffs’ firm were sanctioned for having claimed reimbursement for fancy dinners and first class airline tickets.  Wolfman warns about the negative impact that this type of conduct has on public perception of class actions, and makes the valuable point that even minor abuses of the system for personal gain threatens to bring scrutiny to the class action mechanism more generally, which limits access to justice that class actions may provide in meritorious cases.

In an earlier article, Important 7th Circuit Decision Rejecting Shareholder Derivative Suit, Wolfman applauds Judge Frank Easterbrook’s opinion throwing out the settlement of a shareholder derivative suit after finding that the underlying suit lacked merit and should be dismissed.  Wolfman makes the point that rather than approving a settlement that provides little or no benefit to class members on the grounds that the merits of the claims are weak, the better solution from a public policy perspective is to dismiss the case entirely.  He sums up this point concisely, “[a]n obviously meritless case should not benefit the lawyers and no one else.”

The two articles illustrate two important conceptual principles on which many consumer advocates and corporate interests may find themselves in complete agreement: First, it is the potential for abuse of class actions, and not the class action mechanism itself, that often provides the basis for legitimate criticism.  Second, courts can preserve the fairness and integrity of class action mechanism without the need for systematic reform simply by applying common sense restraints in the face of clear abuse.  I think that both of these points are correct as a matter of principle, and they are both eloquently illustrated by Wolfman’s posts.

My only question is whether the idea of preventing abuse through the application by the courts of common sense constraints, while pure in theory, is truly realistic in practice.  It only works to the extent that all judges will act as carefully and thoughtfully as the judges in the two cases highlighted above.  If courts do not dismiss all frivolous cases when a defendant files a motion to dismiss, what choice does a defendant have as a practical matter but to consider buying peace on the best terms possible, which often means paying off the lawyers at the expense of a class that the defendant doesn’t believe was harmed anyway?  And, if some courts continue let frivolous claims proceed in the hopes that the parties will settle, or turn a blind eye to small excesses in fee and cost petitions, then basic human nature says that some (but certainly not all) plaintiffs’ lawyers will continue to commit these abuses, and some (but not all) defense lawyers will play along to serve their own interests.  In the end, the cynic will question whether relying on the diligence and intellectual honesty of the judiciary and the professional integrity of the bar is a realistic path to reform.

On the other hand, for those of us who are practitioners and not policymakers, professional responsibility, appeal to reason, diligence, and intellectual honesty are the only tools we have at our disposal at maintaining the integrity of the judicial process.

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My apologies for the late notice (I’ve been on vacation), but I’ll be speaking at a Webinar on class action notice requirements tomorrow, and it’s not too late to sign up.  The panel also includes Winston & Strawn Partner Matthew Walsh and notice expert (and occasional contributor to this blog) Shannon Wheatman.  Here’s a brief description of the program: 

Attorneys’ options for delivering notice of class actions and settlements to members have increased, even as they must adhere to more stringent standards to ensure due process. Courts are more receptive to notice in forms like email, websites, postcards and ordinary course mailings.

Even as delivery methods evolve, the words themselves remain a vital consideration for attorneys. Recent F.R.C.P. Rule 23 revisions require notices be drafted in plain and simple language. Attorneys are often not meeting the plain language standard, which can potentially jeopardize judicial review.

Defendants are obliged to comply with increased notice requirements under the Class Action Fairness Act. Failure to provide notice of a class action settlement to federal and state regulators can also lead to opt-outs by class members.

Listen as our panel of experienced litigators examines the vital notice requirements affecting due process in class actions. The panel will review email and other nontraditional means of delivering notice to members, explain avoidable mistakes that compromise meeting the plain language requirement, and discuss defendants’ need to provide proper notice of settlements.

For more information and to register for the program, visit the program page on Strafford’s website.

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