Legal News

Court Refuses Antitrust Settlement Where Plaintiffs Get $3 Million and Attorneys Get $14 Million
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

On Tuesday, a federal appeals court blocked a consumer class action settlement of $35.5 million with baby product companies citing concerns that left otherwise happy companies and class attorneys extremely unhappy.

In reversing a district court’s judgment, the 3rd U.S. Circuit Court of Appeals in Philadelphia found that the settlement to the class action was questionable, and it seemed the settlement was for the benefit of the companies and attorneys, rather than being made for the victims.

For instance, the court found that it was grossly disproportionate that out of the $35.5 million settlement sum, only $3 million would barely make it to the class plaintiffs, while close to five times the amount – $14 million would be going to pay attorneys’ fees and expenses.

  
What
Where


This, the court found objectionable.

The court also questioned the fact that more than half of the settlement amount, about $18.5 million was designated for charities decided by the parties. In this case the companies so sorely affected by the class action – namely Toys R US inc and other baby product manufacturers accused of conspiring to set a price floor for selling products meant for babies – were also left dejected.

However, the appeals court did not find that the U.S. District Judge was in cahoots with the manufacturers for passing such a grossly disproportionate settlement, but held that the lower court judge must have been unaware that so much money would be going to charities instead of going to the class members.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Writing for the appeals court, Judge Thomas Ambro observed, “We vacate the District Court’s orders approving the settlement and the fund allocation plan because it did not have the factual basis necessary to determine whether the settlement was fair to the entire class.”

Attorney Theodore Frank pushed his objections to the settlement and his views on the abuse of class action settlements, compelling the appeals court to recognize the disparity. And, the appeals court observed in writing, “the current distribution of settlement funds arguably overcompensates class counsel at the expense of the class.”



Theodore Frank, who leads the Center for Class Action Fairness, also commented that the decision will make attorneys “think twice when settling” a class action in this fashion.

The 3rd Circuit case is In Re Baby Products Antitrust Litigation, 3rd U.S. Circuit Court of Appeals, No. 12-1165.



 

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Real Estate Transactional Attorney with 4-12 years of leasing experience

USA-CA-Orange

Irvine office of our client seeks real estate transactional attorney with 4-12 years of experience. ...

Apply Now

Complex Litigation Attorney with 3-5 years of arbitration experience

USA-FL-Miami

Miami office of our client seeks complex litigation attorney with 3-5 years of law firm experience i...

Apply Now

Commercial Litigation Attorney with 1-3 years of experience

USA-TX-Dallas

Dallas office of our client seeks litigation attorney with 1-3 years of experience. The candidate wi...

Apply Now

Labor and Employment Attorney with 3-4 years of litigation experience

USA-CA-Los Angeles

Los Angeles office of our client seeks labor and employment attorney with 3-4 years of litigation ex...

Apply Now

RELEVANT JOBS

Legal Assistant- Bilingual

USA-NV-Las Vegas

Prestigious personal injury firm seeks superstar BILINGUAL legal assistant! Candidate MUST have...

Apply now

Paralegal

USA-AL-Montgomery

Overview The Southern Poverty Law Center is dedicated to fighting hate and bigotry and to seeking...

Apply now

Elder Law Attorney

USA-AZ-Chandler

Elder Law Attorney The candidate will represent clients in all matters pertaining to protecting and...

Apply now

Most Popular

SEARCH IN ARCHIVE

To Top