Monthly Archives: January 2018

Cy Pres Settlements Under Attack Again

View David Wright's Complete Bio at robinsonbradshaw.comA good while ago, we reported in this space, about so-called “cy pres” settlements. We highlighted the Chief Justice’s cautionary comments about this practice – under which third parties, not class members, are compensated by defendants. See Marek v. Lane, 134 S.Ct. 8 (2013). After the Ninth Circuit recently approved a cy pres settlement, In Re Google Referrer Header Privacy Litigat., 869 F.3d 737 (9th Cir. 2017), which awarded plaintiffs’ counsel $3.5 million, and six nonprofits/educational institutions another $5.3 million – all while awarding class members the proverbial goose egg – two objectors filed a cert petition. The objectors are backed by the Competitive Enterprise Institute’s Center for Class Action Fairness. The case, which grew out of a challenge to Google’s transmission of a user’s search terms through a “referral header,” proved beneficial for the alma maters of class counsel, which received nearly half of the settlement fund. That proved too much for one of the judges on the Ninth Circuit, who commented in dissent on the “unseemly occurrence of cy pres funds being doled out to interested parties’ alma maters,” here Stanford, Harvard and Chicago-Kent College of Law.

The Center for Class Action Fairness argues the case “presents an ideal and timely opportunity for the Court to resolve a deep circuit split over the use of cy pres awards in class action settlements and provide much-needed guidance to the lower courts on a recurring issue of substantial importance.” The petition argues that, absent resolution of this issue by the Supreme Court, counsel will “flock[] to the Ninth Circuit” to achieve “collusive settlements.” Specifically, the Center argues, that – under the Ninth Circuit decision – only cy pres settlements will occur in consumer class actions because it will not be “feasible” under the Ninth Circuit’s standard to compensate all consumers in a large class action. The Center is unsparing in its advocacy, arguing that “[t]he availability of cy pres relief only accentuates the[] pathologies of the class action procedure that provide substantial benefits to defendants and class counsel, at the expense of class members.”

It is unclear whether this will be one of the few petitions acted upon by the Court during this term, and there is no shortage of issues which need nationwide judicial resolution. But when the litigants don’t receive a dime, have to release their claims, and the only persons who benefit are lawyers and their favorite law schools, something seems awry. Stay tuned.

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Recent Filings – December Digest

View Amanda Pickens Nitto’s Complete Bio at robinsonbradshaw.comNot every class action court filing in North and South Carolina becomes a full-length post on our blog. Here is a recap of December filings:

Hicks, et al. v. Houston Baptist University, No. 5:17-cv-00629 (E.D.N.C. December 20, 2017) (putative class action brought under the Telephone Consumer Protection Act against Houston Baptist University for alleged solicitation of consumers for college classes via telephone calls using an automated telephone dialing system)

Martinez, et al. v. Alpha Technologies Services, Inc., et al., No. 5:17-cv-00628 (E.D.N.C. December 20, 2017) (putative collective and class action brought under federal and state wage and hour laws by plaintiffs who were employed to build a solar farm in Hope Mills, N.C., alleging defendants misclassified them as independent contractors, did not pay overtime compensation, made unlawful wage deductions and violated other wage and hour laws)

TJF Services, Inc., et al. v. Transportation Media, Inc., d/b/a Bench Craft Company, No. 5:17-cv-00626 (E.D.N.C. December 19, 2017) (putative class action alleging a sports advertising agency violated the N.C. Unfair and Deceptive Trade Practices Act by accepting payments from small businesses for ads which were never placed in golf course guides and subsequently charging the businesses’ credit cards without authorization)

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