Alison Frankel

A new way for class actions to evade federal court? Not so fast, says judge

December 22, 2015

Plaintiffs’ lawyers trying to bring big-money class actions before friendly state-court judges is such an old story that Congress passed a law to prevent it. The Class Action Fairness Act of 2005 allows defendants to remove to federal court just about every class action in which more than $5 million is at issue. And when some entrepreneurial litigators in Arkansas and Texas devised a way to get back to state court by stipulating to class damages of less than $5 million, the U.S. Supreme Court put a quick stop to their gamesmanship, in the unanimous 2013 decision in Standard Fire v. Knowles.

Lawyers for car owners warn VW: Hiring Feinberg won’t get you out cheap

December 18, 2015

(Reuters) – Kenneth Feinberg, the most famous victims’ compensation expert in the United States, has many fans in the plaintiffs’ bar. He has earned their regard in designing and implementing settlement programs over the past 30 years, including funds for victims of the 9/11 attacks, the Boston Marathon bombing, and the General Motors ignition switch defect. This month, when U.S. District Judge Charles Breyer of San Francisco invited recommendations for a court-appointed settlement mediator in the gigantic consolidated clean diesel litigation against Volkswagen, Feinberg was suggested by at least a half-dozen plaintiffs’ firms that sang his praises.

How to squelch appraisal arbitrage, Minnesota style

December 17, 2015

(Reuters) – The beauty of a burgeoning litigation investment strategy known as appraisal arbitrage is that speculators can make money even if they lose in court. Appraisal actions, brought by shareholders who believe buyout prices are too low, ask courts to set a fair value for share prices. If the courts decide the fair value is more than the buyout price, the protesting shareholder is entitled to the higher price, plus interest.

California Supreme Court to decide how class action lawyers should be paid

December 16, 2015

David Brennan is one of about 4,000 current and former California employees of Robert Half International who reached a $19 million wage-and-hour class action settlement with the company in 2012. The state court judge overseeing the case awarded class counsel from the Law Offices of Kevin T. Barnes one-third of the class fund, or $6.3 million. Brennan, represented by class action ombudsman Lawrence Schonbrun, objected to the settlement, arguing that under 40-year-old California precedent, the fee award should have been based on plaintiffs’ lawyers’ hourly billings, not a percentage of the class recovery. When that argument failed to persuade the trial court and the intermediate appellate court, Brennan and Schonbrun took the case to the California Supreme Court, which agreed to hear his appeal.

Federal Reserve tries to repair damage from AIG bailout case in new brief

December 15, 2015

(Reuters) – The Federal Reserve Bank of New York is not a fan of U.S. Court of Federal Claims Judge Thomas Wheeler, who ruled in June that the Treasury Department’s $87 billion bailout of AIG violated the Fifth Amendment rights of AIG shareholders.

When class money doesn’t go to class members: new calls for SCOTUS review

December 14, 2015

(Reuters) – A couple of years ago, Chief Justice John Roberts appended an unusual statement to the U.S. Supreme Court’s decision not to review a privacy class action settlement in which all of the class recovery (except for legal fees) was delivered to a new online privacy education group Facebook was to help oversee. The chief justice said the Facebook settlement challenge was too tightly focused on the particulars of the case to warrant Supreme Court review but he basically invited future cert petitions raising the issue of when, if ever, class action settlements can deliver money to charities under the doctrine of cy pres, or “as near as possible.”

Texas’ untenable anti-refugee case

December 11, 2015

(Reuters) – U.S. District Judge David Godbey of Dallas didn’t do a lot of explaining in his order Wednesday denying the Texas Health and Human Services Commission a temporary restraining order to block the resettlement in Houston of nine Syrian refugees. The entire ruling is less than three pages long, and, as Reuters reported, concludes simply that Texas hasn’t met the requisite showing of irreparable harm.

Minority students can’t intervene in Harvard admissions case – 1st Circuit

December 10, 2015

The legal world was quite understandably transfixed Wednesday by U.S. Supreme Court arguments in Fisher v. University of Texas, the justices’ latest consideration of the role race may play in admissions decisions at public universities. In particular, Justice Antonin Scalia incited an Internet firestorm with a question about whether black and Hispanic students admitted under affirmative action policies might be better off at less competitive schools.

SEC’s revised view of antifraud law survives State Street appeal

December 9, 2015

Former State Street chief investment officer John Flannery was the unfortunate victim of the Securities and Exchange Commission’s decision to broaden the scope of liability under antifraud provisions of the Securities Act of 1933 and the Securities and Exchange Act of 1934.

Who is behind the ‘grassroots’ campaign against trial lawyer ads?

December 9, 2015

(Reuters) – Trial lawyers’ television ads are, as a genre, so over-the-top that you might think they’re parody proof. If you watch late-night TV you know what I’m talking about: “Toxic drug warning!” “Legal Alert!” “Attention: You may be entitled to compensation!” The ads aren’t artful, to say the least, but they are effective. If they weren’t, trial lawyers would not be spending nearly a billion dollars a year, according to a study the Institute for Legal Reform (ILR) released in October, to reach out to potential clients.