Representation Without Representation
Lawyers in class action suits too often represent their clients as a sort of grudging afterthought to representing their own monetary interests. Daniel Fisher blogs at Forbes of my friend Ted Frank's appeal of a judge's award of $21 million in fees to lawyers and $6 million to those they were supposed to be representing:
For a thorough description of how a compliant judge can allow class-action lawyers to turn practically worthless coupons into a fountain of fees, read Ted Frank's appeal of a St. Louis judge's award in the A.G. Edwards case. St. Louis Judge Angela T. Quigless approved a settlement that gives lawyers at Milberg and other firms $21 million in cash but only $6 million for some customers and three annual coupons of $8.22 apiece for the rest. The judge didn't even see fit to inquire into the lawyers' valuation of the coupon portion of the settlement, despite strong evidence that less than 10% of coupons in such cases are ever redeemed. (A simple question to the lawyers might have sufficed: "If they're so valuable," Judge Quigless might have asked, "why don't you accept them at the same 100 cents on the dollar you have told the court they are worth?")The judge did show some backbone when Frank asked her to order an inquiry into how many coupons were redeemed in a nearly identical settlement Milberg negotiated with Edward D. Jones in 2006. She rejected the request.
What's worse is the hoops you have to jump through to opt out of this nonsense. I got some paperwork one time where I merely needed to send some forms to three different places to not be part of the class.
My reward was probably a coupon for money off the product they were suing over in the first place.
I think all these suits should be opt-in. Lawyers should be prohibited, by law from being reimbursed in any form differing from the class (how do those coupons look now, shyster?) Last, I think legal fees should be capped at 25 percent.
MarkD at January 11, 2011 10:48 AM
I'd surmise that not a few judges poke their fingers in that pie.
Graty Slapchop at January 11, 2011 12:27 PM
Graty, I know of no proof of that... not saying you're wrong, though. I've noted in my years that most lawyers have a "my tribe, right or wrong" attitude towards their colleagues, and I suspect judges have that too since the bulk of them are themselves lawyers. And there's a revolving door between judgeships and law firms, so judges won't upset the applecart because they know that doing so will limit their chances of cashing in after they retire.
Cousin Dave at January 11, 2011 3:32 PM
Limiting the scope of class action and changing the rules to opt in rather than opt out should be on the agenda in the next congress, Based on the medical trolling I see on TV for plaintiffs against a whole host of pharmaceuticals, getting rid of most class action could be a ticket to lowering the cost of medical treatment by several percentage points.
Isabel1130Isa at January 11, 2011 5:08 PM
I look at 97% of class action suits to be total f-ing hokum.
I was a class member in the lawsuit against Progressive Insurance for using credit reports as part of Progressive's rating how much they charged for premiums. The class members got a free credit report. By that time you had the free annual credit reports anyway. The lawyers made millions.
Then there was the Briggs & Stratton lawsuit. Granted the consumers got more than the lawyers -- I didn't take it. I would have been eligible for $75 -- $35,450,000 Attorney Fees and Expenses (ESTIMATE) + $1,000 for Each Lead Plaintiff - Settlement Administrator and Notification Costs. I paid $900 for the riding mower in the first place, and used it until it died.
If they changed the system -- a class action needs to be brought in federal courts and the limit is 5% of the award for the whole class -- or $1 or $2 million -- whichever is less -- you would see a distinct change in class action lawsuits.
Jim P. at January 12, 2011 8:44 PM
Solution: The compensation received by the Attorney(or Firm) may not exceed the compensation received by any single member of the class.
nuzltr2 at January 13, 2011 10:47 AM
Amy Alkon
http://www.advicegoddess.com/archives/2011/01/11/representation.html#comment-1821134">comment from nuzltr2That's not realistic. It's enormously expensive and time-consuming to bring a class-action suit. Attorneys have gone to law school, invested a great deal of time and energy in becoming skilled at what they do, and deserve compensation for that -- even handsome compensation. But, this (above) is abuse, not representation.
Amy Alkon at January 13, 2011 11:24 AM
Attorneys have gone to law school, invested a great deal of time and energy in becoming skilled at what they do, and deserve compensation for that -- even handsome compensation.
You are working off the assumption that the number of lawyers to the percentage of population is justified.
I'm not advocating the:
But if you can't make money in your profession -- you need to find a new profession. Why are lawyers, doctors, or any other profession different.
This is the same thing as a a guy that was in Dayton building a Blazer. He was laid off. He has a choice -- move to Tennessee to work at the Saturn Plant; live on unemployment; or find a new job.
Your assumption is that someone deserves employment and certain income level -- regardless of life choices -- is a socialist take.
You oft repeat the story of your Dr. friend getting $30 an hour for a kidney replacement. The next question to ask is why would he accept such crappy compensation for 12 years of schooling?
I volunteer on a tech website -- I generally get t-shirts, and some other swag for doing it. But the questions -- and answers keep me fresh. But if I'm going to look at your desktop and -- I'm generally getting paid for it.
No one is required or deserves to be employed a $X amount per hour. I'm employed at a nice chunk currently. But I negotiated what I'm compensated to a point. This is the same argument about why women are paid less.
Saying a lawyer needs to be paid a ridiculous amount because he went to school is the same as saying I don't deserve my salary because I don't have a college degree.
Check the dichotomy at the door.
Jim P. at January 14, 2011 9:10 PM
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