Class Action Settlement Objectors -...

Presenting a live 90‐minute webinar with interactive Q&A

Class Action Settlement ObjectorsMinimizing and Defending Challenges by Professional Objectors, Government Officials and Public Interest Groups

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDSAY, JANUARY 10, 2012

Today s faculty features:

Bruce D. Greenberg, Partner, Lite DePalma Greenberg, Newark, N.J.

Paul G. Karlsgodt, Partner, Baker Hostetler, Denver

The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Conference Materials

If you have not printed the conference materials for this program, please complete the following steps:

• Click on the + sign next to “Conference Materials” in the middle of the left-hand column on your screen hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program.

• Double click on the PDF and a separate page will open. Double click on the PDF and a separate page will open.

• Print the slides by clicking on the printer icon.

Continuing Education Credits FOR LIVE EVENT ONLY

For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps:

• Close the notification box

• In the chat box, type (1) your company name and (2) the number of attendees at your location

• Click the SEND button beside the box

Tips for Optimal Quality

S d Q litSound QualityIf you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection.

If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial 1-866-869-6667 and enter your PIN -when prompted Otherwise please send us a chat or e mail when prompted. Otherwise, please send us a chat or e-mail [email protected] immediately so we can address the problem.

If you dialed in and have any difficulties during the call, press *0 for assistance.

Viewing QualityTo maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key againpress the F11 key again.

CLASS ACTION SETTLEMENT OBJECTORS: Minimizing and Defending Challenges by Professional Objectors, g g g y j ,

Government Officials and Public Interest Groups

PLAINTIFFS’ TACTICS TO COMBATPLAINTIFFS TACTICS TO COMBAT PROFESSIONAL OBJECTORS

B D G b EBruce D. Greenberg, Esq.Lite DePalma Greenberg, LLCTwo Gateway Center, Suite 1201Newark, NJ 07102(973) [email protected] Jersey Appellate Law blog: www.appellatelaw-nj.com

5© 2012 Lite DePalma Greenberg, LLC All Rights Reserved

y pp g pp j

“QUICK PAY” FEE PROVISION“QUICK‐PAY” FEE PROVISION:

Provides for payment of fees/expenses shortly after finalProvides for payment of fees/expenses shortly after final settlement approval by the district court, and repayment if approval is overturned or materially altered

Removes a pressure point for objectors

See Brian T. Fitzpatrick, “The End of Objector Blackmail?,” 62 Vand. L. Rev. 1623 (2009)


SHIFT TO DEFENDANTS THE OBLIGATION TO DEAL WITH OBJECTORS:

Defendants have an equal interest in terminating objections

Again, removes a pressure point for objectors. Defendants are less susceptible to economic pressure from objectors.


STEAL OBJECTORS’ CLOTHESSTEAL OBJECTORS’ CLOTHES:

Encourage the judge to be “rigorous” and give the court g j g g gwhat it needs to do that, in contrast to often sloppy objectors

Approval of settlement class requires review “even more scrupulous than usual.” E.g., In re Insurance Brokerage Antitrust Litig 579 F 3d 241 258 (3d Cir 2009)Antitrust Litig., 579 F.3d 241, 258 (3d Cir. 2009).

Court as “fiduciary for absent class members.” E.g., Sullivan v DB Investments Inc F 3d 2011 WL 6367740v. DB Investments, Inc., ___ F.3d ___, ___, 2011 WL 6367740, *27 (3d Cir. Dec. 20, 2011).


EXPOSE THE TRACK RECORD OF OBJECTORS AND THEIR COUNSEL:

P f i l bj l f ff l b il lProfessional objector counsel often offer only boilerplate arguments already rejected repeatedly elsewhere

Network with other plaintiffs’ counsel to get ammunition. Get objector counsel’s prior filings.

Objectors themselves appear in multiple cases (“stable of objectors”). Call for disclosure of their objection history. Cf. j ) j y fPSLRA, 15 U.S.C. §78u‐4(a)(2)(A)(v). See DeHoyos v. Allstate Corp., 240 F.R.D. 269, 316 (W.D. Tex. 2007).


DEPOSE THE OBJECTORDEPOSE THE OBJECTOR:

Test the motives, adequacy, etc., of objector, by analogy to deposition of class representatives as a test of their adequacy. Fed. R. Civ. P. 23(a)(3).adequacy. Fed. R. Civ. P. 23(a)(3).

Unearth any family, etc., relationship between objector and counsel, by analogy to rules for class counsel/class representatives


REQUIRE OBJECTOR COUNSEL/CLIENTS TO Q /APPEAR AT THE FINAL HEARING:

Written objections are largely cost‐free and require no accountability

Requiring objector counsel and/or clients to appear puts “skin in the game”

Questioning by court can expose weaknesses and true agenda of objectors

A full and rigorous analysis requires oral argument by and colloquy with all counsel, including objector counsel


SEEK SANCTIONSSEEK SANCTIONS:

M bj fil l i i b il l d li iMany objectors file late, suspicious, boilerplate, duplicative and/or groundless objections

Monetary sanctions

i f h i d i iRevocation of pro hac vice admission

Reduction in otherwise available attorneys’ feeReduction in otherwise available attorneys fee


“SUE THE BAST@&DS!”“SUE THE BAST@&DS!”:

On proper facts, RICO or other theories may be available.

Weigh the likelihood of success or of specific or generalWeigh the likelihood of success, or of specific or general deterrence, against the time and expense of a separate new litigation that may be viewed unfavorably by some courts.

Cf. Chrysler Corp. v. Carey, 5 F. Supp. 2d 1023 (E.D. Mo. 1998) (class action defendant sued class counsel).1998) (class action defendant sued class counsel).


OPPOSE OBJECTOR DEMANDS FOR ATTORNEYS’ FEES:

The general rule is no fees for objector counsel E g In reThe general rule is no fees for objector counsel. E.g., In re Rent‐Way Sec. Litig., 305 F. Supp. 2d 491, 520 (W.D. Pa. 2003).

Creating minor or illusory “benefits” to the class should notCreating minor or illusory benefits to the class should not earn a fee. Only “substantial benefit” qualifies. E.g., Azizianv. Federated Dep’t Stores, Inc., 2007 WL 425850, *1 (N.D. Cal. Feb. 8, 2006).

“Sharpening the focus” should not earn a fee. Some SDNY cases award fees for that; others, and cases elsewhere, say no. E.g., Martin v. Foster‐Wheeler Energy Corp., 2008 WL 906742, *10 (M.D. Pa. Mar. 31, 2008).


, ( , )

DEMAND OBJECTOR COUNSEL’S DETAILED TIME AND EXPENSE RECORDS:

Class counsel must submit time records in lodestar cases

Obj t l i l t i f l iObjector counsel come in late— no issue of voluminous records to review

Requiring records reduces extortionate fee demands and exposes inflated/improper billing


OPPOSE PERCENTAGE AWARDS TO OBJECTOR COUNSEL; LIMIT TO LODESTAR:

Objectors often demand a percentage, up to 100%, of class counsel’s fee

Sometimes they seek a percentage of an overvalued benefitSometimes they seek a percentage of an overvalued benefit they claim to have created

Percentage fee demands create windfalls that fail the g“cross‐check” that many circuits employ. E.g., Sullivan, ___ F.3d at ___, 2011 WL 6367740, *38.

Courts rightly label objector percentage fee demandsCourts rightly label objector percentage fee demands “chutzpah” and “preposterous.” E.g., Mirfasihi v. Fleet Mortgage Corp., 551 F.3d 682 (7th Cir. 2008).


OPPOSE MULTIPLIER FOR OBJECTOR COUNSEL:

Multipliers reward risk. Unlike class counsel, objector l k li l i k B h f d d l i licounsel take little risk. But they often demand a multiplier

anyway, especially if class counsel are getting one.


OPPOSE INCENTIVE/SERVICE AWARD FOR /OBJECTOR OR COUNSEL:

Some objector counsel, to get around their inability to get a fee, appear pro se and demand an incentive award

E UFCW L l 880 J i t P i F d N t Mi iE.g., UFCW Local 880 Joint Pension Fund v. Newmont Mining Corp., 2008 WL 4452332 (D. Colo. Sept. 30, 2008) (denying incentive award).


REQUIRE AN APPEAL BONDREQUIRE AN APPEAL BOND:

Fed. R. App. 7 permits this, though some courts have declined to do itdeclined to do it.

Good faith objectors will not be chilled; opportunists will foldfold.

Increased administration expenses, interest on settlement fund projected attorneys’ fees in defending objectorfund, projected attorneys fees in defending objector appeals are potential bases for bond.

See John E Lopatka and D Brooks Smith “Class ActionSee John E. Lopatka and D. Brooks Smith, Class Action Professional Objectors: What to Do About Them,” __ Fla. St. U. L. Rev. __ (2012) (forthcoming)


AN ADVERTISEMENTAN ADVERTISEMENT:

For more on many of these topics, and others, see:

B D G b “K i th Fli O t f th Oi t tBruce D. Greenberg, “Keeping the Flies Out of the Ointment: Restricting Objectors to Class Action Settlements,” 84 St. John’s L. Rev. 949 (2010) (cited in In re Kentucky Grilled Chicken Coupon Marketing & Sales Practices Litig., ___ F.R.D. ___, 2011 WL 5599129 (N.D. Ill. Nov. 16, 2011))


BRUCE D. GREENBERG, ESQ.Lite DePalma Greenberg, LLCg,Two Gateway Center, Suite 1201Newark, NJ 07102(973) 877-3820(973) [email protected]

www.litedepalma.com

N J A ll t L blNew Jersey Appellate Law blog: www.appellatelaw-nj.com


When It’s Not Money Th ’ AftThey’re After

Paul Karlsgodtpkarlsgodt@bakerlaw com

© 2010 Baker & Hostetler LLP

[email protected]

A “Taxonomy” of Objectorsy j

Listed in order of concern:Listed in order of concern:• Whackos (non-class members who send

crazy letters to the judge or settlementcrazy letters to the judge or settlement administrator)I di id l l b• Individual class members

• Professional or “Greenmail” objectors• Public Interest objectors• Government objectors

23 Baker Hostetler

Government objectors

Public Interest Objectorsj

• How are they distinguishable from professional or y g p“greenmail” objectors?– Can’t buy them off– Have a policy agendaHave a policy agenda

• Policy interests can vary– Consumer advocates

P b i d t– Pro-business advocates– Class action opponents and tort reform advocates

• How they objecty j– They may represent objectors, often on a pro bono

basis.– They may also appear as amicus parties

24 Baker Hostetler

They may also appear as amicus parties.

Government Objectorsj

• Who are they?y– Individual regulators– Attorneys general– Groups of AGs

• What are they concerned with?• What are they concerned with?– Consumer protection– Regulatory control– Preserving government powers

• What types of settlements are they interested in?– Claims that are the subject of regulatory investigation or action– Coupon settlements or other settlements where consumers have no

opportunity for any meaningful benefitopportunity for any meaningful benefit– Cases involving acts or events that are subjects of public outcry– Cases brought to their attention by other AGs (especially California)– Releases that purport to curtail regulatory power

25 Baker Hostetler

Considerations Common to All Non Greenmail ObjectorsNon-Greenmail Objectors

• They are not interested in extractingThey are not interested in extracting money out of the settlement.

• They have limited resources so they look• They have limited resources, so they look for the most egregious cases.A f i ttl t ith d ti• A fair settlement with a good notice program is not likely to attract either

t fit bj tgovernment or nonprofit objectors.

26 Baker Hostetler

Strategies for Avoiding Non-Greenmail ObjectorsGreenmail Objectors

• Avoid appearance of collusionAll fi t di h i f ti– Allow some confirmatory discovery or exchange information.

– Make sure to keep a record of negotiations.– Consider hiring a mediator or using court-sponsored dispute

resol tion ser iceresolution service.• Avoid coupon settlements

– Wilson v. DirectBuy, Inc., Civ. A. No. 3:09-CV-590 (JCH), slip t 8 29 (D C M 16 2011) (d i fi l l top. at 8-29 (D. Conn. May 16, 2011) (denying final approval to

coupon settlement following objections by 39 Attorneys general and a consumer advocacy group, who argued that the relief provided essentially amounted to a coupon settlement).p y p )

– Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292 (S.D. Fla. 2007) (denying final approval of a coupon settlement due in part to objections raised in an amicus brief filed by 35 attorneys general)

27 Baker Hostetler

attorneys general).

Strategies for Avoiding Non-Greenmail Objectors (cont’d)Greenmail Objectors (cont d)

• Don’t overreach with the release.• Avoid unnecessary publicity.• Have a principled basis for dealing with unclaimed

funds Reversion Money is returned to thefunds. Reversion – Money is returned to the defendant.– Pro rata – Money is paid pro rata to class members

who did file claimswho did file claims.– Cy pres – Money is paid to charity.

• For a good discussion of each of the three possible f fmethods for distributing unclaimed funds, see Klier

v. Elf Atochem North America, Inc., 658 F.3d 468, 475 (5th Cir. 2011).

28 Baker Hostetler

Strategies for Avoiding Non-Greenmail Objectors (cont’d)Greenmail Objectors (cont d)

• Ensure reasonable notice.– Reasonable notice and an opportunity to participate,

not the level of participation itself, should be the focus on whether the settlement complies with due processon whether the settlement complies with due process.

– Comply with Rule 23(c)(2)(B).– Follow FJC plain notice guidelines. See www.fjc.gov.– Retain a qualified notice expert.– Make sure you give proper CAFA notice in federal

court 28 U S C § 1715court. 28 U.S.C. § 1715. • Be honest and forthright with the court during

preliminary approval.

29 Baker Hostetler

For further studyy• FJC Class Action Notices Page, http://www.fjc.gov/.

B D G b K i th Fli t f th Oi t t• Bruce D. Greenberg, Keeping the Flies out of the Ointment: Restricting Objectors to Class Action Settlements, 84 St. John’s L. Rev. 949 (2010).

• Paul Karlsgodt & Raj Chohan, Class Action Settlement Objectors: g j , jMinor Nuisance or Serious Threat to Approval? 12 Class 744, (BNA Class Action Lit. Rep., August 12, 2011), http://classactionblawg.files.wordpress.com/2011/09/bnaartic.pdf

• Shannon R Wheatman & Terri R LeClercq Majority of Class ActionShannon R. Wheatman & Terri R. LeClercq, Majority of Class Action Publication Notices Fail to Satisfy Rule 23 Requirements, 30 REV. LITIG. 53 (2011).

• Todd B. Hilsee, Shannon R. Wheatman & Gina M. Intrepido, Do you really want me to know my rights? The ethics behind due process inreally want me to know my rights? The ethics behind due process in class action notice is more than just plain language: A desire to actually inform. GEO J. LEGAL ETHICS, 18 (4), 1359-1382 (2005).

30 Baker Hostetler

Class Action Settlement Objectors -...

Documents

Transcript of Class Action Settlement Objectors -...