Yay, you've won your Fitbit lawsuit, folks. But, lawyers, about those filet mignon expenses...

US judge halts $33m class-action gravy train

Let's look at this again

The judge put pressure on the lawyers by noting that the number of investors entitled to share the payout had hit 34,000 and she had understood that there were only 10,000. That would impact the amount each investor received, she noted, and so suggested that the lawyers' 25 per cent cut might be too high as a result.

In response to the judge's critical prodding over expenses and fee claims, the main lawyer - Brian Murray of Glancy Prongay & Murray – argued that the expenses were legit and hadn't been padded. He also claimed that the 25 per cent payout was justified given the risks in taking on the case.

Just in case you imagine this is only an occasional problem, reflect on the fact that there is an entire organization that focuses on abuse of the class action system.

The Center for Class Action Fairness (CCAF) was set up in 2009 and represents those in whose name a lawsuit is brought but who are then subject to unfair procedures and settlements. It has won millions of dollars for consumers as well as won a number of legal precedents when it comes to such cases.

This is how it describes its own work: "Unfair settlements generally serve self-interested lawyers and third parties at the expense of absent class members, the group of people whose rights are traded away to settle a class action.

"Lawyers have an interest in their fees, defendants have an interest in cheaply disposing of a lawsuit, and the class’ interests can take a back seat in the process. CCAF seeks to solve these problems by representing such class members pro bono and presenting judges with the other side of the argument. When CCAF prevails, lawyers get less, class members get more, and the rule of law is strengthened."

Paging CCAF...

Basically lawyers despair the day that the CCAF pops up in its class action lawsuit because it means they will have to justify the massive awards they grant themselves and any cy pres recipients they put forward.

An example from last month: when healthcare company Anthem acknowledged that it had suffered a data breach, law firms immediately filed dozens of lawsuits on behalf of those impacted in order to get a piece of the pie.

The judge in the case boiled it down to just four firms – but those firms then brought in no less than another 49 other law firms, and those firms then brought in another 53 law firms. No less than 329 lawyers ended up on the case - and everyone was getting paid $300-400 an hour to do low-level legal work like document review. Tens of millions of dollars that should have been going to those actually impacted instead went to highly paid lawyers.

And we only know about it because of CCAF and its director Ted Frank.

Incidentally, Frank was also involved in another case in the headlines today: the ridiculous monkey selfie case.

He argued on behalf of CCAF that the latest effort by PETA to make hay out of the situation should be thrown out in order to "deter PETA and other groups from using the Copyright Act as an ideological weapon to generate publicity and impose legal costs on innocent copyright holders."

So far, Frank and the CCAF have yet to turn up in the Fitbit case (3:16-cv-00151 in Northern California). Which is probably why it stinks so badly. ®