Wednesday, September 7, 2011

Lawyer's fees in mass tort action questioned
(click link)

"x x x.


HAWKINS, Senior Circuit Judge:

The settlement agreement approved in this products liability class action provides the class $100,000 in cy pres awards IN RE BLUETOOTH HEADSET PRODUCTS LIABILITY 11099and zero dollars for economic injury, while setting aside up to $800,000 for class counsel and $12,000 for the class representatives—amounts which the court subsequently awarded in full in a separate order. William Brennan and other class members (collectively “Objectors”) challenge the fairness and reasonableness of the settlement and appeal both the approval and fee orders, arguing the district court abused its discretion in failing to consider whether the gross disproportion between the class award and the negotiated fee award was reasonable. We agree that the disparity between the value of the class recovery and class counsel’s compensation raises at least an inference of unfairness, and that the current record does not adequately dispel the possibility that class counsel bargained away a benefit to the class in exchange for their own interests. We therefore vacate both orders and remand so that the district court may conduct a more searching inquiry into the fairness of the negotiated distribution of funds, as well as consider the substantive reasonableness of the attorneys’ fee request in light of the degree of success attained.

x x x."