Blog: Today in Legal Reform
The National Law Journal reports that a federal appeals court has tossed a proposed class actions settlement, saying that a trial judge failed to test whether the attorney fees in the case were excessive. The settlement would have awarded $800,000 to the plaintiffs' lawyers, $12,000 to nine class members, and nothing for the rest of the class.
A new report from the RAND Institute for Civil Justice found that, contrary to expectations, a rise in payments from the asbestos bankruptcy trusts has not led to reductions or offsets in settlement payouts from solvent companies and their insurers, reports Corporate Counsel. The trusts, established to dole out payments from defendants that have declared bankruptcy, have paid out nearly $11 billion in asbestos claims.
The California Attorney General has sued four plaintiffs' lawyers and 14 others for allegedly scamming struggling homeowners. The lawyers charged upfront fees to join mass-action suits against banks in exchange for promises that homeowners would get a portion of future settlements. "They suggested that by joining this lawsuit, the banks would have to pay," the attorney general said of the alleged scam. "But the only people who paid were those homeowners who were victimized for the second time," the Associated Press reports.
Judges in Delaware have begun to be more discerning when awarding fees to plaintiffs' lawyers who file lawsuits challenging mergers and acquisitions, handing out lower fees when they feel cases are settled with little or no benefit for individual shareholders, says the Wall Street Journal. This comes on the heels of a FOX Business report that found "law firms' sudden interest in ensuring shareholders are fairly compensated appears to be sparked by the realization that these M&A cases are easy money, often translating to hundreds of thousands of dollars in fees for very little work."
President Obama has appointed former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau. Daniel Fisher at Forbes says the nominee "was wildly popular with one well-heeled segment of the financial industry: securities class-action lawyers." Fisher further investigates campaign donations Cordray received from securities lawyers that he hired to sue on behalf of the state.
The Supreme Court ruled that a lawsuit against Wal-Mart cannot proceed as a class action, saying that a potential class of 1.6 million women did not share enough in common to move forward as a single case. The ruling was called "a major victory for legal fairness and economic growth" by the Wall Street Journal and "largely sensible" by the Washington Post.
A lawyer facing disbarrement proceedings has been dropped by the AG of Ohio from representing the state in a major securities case. The lawyer has been reprimanded for participating in a scheme that cheated his clients out of millions of dollars in settlement funds, reports the Cincinnati Enquirer.
ILR President Lisa Rickard has an op-ed in the Chicago Tribune about the rise in “no causation” conspiracy claims in McLean County, IL that can hold businesses liable even if they have no connection to a plaintiff. Rickard says the courts "are serving as a home for outrageous, abusive lawsuits that hurt businesses trying to create jobs in this difficult economy."