You know what stinks about class-action settlements? Sometimes, the payout for the consumer is absolutely meaningless. This Hewlett-Packard settlement is a perfect example. Consumers sued because HP supposedly misled them about their cartridges’ true ink levels (causing premature replacement), hid expiration dates, and engaged in a few other practices that made their wallets sad from 2001 to 2010.

What was the objection? As always, it was excessive attorneys’ fees.

Why the ambiguity? Lodestar fees.

For percentage fees, the provision makes sense. Lawyers shouldn’t get 70 percent of the tab, while consumers all get shiny coupons for a few bucks off of a new cartridge. But Lodestar fees are a little different. These hourly rates, plus costs, are allegedly based on the time attorneys actually spent on the case (and lawyers never inflate bills).

Then again, despite their hard work, “Plaintiffs attorneys don’t get paid simply for working; they get paid for obtaining results.”

Like we said … useless.

The Ninth ordered the case remanded for reconsideration of the settlement, as the lower court should have taken a closer look at the value of the coupons, including the expected redemption rate, in deciding on the fairness of the Lodestar award.

Dissenting Judge Marsha Berzon, meanwhile, argued that the CAFA doesn’t impose such a rigid redeemed-coupon value rule, especially when the Lodestar method is employed. The lower court already took the benefit to the class in mind when lowering the fees from the proposed $2.9 million (hourly rates and fees combined) to $1.5 million.

Related Resources:

  • In re: HP Inkjet Printer Litigation (Ninth Circuit Court of Appeals)
  • Court voids HP printer settlement, cites legal fees (Reuters)
  • Cy Pres Facebook Settlement: 6 Judges Cy Pissed (FindLaw’s Ninth Circuit Blog)

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Civil Rights

Block on Trump’s Asylum Ban Upheld by Supreme Court

Criminal

Judges Can Release Secret Grand Jury Records

Politicians Can’t Block Voters on Facebook, Court Rules