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Stetson v. West Publishing Corp.



Federal Rule of Civil Procedure 23(h) permits class action attorneys to request "fees and nontaxable costs." But nearly every fee application requests "fees and expenses." The "expenses" can often be a substantial percentage of the total award, even though there is no reason to treat airfare and meals (expenses) differently than office rent (overhead for fees)—money is money. Precedent frowns on attorneys asking for more than 25% for fees, but the attorneys just go ahead and ask for the 25% (or 33% or 35%) and then expenses of several percent on top of that.

Stetson v. West Publishing is just such a settlement. The notice says that the attorneys will ask for 25% "plus litigation expenses"—and don't even disclose to the class what those litigation expenses are. Moreover, the 25% is not calculated on the class benefit, but includes a 25% commission for notice and administration expenses.

That's before we get to the part of the settlement where the attorneys are asking for an extra $450,000 because they distributed coupons to the 170,000-member class. (The coupons, called "discount certificates," are for up to 10% off a Kaplan course, which means class members will likely have to sell the coupons at an even lower discount since they're unlikely to use them. At least these coupons are transferable.)

The Center for Class Action Fairness (not affiliated with the Manhattan Institute) will be objecting.

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Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.