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Missouri appeals court upholds Bachman v. AG Edwards settlement

Daniel Fisher at Forbes beats me to it, but the intermediate appellate court signed off on a settlement that awarded $21 million to the attorneys (including Milberg Weiss) but only $5 million in cash and $34 million in face-value of coupons to the class. The court ruled that the settlement approval was not an abuse of discretion, because a 35% fee was within the court's discretion.

Wait a second, readers who have paid attention to this case might ask: the Center for Class Action Fairness argued that the trial court committed an error of law: Missouri class action law follows federal class action law, federal law holds that you cannot value coupons at face value, and it's only by valuing the coupons at face value that you get to 35%—otherwise, the fee is more like 70 or 80 percent of the total value of the settlement, which is plainly unfair and unreasonable. Remarkably, the court mentioned that we made that argument, but didn't address it.

The good news is that the appellate court denied a motion to dismiss the appeal and held that Missouri courts would follow the federal precedent of Devlin v. Scardelletti. Objectors in Missouri now have the right to appeal approvals of class action settlements there; before, an objector would have to move to intervene before having the right to appeal, raising the cost of objecting to a settlement, and giving the trial-court judge a means to prevent appeals of bad rulings.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.