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CCAF Ninth Circuit brief: In re HP Inkjet Printer Litigation

In the HP Inkjet Printer litigation, the plaintiffs negotiated $1.5 million in coupons and perfunctory injunctive relief. The attorneys asked for $2.9 million, as the settlement agreement allowed, and received $2.1 million, with the remainder reverting to the defendant. The Center for Class Action Fairness objects all around to this on appeal. Is it appropriate to negotiate a settlement that benefits the attorneys more than the class, while attempting to shield the fees with a clear-sailing clause? Can settling parties bait-and-switch class members with class notice that tricks them into misfiling their objections and then hiding those objections from the judge? How should a court evaluate prospective injunctive relief that benefits only future customers and has no provision forbidding the defendant from raising prices to offset the cost of the changed business practices?

This coupon settlement was particularly pernicious, because of the restrictions on the low-dollar coupons, which were only usable at HP.com. Any class member using a coupon would not only increase HP's profits (because they'd be selling goods with the retail markup instead of at wholesale), but cost themselves money (because HP's list prices are substantially higher than other Internet vendors, or even brick-and-mortar vendors).

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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.