Activists complaining about credit card debt often singled out the shift in the credit card industry from 5% minimum payments to minimum payments of 2% a month. (See, e.g., this Frontline documentary.) The smaller minimum payments give customers more financial flexibility, but some small percentage of irresponsible spenders will find that they are in long-term debt to the credit card company because they're barely paying off any principal. So, in response to such complaints, and to reduce the risk it was facing during the credit crunch, JP Morgan (who issues Chase credit cards these days) raised the minimum monthly payment back to 5%.
This resulted in a class action. You see, lawyers said, it was unfair to credit-card customers who were planning on paying only 2% a month, and now faced higher fees and interest rates because they couldn't meet the higher minimum payment. After the district court certified a class, the case settled for $100 million, with the class attorneys—including the usual suspects of Lieff Cabraser and Milberg—seeking an oversized $27 million fee plus "expenses" that have not yet been disclosed; a preliminary approval hearing is scheduled for August 3. Press coverage doesn't mention that the class will end up with likely less than $70 million; existing court filings do not indicate the lodestar crosscheck or the approximate hourly rate the attorneys will receive for an MDL with only 337 docket entries and 14 depositions of defendants. Administration expenses will be artificially inflated because class members will be getting checks, when the ones with current Chase accounts could easily get an electronic credit.
The proposed cy pres recipient is "Consumer Action," which already receives funding from JP Morgan. One of the plaintiffs' firms is The Sturdevant Firm, based in San Francisco; the president of Consumer Action, with offices in San Francisco, is Patricia Sturdevant, but that could be a coincidence. Or perhaps not.