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Update: Apple iPhone 4 bumper class action settlement

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In March, I discussed the Apple iPhone 4 settlement, where the attorneys negotiated a self-dealing attorney-friendly settlement that gave them clear sailing for $5.9 million and said "I will be surprised if there are 40,000 claims."

Color me mildly surprised: there were 44,000 claims, worth about $650,000 to the class. Judge Whyte of the Northern District of California cut the fee request to the inflated lodestar of $2.2 million without a multiplier, so the attorneys are only collecting a bit less than four times as much as their clients instead of nine to ten times as much. Apple, which was willing to give an extra $3.7 million to settle the case, gets to keep the money: the attorney greed and breach of fiduciary duty to their clients means that that money is left on the table instead of going to the class. This should have led to class decertification, but the attorneys will walk away with millions, which is why they're not too critical in the press of the multi-million-dollar haircut.

Defense counsel facing the Rothken Law Firm in Novato, Gardy & Notis in New Jersey, Robbins Geller Rudman & Dowd in Florida, or Kirtland & Packard in El Segundo in future cases, however, should absolutely raise this breach of fiduciary duty to the class in opposing any Rule 23(g) motion: these firms have demonstrated that they will abuse the attorney-client relationship and happily deny their own clients millions for a chance at a windfall.

But the California Bar is too busy protecting clients from a voluntary relationship with Stephen Glass to look into cases where attorneys who have already passed the bar are self-dealing and stealing millions from involuntary clients.

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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.