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Hecht v. United Collection Bureau (2d Circuit)

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In a typical class action settlement, the defendants will often pay as much as a million dollars in notice expenses. One way class action attorneys inflate their fee requests is by claiming these notice expenses are a benefit to the class, and should be counted when calculating "percentage of the benefit" attorneys' fees. This is, of course, utter nonsense. Notice is a benefit to the defendant; any defendant who skimps on the constitutionally-required notice will not get the benefit of the unnamed class members' waiver that the defendant is presumably seeking. And, indeed, that's exactly what happened in the Second Circuit case of Hecht v. United Collection Bureau, where a class action settlement was deemed not binding on a new class of FDCPA complainants who were dissatisfied with that settlement and wished to bring a new action. The case is also important for affirming that Rule 23(b)(2) class certification cannot bind a class on damages claims. More: Wolfman, who successfully argued the appeal; Frankel at Reuters.

If anyone is looking for a free chance at a multi-million-dollar consumer class action, Hecht provides a good cause in a suit against HP and NVIDIA over their misleading notice to the class of a rip-off settlement.

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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.