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Blessing v. Sirius XM Second Circuit argument tomorrow morning

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Class action attorneys collected $13 million in a settlement they claimed was worth $180 million. The settlement didn't actually pay any money to the class; it just required Sirius XM to offer its service for $12.95/month until December 31, 2011, and pretended that class members would have paid $14.95/month if not for the settlement. Except Sirius XM customers don't pay $14.95 a month even after December 31, 2011; for example, I just subscribed to Sirius XM for less than $4.17 a month—a rate cheaper than what was available in 2011. If you offer a coupon for a Big Mac for $12.95, how much should you value the coupon when class members can get the Big Mac for a lot cheaper without a coupon? The Center for Class Action Fairness argues that the Class Action Fairness Act requires the settlement to be valued at $0, which would make a $13 million settlement where the attorneys get 100% of the benefit per se unfair, especially given the Bluetooth signs of self-dealing. To boot, the district court's procedures and rulings violated Rules 23(g) and 23(h); CIR and PLF filed amicus briefs on the racial quota arguments of the district court. Defendant Sirius XM, represented by Jones Day, perhaps realizes that the settlement is indefensible on the merits, so thinks outside the box and asks the Court to hold the case "equitably moot," which makes no sense outside of the bankruptcy context, or perhaps even in the bankruptcy context, as our reply brief explains.

The Wall Street Journal covered the case earlier, as did Reuters.

(The Center for Class Action Fairness is not affiliated with the Manhattan Institute.)

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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.