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En banc denied in Inkjet, but attorneys still evading CAFA

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You may recall that the Center for Class Action Fairness won a big victory in May shutting down a tendentious interpretation of the Class Action Fairness Act that evaded the statute's intent in limiting coupon settlements to those that actually produced usable coupons. (As always, CCAF is not affiliated with the Manhattan Institute.)

The panel decision was 2-1, and that encouraged en banc petitions. We opposed the en banc petition, and Ninth Circuit denied the motion Monday, with only one judge (the dissent, Judge Berzon) requesting en banc rehearing.

We're encouraged, and the victory will likely help us in two or three other pending Ninth Circuit appeals we have, as well as a case in the Northern District of Illinois.

But the victory does little good if district courts and settling parties continue to ignore the plain language of CAFA. Take, for instance, the settlement in Redman v. Radio Shack Corp., No. 11-cv-06741 (N.D. Ill.). The settlement provides $1M in attorneys' fees and $10 coupons to the class, without any mechanism to track redemptions. Of course, there will be nowhere near the hundreds of thousands of claims comprising "settlement value," so the settlement also provide cy pres of leftover coupons. Except Section 1712(e) of the Class Action Fairness Act explicitly prohibits the use of cy pres coupons for calculating fee awards.

The settlement class is defined as

"All persons who, between August 24, 2010 and November 21, 2011, paid by credit or debit card for products or services and received an electronically-printed receipt from any Store that contained the expiration date of the person's credit or debit card.

"Excluded from the Settlement Class are Defendant, its officers, employees, and attorneys; transactions conducted with business credit or debit cards; and transactions made with RadioShack-branded debit or credit cards, as those cards do not contain expiration dates."

One hopes a class member aggrieved by this lawyers-first settlement will contact a non-profit attorney willing to help them object to such an unfair 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.