Class Objectors Must be ID'd, Lawyer Says

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By Lisa Helem

Sept. 11 — Lawyers working to get class settlements approved should investigate the types of objectors they face, a defense lawyer says, because gone are the days when all counsel had to worry about were the usual “whackos.”

“We're having to deal with all kinds of objectors these days, it's just not the standard,” Casie D. Collignon, a partner with BakerHostetler LLP said Sept. 9 in a webinar hosted by her firm.

“Now, I think, from a defense perspective, we have to really investigate who the objectors are,” Collignon said. “We need to make sure that we're doing our research in deciding who is our objector so we know how to defend against it.”

Class objectors are those who file formal objections in court challenging the fairness of a class settlement.

But objectors, Collignon said, fall into several categories—“the standard whackos that we've had to deal with since the beginning of time that don't usually threaten our class action settlements;” individual class members; the professional “greenmail” objectors who, she said, seek money; public interest objectors; and, “now we have Ted Frank, which combines all four of the first bullet points into one.”

Frank, founder of the Center for Class Action Fairness in Washington, regularly objects to high-profile, big money class deals, often taking aim at high class counsel fees and other settlements provisions he deems inequitable.

Ted Frank Makes His Case

As someone who objects to class deals that counsel spend a lot of time hammering out, Ted Frank is probably used to his share of feedback from class action attorneys.

But, in response to Collignon's comments, Frank said that he's also gotten his fair share of praise, and, even more significantly, victories.

“Not sure how I get classified as ‘whacko' after fifteen appellate victories and dozens of district court victories that have won class members and shareholders tens of millions of dollars. Maybe it's because I've refused offers of hundreds of thousands of dollars of greenmail money against my economic interest?” he wrote in a Sept. 10 e-mail to Bloomberg BNA.

Frank added that, “the Center for Class Action Fairness is a 501(c)(3) non-profit public-interest law firm” that “has never taken a dollar of greenmail, and never will,” and that kudos for his work have come from the likes of Seventh Circuit Judge Richard A. Posner, a jurist who Collignon mentioned in her webinar.

Frank also said Collignon's remarks might have been made partly in jest.

He said with a chuckle that he himself is “well-known for being a humorless scold who never says anything tongue-in-cheek.”

Plaintiffs' lawyers have also noted the rise of professional objectors with Brian Kabateck, founding and managing partner with Los Angeles-based Kabateck Brown Kellner LLP, saying recently that he's noticed a trend of “for profit” objectors over in the last 15 years.

‘Opt-Out Litigation is Back.'

Along with that rise, “opt-out litigation is back,” Collignon added. “Not only are we seeing trends in class action objectors, we're now looking at having those objectors leading organized opt-out litigation.”

The resurgence, she said, follows a ten-year period where organized opt-out litigation died off. The fact that it's back is driven by “creative and enterprising” plaintiffs' lawyers, she said.

She said that lawyers thinking about how to defend against class action objectors “really have to make sure you're targeting your administrator to tag you when they're seeing organized objectors and organized opt-outs in your administration, so that you can be flagged if you have an opt-out litigation or a mass action coming.”

Shifting the Dialogue

Judge Richard A. Posner of the U.S. Court of Appeals for the Seventh Circuit is taking objections seriously and is even lodging them himself, Collignon said.

Posner, she said, has been “concerned about comparing the attorneys' fee awards to the actual value to the class and not the maximum potential value to the class” in several recent cases, including, very notably, in Eubank v. Pella Corp., 735 F.3rd 718 (7th Cir. 2014).

Collignon said its important for class action defense lawyers to “start pushing the dialogue in mediations away from talking about a fee amount and a fund amount to talking about a claims rate amount and the actual amount a class is going to get, and maybe leaving attorneys' fees to a later date.”

Other topics covered in the webinar included standing, mootness and offers of judgment.

To contact the reporter on this story: Lisa Helem in Washington at lhelem@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com