Law Humor

Class-Action Attorney Paid Just Like Class Members -- In Gift Cards

By Kevin Underhill

The "coupon settlement" is a controversial practice by which a class action is settled in such a way that the class attorney gets his or her fee while the actual class members get only a coupon or gift card.  This generally means that a class member must then do more business with the alleged wrongdoer, from which the wrongdoer will profit, while the class attorney is paid in cash.  The recent Class Action Fairness Act takes a dim view of those settlements, and some judges will simply not approve them.  Recently a judge in California found another way to express his disapproval.

Neil Fineman sued Windsor Fashions, a women's clothing store, on behalf of a group of consumers who  bought from Windsor with a credit card and from whom Windsor got an address, phone number or email address.  There was no allegation that anyone was actually harmed by this practice through something like identity theft, but it is a technical violation of a California statute.

For remedying that practice, Fineman was to be paid $125,000, while the customers involved would get -- at most -- a $10 gift card, which they would have to spend at Windsor Fashions.  An L.A. Superior Court judge approved the settlement, but ruled that if gift cards were good enough for the class members, they should be good enough for Mr. Fineman, too.  So Neil Fineman is to be the proud owner of 12,500 ten-dollar gift cards he can use to buy women's clothing.  (Probably he will be spending a lot of time on eBay instead.)

Fineman was to get the first 3,500 of the cards this week, and 750 per month from now until January 2010, so it will be a gift that keeps on giving.

Link: Metropolitan News-Enterprise (Los Angeles), Jan. 21, 2009.
Link: Legal Pad

Full post as published by Lowering the Bar on February 05, 2009 (boomark / email).