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NALFA: The Case Against Serial Class Action Objectors

January 8, 2018 | Posted in : NALFA News

In theory, the goal of a class action objector is to obtain a greater monetary benefit to class members.  This can be done in one of two ways:  (1) increase the overall amount of the settlement; or (2) decrease the amount of attorney fees portion of the settlement.  But professional objectors almost never try to increase the size of the overall settlement and almost always try to decrease plaintiffs' attorney fees.  Why is that?

The current class action objector model is broken.  At NALFA, we’re advancing the following 10 reasons to oppose class action objectors:

  1. Professional Objectors Troll for Cases:  No one hires professional objectors.  They decide themselves what cases they want to appoint themselves to.  These class action trolls seek out these cases by trolling the internet for class action cases and class members.

  2. Professional Objectors Are Not Qualified Fee Experts:  Professional fee objectors are not judicially qualified fee experts.  They are not qualified attorney fee experts or experts on class action settlements.  Professional objectors are not qualified experts on the reasonableness of attorney fees or on class action settlements.  They have no expert witness or special master qualifications or credentials.

  3. Professional Objectors Are Bias:  Professional objectors are anti-class action.  They are critics of class action litigation and cy pres awards.  They hold a bias against the very nature of class actions.  With such a bias against class actions from the outset, class action settlement objectors cannot be viewed as independent or objective in their settlement analysis.  With such an axe to grind against class actions, professional objectors rarely work in good faith.

  4. Professional Objectors Lack Complex Mass Tort Experience:  Professional objectors lack experience in large, complex class action cases.  Professional objectors have not negotiated a large class action settlement for the plaintiffs’ or defense bar.  In short, their objections are not peer review driven.  Having someone object to a class action settlement, without sufficient settlement experience themselves, is like having a pre-med student criticizing a heart surgeon.

  5. Professional Objectors Do Low-Quality Work:  Dozens of courts have referred to the work of professional objectors as “meritless,” “frivolous” and “wasteful.”  Professional objectors file very general, low-grade, canned or boilerplate objections.  Indeed, broad statements about the impermissibility of excessive class counsel fees supported by citations to a few cases can be pasted into nearly any brief challenging a settlement.  Objector briefs are often cobbled together from stock parts.  They create their arguments out of whole cloth.  Indeed, professional objectors often resort to personal attacks against class counsel.  They cherry-pick their information and reason outside the mainstream of class action jurisprudence.

  6. Professional Objectors Interfere in the Settlement Process:  Professional objectors interfere with private parties negotiating a class action settlement in good faith. Their interference in the settlement process clog the courts and delay payments to class members.

  7. Professional Objectors Hide Behind Non-Profit Groups:  You know you’re a professional objector if you’ve established a non-profit group to provide you with a greater sense of creditability in class actions.  These groups provide objectors with a thin veil of legitimacy.  These non-profits groups help shield their private interests.  Examples of these groups include Center for Class Action Fairness, Class Action Fairness Group and Class Action Watch.

  8. Professional Objectors Demand A Payoff:  Professional objectors make money by holding up class action settlements.  Call it blackmail, extortion or a shakedown, professional objectors demand a payoff to withdraw their objections and appeals.  Professional objectors hijack the settlement process by strategically gaming the class action system not for the benefit of class members, but for their own financial gain.

  9. Professional Objectors Are Driven By Media Attention:  Aside from money, professional objectors are driven by media attention and/or a political cause.  Professional objectors are driven by their own personal interests, not the interests of class members.  With very little work, professional objectors get their name attached to large, successful class action cases.  These self-promotional objectors enjoy the media attention that these cases bring and take credit for settlements they had nothing to do with.  One would expect an objector who seeks to provide a greater monetary benefit to class members to have ties to consumer interest groups.  In fact, it’s just the opposite.  Professional objectors have ties and affiliations to the tort reform lobby and corporate interest groups.

  10. Professional Objectors Ignore Principles of Our Free Market Economy:  Professional objectors ignore basic principles of our free market economy.  Risk is the most fundamental principle of our free market economy and no professional takes on the contingency fee risk than a plaintiffs’ lawyer.  Professional objectors bemoan “self-dealing” plaintiffs’ lawyers who seek “exorbitant fees,” but need to be reminded that’s part of our free market economy.  There’s absolutely nothing wrong with lawyers making a lot of money in class actions.  That’s what our free market economy is all about.  There’s a trace of envy and spite in these types of objector arguments.

Well-known class actions objectors include Ted Frank of the Competitive Enterprise Institute, John Pentz of Class Action Fairness Group and Lawrence Schonbrun of Class Action Watch, Edward Siegel of Law Offices of Edward Siegel and Eduardo Cochran of Law Offices of Eduardo Cochran.