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November 7, 2013

Lawyers Can’t Take $1 Million in Fees When Clients Get Nothing

A federal judge has refused to approve a class action settlement that would have given the lawyers nearly $1 million in fees while requiring class members to waive any right to class-wide damages. The judge originally approved the deal, but changed his mind after hearing objections from Ted Frank’s Center for Class Action Fairness.

The American Lawyer reports:

In a 33-page decision issued Wednesday, U.S. District Judge John Bates in Washington, D.C., refused to grant final approval to a settlement in a class action brought on behalf of purchasers of several L’Oreal hair products. Bates wrote that the settlement “creates the impression of unfairness” because it “provides no monetary relief while rewarding counsel handsomely.” The judge also agreed with CCAF that the lead plaintiffs shouldn’t be allowed to bind absent class members without providing notice or an opportunity to opt-out.

The lawsuit was filed on April 15, 2013 and settled on June 27, 2013, meaning the lawyers wanted a million dollars for a two-and-a-half month case that delivered nothing of real value for their clients.

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