A federal judge approved a settlement involving Motorola's Bluetooth headsets but raised questions about a request for $800,000 in attorney's fees -- even though the plaintiffs will receive no economic recoveries.
The preliminary settlement approved by U.S. District Judge Dale S. Fischer requires Motorola Inc., Plantronics Inc., and GN Netcom Inc. to pay $100,000 to four institutions related to hearing loss (this is called a cy pres award -- a charitable contribution that comes from unclaimed funds in class action settlements). An additional $12,000 would go to the representative plaintiffs.
Ted Frank, a resident fellow specializing in liability reform at the American Enterprise Institute's Legal Center for the Public Interest, filed court documents objecting to the settlement on behalf of seven potential class members.
"Cy pres is one way that bad settlements are negotiated through courts," Frank said, according to the National Law Journal. "Where parties used to use coupons to exaggerate the value of the settlement, now they're using charitable donations."
Frank said that if the attorney's fees are reduced, so that they aren't receiving the majority of the recovery, "it's a completely different settlement than when the attorney fees are getting eight times the cy pres and the class is getting zero."
According to court documents, the plaintiffs' attorneys are seeking $800,000 in fees plus $50,000 in reimbursed litigation expenses.