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An answer to that question can be found in today's Sarasota (Fla.) Herald Tribune, which has been investigating a proposed class action settlement over allegations that Lowe's sold tainted Chinese drywall. As is so often the case, the lawyers reached an agreement that gives buyers of the product gift cards, and themselves $2.1 million.

Brian Wolfman, a visiting professor at the Georgetown University Law Center, said too much of the Lowe's settlement money is going to the plaintiffs' attorneys.

Barrett, the lead attorney in the case, said the attorneys would get about 23 percent of the total $9.6 million settlement, which provides $6.5 million for the victims, $1 million for the cost of administering the settlement, and $2.1 million for the attorneys. He defended the agreement and said 23 percent is "on the lower end of fees paid in settlements."

But a close reading of the settlement shows that percentage could grow, because the agreement stipulates that if the plan doesn't draw enough claimants to pay out at least $2.5 million in cash and gift cards, Lowe's would keep the remaining $4 million that was set aside for the plaintiffs. If that happens, the lawyers would still be paid $2.1 million, which means they would receive almost as much as their clients.

Gift cards would be for $50, $250, or $2,000. People who could document larger purchases could receive a maximum of $2,500 extra in cash - in many cases, far less than the purchase price. In addition, the paper - in articles co-written with ProPublica, an investigative journalism group - notes that the lawyers apparently aren't trying too hard to reach people who may have purchased the drywall.

Lowe's customers who don't like those terms have until Nov. 9 to file a formal letter saying they've chosen to opt out of the agreement. If they don't meet that deadline, they'll automatically be included in the settlement and lose their right to sue Lowe's.

According to the agreement, the letters must be sent to a single mailing address to be considered valid for opting out. But the plaintiffs' attorneys have yet to establish such a mailing address, saying they won't be doing so until later this month. That's when they'll also begin notifying Lowe's customers of the settlement by placing information on the receipts of current Lowe's customers and by hiring a company to set up a website and place ads in publications like Parade Magazine. They will not, however, send notices directly by mail.

Ed Mierzwinski, consumer product director for the U.S. Public Interest Research Group, a nonprofit consumer advocacy organization, said the notification plan is inadequate because many Lowe's customers may not learn of the settlement and could lose their right to sue without even knowing it.

Lowe's has said it does not believe the drywall it sold was defective and that its vendors have assured it that they never supplied Lowe's with any of the Chinese drywall that is the focus of a much larger drywall case that's being heard in federal court in New Orleans. Some shipments of drywall were apparently made with high levels of sulphur, and can give off a foul odor and cause corrosion of copper pipes.

Meanwhile, trial lawyers who filed a much larger multi-district litigation in New Orleans have filed a motion seeking to block the settlement, claiming it provides only minimal compensation to drywall victims, overly generous fees to the attorneys who negotiated it, and is an attempt to circumvent the federal court's effort to deal with the issue globally.

Today's article can be read here. An earlier article can be read here.

Q: What's worse than a class action lawsuit settlement that provides millions of dollars for trial lawyers and a coupon for the alleged victims?

A: A settlement that provides millions of dollars for plaintiffs' attorneys and absolutely nothing for the alleged victims.

That's the situation in a settlement that Ted Frank's Center for Class Action Fairness has formally objected to. The case is In Re Yahoo, in which the Internet giant was accused of "click fraud" against advertisers, allowing ads to be displayed in spyware, domain name parking sites, pop-ups, pop-unders, and typosquatting sites.

In the settlement agreed to by both sides, Yahoo agreed to implement an ad placement option similar to that used by competitor Google - but only until Microsoft takes over Yahoo's search engine and ad sales program. After that, all bets are off.

As for the approximately 800,000 members of the class:

• The three representative plaintiffs get $10,000.
• Class members that have gone out of business can get $20, if they submit a claim form.
• The lawyers get $4.3 million.
• Everyone else gets nothing - no refunds, no discounts on future ads, nothing.

The Ted Frank brief is merciless in its condemnation:

"(T)here are two possibilities. The Putative Class Attorneys have brought either (1) a meritorious case that is being settled for an infinitesimal fraction of the case's real value in a 'sellout' of the attorneys' and class representatives' fiduciary duties to the class, or (2) a meritless lawsuit where the 'class device had been used to obtain leverage for one person's benefit....'

"In either instance, the Putative Class Attorneys' actions should be deterred, rather than rewarded: the court should not approve the settlement and should not award attorneys' fees when the vast majority of the class gets nothing."

The entire brief can be read here.

The Miller-McCune blog today has a great piece about shakedown class action suits in which the lawyers make millions from settlements and the supposed victims get coupons.

Class action suits are a particularly major problem in California because the state's one-way rule lets a plaintiff immediately appeal a judge's refusal to "certify" (i.e., legitimize) a class action lawsuit. But when the situation is reversed and a defendant wants to appeal a decision to certify a class action, California law in effect tells the defendant to suck it up and pay the plaintiffs' lawyers big money in order to get out of the case.

Here's the lead-in to the piece:

Class action lawsuits are becoming so prevalent that some legal experts worry the headlong rush to certify so many cases -- and the settlements that result -- may compromise fundamental principles of justice and place an unsustainable burden on an already creaky court system.

The most barbed criticisms are aimed at settlements that increasingly line legal pockets with millions of dollars in fees while plaintiffs make do with paltry sums or, more controversially, coupons for compensatory goods or services. In some cases, the awards would be so inconsequential to individuals that the money goes into a public trust that may never directly benefit the aggrieved plaintiffs.

You can read the entire article here.

We've posted a couple of items (here and here) about the small checks CJAC staffers have received from the massive Expedia settlement (you know, the one in which "victims" got a couple of bucks while the lawyers walked away with $10 million).

But the Lawyers and Settlements blog is here to help. They've got a contest going through the end of July in which the person with the smallest Expedia settlement check can win a 4-DVD set of what they call the best whistleblower movies of all time.

Right now the leader is a guy who got a check for 39 cents. If your check is lower, go to their Facebook page and post the amount and an image of the check.

You can read the blog post giving all the details here.

Forbes.com has a great post on one of the latest class action settlements in which lawyers get millions and the supposed victims get coupons.

Congress has tried to ban them. Some judges even do their jobs and send the lawyers back in search of more money for their clients. But then there are judges like St. Louis County Judge Angela T. Quigless, who last month approved a class-action settlement against A.G. Edwards that rewards lawyers at Milberg and other firms $21 million in cash while their clients get mostly coupons they can use over three years to obtain discounts on mutual funds.

The piece goes into detail about how little work went into the case, how few of the "plaintiffs" are likely to even cash in their coupons, and how hard the trial lawyers are fighting the efforts of the Center for Class Action Fairness to block the settlement. Which, as it turns out, is just about as hard as class-action lawyers fight efforts to publicize the actual rate at which their clients redeem the coupons they negotiate for them.

CJAC has written about other such examples recently, including cases involving Volkswagen and Expedia.

Oh, and a footnote to the posting on the Expedia settlement: We were surprised to open a letter the other day and find a $3.22 $3.77 check that represented our teeny-tiny portion of that settlement. We'd forgotten we'd ever bothered to fill out the claim form.