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Practice Tip: Class Actions. Where's the Beef?

By Ronald J. Levine and Sharon A. O’Shaughnessy
June 10, 2013

Product liability practitioners will recall that in 2005 the Class Action Fairness Act (CAFA) was enacted in response to a Congressional finding that class action settlements may too often result in a monetary windfall to class counsel, while leaving class members with awards of little or no value. Despite the fact that product liability class action settlements are subject to judicial scrutiny to ensure substantive and procedural fairness, there is surprisingly little data available regarding how much cash relief class members actually receive post-settlement. The scant literature that is available on post-settlement distributions reveals that many class actions are still being settled on terms that often benefit the lawyers involved, while not delivering meaningful compensation to the class members.

In 2012, the U.S. House of Representatives' Subcommittee on the Constitution investigated the post-CAFA world and demonstrated that, although CAFA has been a success in certain respects, the legislation has not cured some of the continuing failings in the class action system. Specifically, the testimony in Washington confirmed what any product liability lawyer who handles class actions already knew ' the law has not put an end to the recurring problem that counsel are too often the only winners in the class action system.

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