In a Bloomberg Law article, Professor Howard Erichson weighed in on a lower court ruling that puts restrictions on the settlement negotiations in a class-action suit against Logitech Inc.
The Ninth Circuit expressed concern recently about a lower court judge’s standing rule barring precertification settlement negotiations in class actions. But it decided the concerns didn’t warrant the drastic remedy of mandamus.
That means consumers will push ahead with litigation alleging Logitech Inc.’s Z200 computer speaker system is less powerful than advertised. The deadline for their class certification motion is now Sept. 26.
But if mandamus wasn’t the proper way for them to challenge U.S. District Court for the Northern District of California Judge William Alsup’s general prohibition on early settlement negotiations, what is?
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Logitech challenged the standing order on the basis it unduly delays litigation and infringes on parties’ free speech rights.Alsup told the Ninth Circuit the order is rooted in concern for absent class members.
Class action watchers say that there may be something to Alsup’s worries.
“I think the message Judge Alsup wanted to convey is that he would be very skeptical about the fairness of any settlement negotiated by a lawyer who had not yet obtained class certification,” Howard M. Erichson, who studies the ethics of complex litigation at Fordham University School of Law in New York, said.
“That’s a message every judge should convey to putative class counsel and to defendants seeking to negotiate class settlements,” he said.
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Erichson said judges don’t have to go as far as imposing an outright ban on negotiations.But they should make it clear that the burden on the parties to prove the fairness of a proposed settlement will be much higher if the plaintiffs’ lawyer isn’t yet class counsel, he said.
