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PJC Challenges Excessive Attorney Fees in Consumer Class Action

On June 20, 2005, PJC and Professors Michael Ambrosio, Robert Dinerstein, James McCall, Michael Meltsner, Vanessa Merton, and Ellen Yaroshefsky, experts from across the nation on legal ethics and professional responsibility, filed an amici curiae brief with the Court of Appeals of Maryland in Boyd v. Bell-Atlantic Maryland, Inc.  This class action litigation involves tens of millions of dollars in illegal late fees charged by Bell Atlantic Maryland over a period of years.  Objecting class members are challenging the adequacy of a settlement approved by the Circuit Court for Prince George’s County in which class counsel will receive nearly fifty percent of the total payout in attorneys fees.  This second settlement was reached only after the Circuit Court rejected an initial settlement that would have paid out $13 million in attorneys fees and only $155,000 in direct relief to class members.
The amici brief detailed the demonstrated ethical breaches by class counsel in this case, in particular based on their negotiation of two separate settlements that included patently excessive attorneys fees but little direct relief to the class.  The brief asked the Court of Appeals to remove class counsel, based on the Court’s fiduciary duty to protect class members from collusive and abusive settlements and its inherent authority to regulate the profession.  Amici argued that the removal of class counsel in this case is necessary to preserve the integrity of the legal profession and to prevent abuse of the class action mechanism, which is so vital to the protection of low income consumers.  Amici also proposed general guidelines for the Court of Appeals to adopt concerning attorneys fees agreements and cy pres awards in class action settlements.
The brief was written by PJC Appellate Director Suzanne Sangree.

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