Charity Loses $700K Award After Complaining About Gift Cards

Bloomberg BNA discusses Hochstetler v. Pacific Gateway Consession, LLC with Ted Frank.

Pacific Gateway Concessions and a consumer class found a new recipient for $793,000 worth of leftover settlement funds after Consumers Union, their originally designated charity, said it was unable to use the funds in their gift-card form ( Hochstetler v. Pac. Gateway Concession, LLC , 2017 BL 267678, N.D. Cal., No. 14-cv-04748, 8/1/17 ).

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Class action watcher and frequent objector Ted Frank more broadly criticized the settlement.

“Class counsel traded away the class’s rights to ensure that no one would be in a position to tell the district court that class counsel was legally entitled to only $175 in fees at most and instead received $200,000 while the class received only $700 worth of coupons that look like may never get used,” Frank said in an email.

He called the attorneys’ fees further into question: “The settlement facially violates the Class Action Fairness Act, as Section 1715(e) prohibits paying class counsel for coupons issued in cy pres.” Frank is director of the Competitive Enterprise Institute Center for Class Action Fairness in Washington.

Read the full article at Bloomberg BNA.