Lakin's 'reverse auction' theory rejected in NJ Sprint settlement; class to get about 44 cents

Steve Korris Jan. 28, 2010, 8:00am



NEWARK, N.J. – Brad Lakin failed to prove that Paul Weiss and Richard Burke settled a class action against telephone company Sprint for less than Lakin would have obtained in Madison County, U.S. District Judge Jose Linares ruled.

Linares approved the settlement on Jan. 15, rejecting Lakin's theory that Weiss and Burke improperly displaced his client, Jessica Hall, as class representative.

"Aside from the mere overlap of time between when counsel for Jessica Hall and class counsel were apparently negotiating with Sprint, the court has been presented with no evidence of collusiveness," Linares wrote.

The settlement provides $14 million in cash and $3.5 million in other relief for a class estimated at 40 million, he wrote.

By that estimate, the average class member can expect about 44 cents of relief.

Lakin had delayed approval for a year by moving to disqualify Weiss and Burke, reject the settlement, and deny them any portion of a $5,775,000 class counsel fee.

It couldn't have helped Lakin that his "reverse auction" theory implicated Linares as much as it implicated Weiss and Burke.

Linares defined reverse auction as "the practice whereby the defendant in a series of class actions picks the most ineffectual class lawyers to negotiate a settlement with the hope that the district court will approve a weak settlement that will preclude other claims against the defendant."

He wrote that Judge Politan, who mediated the case for five months, dismissed the idea.

He quoted Politan's declaration that, "I never once observed anything that would suggest any collusion between any persons or parties."

Linares wrote that Politan declared he was hard pressed to understand the suggestion.

He wrote that Politan declared the mediation was extremely difficult to conduct.

He wrote that Politan declared it was as hard fought as any he had conducted.

"In light of these circumstances, the court finds Hall's contentions regarding collusion to be baseless," Linares wrote.

Linares approved a $5,775,000 class counsel fee, with most of it going to Weiss, Burke and others who worked with them.

Linares earmarked $565,950 for a separate group that claimed its work on a parallel case in California benefited the class.

He set a Feb. 3 deadline for the group to allocate it among themselves.

He tried to resolve another fee dispute, but he failed.

He earmarked $254,100 for Scott Bursor of New York and others in a parallel case, and Bursor immediately appealed.

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