The Great Tuna Settlement of 2015
A recent newspaper article spurred us to look into The Great Tuna Settlement of 2015. What we found, of course, was more evidence of client recruitment by enterprising plaintiff lawyers.
In Spring 2015, a California law firm announced it had settled a nationwide class action lawsuit against Starkist for $12 million. The basis of the lawsuit was that Starkist’s five-ounce cans of tuna did not actually contain five ounces of meat. The cans were, it was alleged, slightly underfilled.
Under the proposed settlement, consumers were to receive a cash award of $25 or tuna vouchers worth $50, but the fine print contained a caveat: the settlement was subject to “pro rata dilution if the total amount of claims exceeds the available settlement funds.” In other words, the more people who joined the class, the lower each class member’s award would be. The federal judge in California overseeing the case found that the $12 million settlement was adequate because the plaintiff’s case was “relatively weak.” It turns out it was going to be difficult to establish that a substantial number of underweight cans were sold to the public.
Based on rates of $300 to $850 per hour, the plaintiff’s lawyers claimed to have $1.6 million of billable time in the file. They asked to be awarded a $4 million fee. Case-related expenses topped $500,000. Thus, the funds available to the class were reduced to a little under $7.5 million.
Multiple news outlets picked up the story. The unexpected publicity resulted in 2.5 million claims being submitted by consumers. Because of the “pro rata dilution” provision in the settlement agreement, each cash claim was reduced from $25 to under $2, and each voucher claim was reduced from $50 to around $4.
Due to appeals, the settlement still has not been funded.
While all of this is interesting, none of it is what really caught our attention. Here’s what did …
In asking for court approval of the settlement, the lead plaintiff’s lawyer filed a declaration explaining how his firm got the case. He explained that his firm saw a news report about how district attorneys in three California counties had settled with several companies, including Starkist, for alleged misrepresentation about their tuna products.
The plaintiff law firm then took it upon itself to investigate tuna can contents, which is explained in detail in the lawyer’s declaration.
Then, in a single sentence, the lawyer explained how his firm found its clients: the firm’s attorneys “corresponded with and interviewed class members.” Ultimately, the law firm filed four single-plaintiff lawsuits in four states—California, New Jersey, Florida and New York—and then it abandoned three of the suits.
Reading between the lines, it is clear that this law firm saw an opportunity, developed a case and then recruited four people to serve as class plaintiffs—resulting in a $4 million pay day for the lawyers, whereas their clients will maybe receive $2 each.
Don’t get us wrong. If a can claims to contain five ounces of tuna, it should contain five ounces of tuna! But we continue to have a problem with lawyers soliciting clients for their own enrichment. If there are no consequences for ambulance chasing, then it will never end.
Did you know that under a Texas law advocated by TLR and passed by the Legislature in 2003, if members of a class are paid in vouchers when a class action settles, their lawyers are paid in vouchers, too? If vouchers are good enough for the clients, they are good enough for the lawyers. Read more about that reform here.