Theodore Frank, professional class action settlement objector

On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court.
The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action
Fairness, to a class action settlement involving Google as Defendant.

The Google class action settlement is one of many class action settlements Mr. Frank has
objected to. Objecting to class action settlements is Mr. Frank’s profession.

Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between
Google and class action lawyers. The class action complaint says that Google violated users’
privacy rights.

Under the settlement, the lawyers are to be paid more than $2 million, but members of the class
they represented get nothing. Instead Google agreed to make contributions to institutions
concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent
College of Law.

A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San
Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-
content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace
expressed concerns about the payments.

Google’s position is that while class action settlements can be bad, the particular settlement is
good. The Google brief on the Writ of Certiorari to the Supreme Court is at
https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-
961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that
professional class action settlement objectors play as class action spoilers. Not surprisingly,
there are those who are highly critical of the objectors’ spoiler role, and others who see at least
some objectors as a force for good, limiting class actions that lack social value.

Commenters have observed that there is a cottage industry of professional objectors: attorneys
who earn a livelihood by opposing settlements on behalf of unnamed class members.
Professional objectors may threaten to file meritless appeals of final judgments merely to extract
a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to
avoid the cost of delay.

Professional objectors are widely unpopular, “perhaps the least popular parties in the history of
civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are
increasingly weary of professional objectors.”

Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take
payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept
“green mail,” a name for payments demanded by, and made to, an objector to drop an objection
to a settlement.

“That’s always been the position of the Center for Class Action Fairness,” Frank said to
Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for
opportunities for courts to order divestments of green mail payments.”

“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a
non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-,
60- and 70-percent pay cuts, we couldn’t do what we do.”

The bottom line point is that there can be great value in legitimate and well grounded objections
to class action settlements made in good faith. It polices the settlement process. The policy
challenge is to allow such beneficial objections while suppressing extortionate green mail
objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at
https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the
article by Lopatka-Smith, which is at
https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-
action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-
lightning-n57982069046/

This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content