The Seventh Circuit has written a scathing rejection of a "scandalous" class-action settlement by in which a lawyer inserted his father-in-law as a named plaintiff and negotiated a $2 million advance on his fee.
Judge Richard Posner wrote in the opinion (attached below) that the lower court should have heeded dire warning signs.
"Almost every danger sign in a class action settlement that our court and other courts have warned district judges to be on the lookout for was present in this case," Posner wrote. "The district court approved a class action settlement that is inequitable-- even scandalous."
Lead attorney Paul M. Weiss' agreement was structured to pay him and his co-counsel $11 million.
Though the settlement was valued at $90 million, the class "could not expect to receive more than $8.5 million from the settlement, given all the obstacles that the terms of the settlement strewed in the path of the class members," Posner wrote.