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Ninth Circuit Orders Bluetooth Settlement Back to Court

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September 01, 2011

Ninth Circuit Orders Bluetooth Settlement Back to Court

By David Sims, TMCnet Contributing Editor

According to industry journal Hearing Health Matters, the U.S. Court of Appeals for the 9th Circuit has rejected “a settlement that would have given consumers who suffered hearing loss from using Bluetooth headsets a tiny fraction of the amount that would have been awarded to their lawyers.”

The Courthouse News Service reported that the class action “combined 26 lawsuits around the country that were brought against Motorola, Plantronics (News - Alert), and GN Netcom,” to argue that the manufacturers didn’t properly disclose that “extended use of their Bluetooth headsets could lead to noise-induced hearing loss.”

The suit, filed January 16, 2009, in California’s Central District Court, sought the usual millions of dollars of damages on behalf of “millions of individuals who had purchased Bluetooth headsets between June 30, 2002, and Feb. 19, 2009.”

What happened next was a classic lawyer sellout: The case settled for up to $850,000 in legal fees, $1 million to notify consumers about the settlement agreement and for defendants to pay about $100,000 to four non-profit hearing loss prevention organizations. The District Court Judge signed off on the deal, but outraged consumers appealed the case to the 9th Circuit Court, which voted to reverse the settlement and return the case to the lower court.

Writing for the District Court, Judge Michael Daly Hawkins said there’s the possibility that “class counsel bargained away a benefit to the class in exchange for their own interests.”

In other words, the lawyers saw they were going to make out okay, so called it a day to avoid the heavy lifting and left their clients high and dry.

The good legal website noted that the appeals court “singled out a kicker provision segregating the fee request from class recovery: if the request was disallowed in whole or part, the money would revert to the defendant.”

As they explained it, when used in conjunction with the clear sailing provision “whereby the defendant would not contest the fee request, the effect is to shield the fee request from scrutiny.”

You wouldn’t think even hardened trial lawyers would try to defend this with a straight face, but they do, arguing that this somehow benefits the class, as PointOfLaw says, “because the fees will come from the defendants, rather than from the class, as in the cases where a common fund is used to pay both the class and attorneys. This is an absurd fiction divorced from economic reality, and it is a very good sign that the Ninth Circuit rejected it.”

So we have a small blow struck for common sense. More where that came from, please.

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David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Juliana Kenny

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