PASADENA, CA—The U.S. Court of Appeals for the 9th Circuit rejected a settlement on August 19 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.
As reported by Tim Hull, of the Courthouse News Service, the class action combined 26 lawsuits around the country that were brought against Motorola, Plantronics, and GN Netcom. The suits contended that the manufacturers had failed to disclose that extended use of their Bluetooth headsets could lead to noise-induced hearing loss.
The combined suit, filed January 16, 2009, in California’s Central District Court, sought damages on behalf of millions of individuals who had purchased Bluetooth headsets between June 30, 2002, and Feb. 19, 2009. If successful, it could have won damages in the hundreds of millions of dollars. However, an agreement reached by lawyers for the two sides settled for very much less
Under its terms, attorneys for the class were to receive as much as $850,000 in fees, plus $1 million to notify consumers about the settlement agreement. The settlement also called for defendants to pay a total of $100,000 to be distributed among four non-profit organizations dedicated to the prevention of hearing loss.
Although the District Court Judge approved the agreement, the individual consumers were outraged and appealed the case to the 9th Circuit Court in Pasadena. There, a three-judge panel voted to reverse the settlement and return the case to the lower court for further consideration.
“INFERENCE OF UNFAIRNESS SEEN”
Writing for the District Court, Judge Michael Daly Hawkins said, “We agree that the disparity between the value of the class recovery and class counsel’s compensation raises at least an inference of unfairness, and that the current record does not adequately dispel the possibility that class counsel bargained away a benefit to the class in exchange for their own interests.”
Therefore, Hawkins vacated the lower court’s action and remanded the case back to District Court so that it “may conduct a more searching inquiry into the fairness of the negotiated distribution of funds, as well as consider the substantive reasonableness of the attorneys’ fee request in light of the degree of success attained.”
