A class-action lawsuit was filed in the U.S. District Court for the Northern District of Illinois against a window manufacturer. The basis for the reversal of the approved $90 million settlement for the class-action lawsuit claiming defective windows was due to inequities with respect to the attorney fees of approximately $11 million; meanwhile, the clients — the consumers — would get less than $8.5 million in total.
According to a section of the court’s opinion written by Justice Richard A. Posner, the “class counsel sold out the class.” The settlement was approved by the district court judge and has now been reversed.
The class-action lawsuit claimed that casement windows manufactured between 1991 and 2006 for Pella Corp.’s “Pro-Line Series” had a design defect.
The settlement negotiated between the parties was worth approximately $90 million to the class and would have paid the plaintiffs’ lawyers $11 million. The district court judge approved the settlement over objections made by some of the class members.
The basis of the reversal was essentially the 7th Circuit panel’s value of the attorneys to the settlement. Four of the originally named plaintiffs were removed as plaintiffs at some point during the litigation. The appeals panel was critical of that. In addition, there was another improper procedure, which included one of the plaintiff’s lawyer’s father-in-law, who acted as one of the named plaintiffs. The court said there was a conflict of interest in acting as a class representative because of the generous fee for the class counsel. The appeals court also noted that one of the plaintiffs’ counsel and his attorney wife are embroiled in litigation over a former partnership. In essence, they may have needed an infusion of money to take care of the past trouble.
In summary, the court of appeals rejected the settlement as being unfair to the class members. The case was returned to the district court for further proceedings. Incidentally, the attorneys for the defendant Pella did not object to the settlement and in fact argued that the settlement should be upheld.
Kent Eubank, et al. v. Pella Corp., et al., Nos. 13-2091, 13-2133, 13-2136, 13-2162 and 13-2202 (U.S. Court of Appeals, 7th Cir. 2014).
Kreisman Law Offices has been handling commercial litigation matters in state and federal courts for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Rosemont, Melrose Park, Elmhurst, Richton Park, Alsip, Blue Island, Cicero, Waukegan, Joliet, Des Plaines, Wheeling, Prospect Heights, Deerfield and Palos Park, Ill.
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