Friday, February 12, 2016
In a no-injury class action case, the plaintiff class alleges that the defendant violated a legal requirement under a statute (typically a consumer protection statute), and sues for "statutory damages"-- provided as the penalty for violation, even though the violation doesn't cause any actual injury or loss to anyone. Law professor Joanna Shepherd studies 432 no-injury class action settlements and trial awards from 2005-2015. Her study showed that about 60% of the total monetary award paid by defendants in these cases was allocated to the plaintiff class, and 39.7% to attorneys fees. But, much of the money allocated to members of the plaintiff class is never claimed. Actual consumers typically receive less than 9% of the total. The unclaimed money goes to a "cy pres" fund which gets distributed to not for profit organizations. Lawyers for the plaintiff class recover over 4 times the amount actually distributed to the class. Professor Shepherd concludes: "A result in which plaintiffs recover less than 10 percent of the award, with the rest going to lawyers or unrelated groups, clearly does not achieve the compensatory goals of class actions. Instead, the costs of no-injury class actions are passed on to consumers in the form of higher prices, lower product quality, and reduced innovation."
Here is an interesting op ed by a lawyer and director of the Harvard Law School Food Law and Policy Clinic. The author explains the inconsistent ways states regulate "sell by," "best by" and "expires on" dates on food. She supports federal regulation to make use of these labels consistent, and clearly indicate to consumers whether and when they need to worry about the safety of their food-- which in turn will reduce food waste in the US. She writes:
Date label confusion harms consumers and food companies, and it wastes massive amounts of food, which harms the planet. The U.S. wastes 160 billion pounds of food, or nearly 40% of food produced in this country, annually. Twenty-five percent of our freshwater is used to grow food we throw away. What gets tossed out goes into landfills, releasing hazardous methane into an already stressed atmosphere. Making date labels clear and uniform offers a relatively low-cost way to eliminate confusion and save consumers money, and it would make a big dent in the unnecessary waste of wholesome food.