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| 2004
News and Press Releases |
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SETTLEMENT "OR" DISMISSAL:
Lawyers Profit Most In Suit, Defendant Says/ Attorneys' Take Is Reported To Be 10 Times That Of Plaintiffs/ Lawyer For Firm That Sued Says Clients Got More Than Stated
By: Trisha L. Howard
St. Louis Post-Dispatch (Missouri). March 31, 2004
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EXCERPT: Lawyers took home 10 times more than their clients in a $350 million settlement with AT&T and Lucent Technologies Inc. that ended a class-action suit in Madison County, according to figures provided recently by Lucent. The lawyers who filed the case said at one point that they represented about 29 million people who had leased telephones from the companies for far more than it would have cost to buy them. But only about 92,000 class members made claims, collecting a total of $8.4 million, said John Skalko, a spokesman for Lucent. Meanwhile, the 44 lawyers from four firms who pursued the class action in Madison County Circuit Court got $84.5 million in fees and expenses. The settlement also required AT&T to provide $50 million worth of free calling cards to charity, to be divided equally among three local hospitals and three foundations. Contacted last week, the hospitals and foundations said they had yet to receive the donations. The rest of the settlement money will be returned to AT&T and Lucent. Under the terms of the agreement, the companies could recoup any unclaimed money. Stephen Tillery, whose firm filed the case against AT&T and struck the settlement, disputed the figures Tuesday in a written statement. "It is my belief that this distortion is part of their plan to create support in the media for federal legislation which would effectively ban state class actions," Tillery wrote. Skalko contradicted Tillery's claims, citing information that Lucent had received from the company hired to administer the claims process. "That's the only place where the claims could be filed, that's the only place where claims could be certified, and that's the only place where claims could be paid," Skalko said Tuesday. "We are confident that the figures they provided to us are accurate." The numbers provided by Lucent support what critics of class actions have long claimed is a problem with the suits: The plaintiffs' lawyers walk away rich while their clients end up with little actual benefit. "It clearly confirms everyone's beliefs, suspicions, even knowledge that the class-action system is being abused," said Ed Murnane, executive director of the Illinois Civil Justice League and vocal critic of Madison County's court system. "A legal device that could help make the court system more efficient, that could help ensure that people who have been legitimately wronged could be compensated, has instead become a cash elephant for class-action lawyers," Murnane said. "I say elephant because this is much bigger than a cash cow." Tillery, of the St. Louis firm Korein Tillery, said in a telephone interview three weeks ago that the actual payouts to class members were far greater than those supplied by Lucent. But in the past two weeks, Tillery has canceled two interviews in which he said he would provide alternate figures. In canceling a meeting set for Monday, Tillery cited ethical concerns about discussing continuing litigation. His written statement Tuesday alluded to the possibility of future litigation of the issue, saying, "There will be ongoing actions in court to force AT&T and Lucent to pay the total amount they agreed to pay in the settlement to the members of the class they have defrauded."
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