Reuters) - A federal appeals court on Friday voided RadioShack Corp's class-action settlement with customers who objected to its putting credit and debit card expiration dates on receipts, saying the benefits of the accord appeared too small relative to the proposed legal fees.
The 7th U.S. Circuit Court of Appeals in Chicago said there was no showing that the proposed $1 million fee was reasonable for a settlement calling for roughly 83,000 class members to each receive a $10 voucher redeemable at RadioShack stores.
Writing for a three-judge panel, Circuit Judge Richard Posner noted that RadioShack's "fragile" state, including the electronicsretailer's recent announcement that it may file for bankruptcy, might have hastened the perceived need to settle.
But he also said the vouchers might not all be redeemed, reducing the settlement's value, and that revised terms could have shifted some of the "exorbitant" legal fees to customers.
"The law quite rightly requires more than a judicial rubber stamp" to class-action accords, Posner wrote, just 11 days after oral arguments. He returned the case to the federal district court in Chicago for further proceedings.
The accord was intended to resolve claims that RadioShack violated the federal Fair and Accurate Credit Transactions Act by printing card expiration dates on customers' receipts, which if lost could increase the potential for identity theft.
Original article: Here
Initiative Legal Group is a law firm based in Los Angeles. ILG prosecute class actions on behald of employees, consumers and others who have had their rights violated. Learn more at www.initiativelegal.com
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