E-Malt.com News article: USA: Anheuser-Busch InBev to compensate drinkers who thought locally brewed Beck’s was a German import

Plaintiffs’ lawyers say a class-action settlement involving Beck’s beer will provide considerable benefits to consumers who were allegedly tricked into believing the St. Louis-brewed beer was a German import, The Wall Street Journal reported on October 22.

In court papers, lawyers representing the plaintiffs who sued Anheuser-Busch InBev said the settlement approved by a judge on October 20 “confers over $20 million in cash benefits” to class members.

Lawyers for both sides, though, don’t expect the actual payout to class members to approach anywhere near that dollar figure.

The way the $20 million was calculated isn’t out of the ordinary in these types of cases. Judges and plaintiffs often rely on estimates of maximum value when assessing the fairness of a settlement and the requested attorneys’ fees.

But the method has attracted criticism, including recently from a prominent federal appeals court judge who said the calculations used by the plaintiffs’ attorneys in another class action led to a “scandalous” attorneys’ fee award.

Anheuser-Busch agreed to give Beck’s drinkers 10 cents back for every individual bottle purchased; 50 cents for a six-pack or $1.75 per 20-pack. Consumers who back up their claims with receipts can get refunds up to $50 a household. Claims without receipts are capped at $12. The agreement also awards up to $3.5 million in attorneys’ fees.

The $20 million figure is based on an analysis by an economist at Anderson Economic Group LLC who used sales data to estimate the number of Beck’s consuming households. That number, 1.7 million, was then multiplied by 12, representing the maximum payoff if every claim lacked proof of purchase and sought the maximum $12.

Plaintiffs attorney Thomas A. “Tucker” Ronzetti of Miami firm Kozyak Tropin & Throckmorton LLP told Law Blog that they’re hoping for 170,000 claims but said 60,000 claims so far had been filed with the claims deadline less than a month away.

Neither side in the case would guess what the final payout would be. But the general counsel for Anheuser-Busch’s U.S. operations, Katherine Barrett, made this prediction to Law Blog. “It’s certainly possible that the $3.5 million fee collected by the plaintiffs’ attorneys will outsize the benefit paid to consumers, an outcome that is increasingly more common in class action suits such as this,” she said in a statement.

Mr. Ronzetti said the benefits to consumers “extend beyond the money they get back,” noting that Anheuser-Busch also agreed to packaging and marketing changes that he said would prevent consumer deception. (AB InBev didn’t admit any wrongdoing by settling the lawsuit.)

In court papers, he and co-counsel described the $3.5 million attorneys’ as “modest” and based on a federal appeals court precedent. “The requested fee is only 10.9% to 15.3% of the estimated value of the Settlement to the Class,” they wrote.

Judge Richard Posner of the Seventh U.S. Circuit Court of Appeals drew attention to how class-action settlements are valued in an opinion last year involving a class action case against a company that allegedly sold defective windows.

The final settlement directed the company to pay $11 million in attorneys’ fees based on claims that the settlement was worth $90 million to the class. Judge Posner said the aggregate value of benefits was at most $8.5 million, labeling the settlement “inequitable — even scandalous.”

Litigator and class-action activist Ted Frank raised similar concerns last year when he objected to a settlement of allegations that Gillette Co.’s Duracell unit misled consumers about the battery life of a premium battery line.

While approving the settlement, the federal trial court judge in Florida questioned the plaintiffs’ assertion that their request for $5-plus million fee was more than reasonable. The lawyers said it was only 10% of the estimated value of the settlement. “[T]he $50 million calculation is somewhat illusory, because the parties never expected that Gillette would actually pay anything close to that amount,” wrote Judge Gregory A. Presnell.

Mr. Frank told Law Blog that inflated estimates of settlement value are common in class actions and help plaintiffs’ lawyers make their fee requests “seem more reasonable.” He said he’s hoping the U.S. Supreme Court will take up the issue, saying he plans to ask the justices to review the battery settlement, which was affirmed by a federal appeals court.


23 October, 2015