by Paul Alan Levy
Our experience at Public Citizen has been that objectors to proposed class action settlements can often expect a hostile reception. Both named plaintiffs and defendants – and their lawyers — generally have a common stake in getting the settlement approved, and they have developed a relationship with the judge already. The judge, too, has already given conditional approval (class members generally don’t hear about the settlement otherwise) and beyond that a judge can have a personal stake in approving the settlement – if the settlement fails, the judge might have a mess of a case that remains to be tried, and dockets are too large as they are. The judge’s sense of personal stake is heightened if the settlement was developed through a mediation process encouraged by the judge. So the frequent reaction to opponents of a proposed settlement is bullying, threats of sanctions and damages and the like; when the settlement is otherwise dicey, everybody with a stake has extra incentives to drive off objectors without having to discuss the merits.
So, when a reporter who often covers Internet-related cases asked for my reaction to a story in the Detroit Free Press about an injunction that had been issued in a Dearborn, Michigan case to stop a local activist named Majed Moughni from fomenting opposition to the proposed settlement of a class action over McDonald’s having sold non-halal chicken mcnuggets that had been advertised as halal, I approached the case with hackles raised.
How the Injunction Came About
Moughni had a Facebook page that he called “Dearborn Area Community members,” so that is where he posted his biting comments. His concern was with the fact that the settlement was exclusively for a cy pres award – not a penny in damages for the class, no injunction forbidding a repetition, but good money for two local charities plus top dollar in lawyers fees as well as $20,000 for the named plaintiff. The lawyers for the plaintiff class threatened Moughni with both a defamation suit and disciplinary charges (Moughni is a lawyer, although not by any means a specialist in class actions). Moughni would not back down, so the plaintiff’s lawyers asked the judge to shut down the page — or, more precisely, they asked that Moughni be required to take everything he had said about the case down, and to post on his Facebook page instead what they said (and what the Court had said) (That is why I am not linking to my client’s Facebook page – it isn’t really HIS page any more. Let the parties do their own publicity.) And, they asked that Moughni be forbidden to make any statements that class members might see or hear, such as by talking about the litigation to the press which, in turn, might print stories from which class members might learn Moughni’s views.
The lawyers continued their claim that they had been defamed, but really, they said, this isn’t about us, this is about protecting the poor class members against having their confidence in the lawyers undermined, protecting public confidence in the court system, and preventing class members from being confused about whether they should object to having their claims for damages extinguished so that settlement funds could go to the charities (and the lawyers). The judge held a hearing a few days later; plaintiff’s counsel spoke his piece, McDonald’s lawyers chimed in with their agreement, but Moughni’s attempt to speak was rebuffed with a peremptory “Don’t you even” from the judge. And the judge ruled, granting the injunction almost exactly as requested.
Learning about all of this just confirmed my sense of what must be going on in this case. It struck me as an outrage, and quite typical of what sometimes gets done to class action objectors – and which consequently deters people of good faith from objecting. I felt that regardless of the merits of Moughni’s objections, something had to be done to stop the repression in its tracks. The process of class action objection is an important one, because there are enough crappy and collusive settlements out there that objectors need to be protected against retaliation. And protecting the right to object, in the end, makes the class action settlement process work better.
Motion Opposing the Injunction
Consequently, we agreed to represent Moughni in getting the injunction overturned because it is a prior restraint as well as compelled speech. We ackowledge that Moughni could have worded his statements more carefully in a few respects, but the attacks on his comments as "false" or even "misleading" are vastly overblown, and even if there were a basis to censor a couple of fragments, why the amazingly broad order?
We also argue – turning some of plaintiff’s own arguments against him – that it is the injunction, not Moughni’s criticisms, that interfered with the settlement approval process by, in effect, misleading the class about whether there were others who opposed the settlement. The suppression of speech, we argue, deprived the class of a fair chance to decide whether to opt out or object. Because the notice period before approval is required by constitutional due process (at least when the suit is for damages), approval of the settlement without lifting the prior restraint first would violate the due process rights of the class.
Taking a Step Back About the Merits of the Settlement
And yet…. was Moughni right to object to the settlement? We know that cy pres settlements are sometimes the only sensible remedy in a class action case, sometimes because not all of the damages set aside are collected, and sometimes because there just isn’t any practical way to hand out the damages to those affected. During the course of my discussions with the parties’ lawyers, after I told them that we would enter the case, I got the typical bluster and the implicit threat of turning the request for sanctions on me — an indication that the lawyers think little of the merits of their case. And I have seen enough of these situations that I take the threats as a backhanded compliment. At the same time, one of the lawyers, at least, had some interesting things to say about why the settlement might well be a sensible one in the circumstances. Moughni has his own view, but our motion takes no position on the merits of the settlement: our only point is that Moughni ought to have the right to say what he thinks about the settlement, and that the remedy for speech claimed to be false is not less speech but more speech. In my own mind, I have come to no conclusion about the merits of the proposed settlement.
But that just leaves me wondering, if the settlement is so wonderful, why the lawyers felt they had to resort to suppressing critical speech instead of just putting their own replies into the marketplace of ideas. At the hearing for an injunction, they had reminded the Court of how attentive the national media press had been to their publicity about the settlement (115 national media outlets, and a hundred million viewers, they claimed); surely the media would continue to give them a platform.
My view is that the next few days will tell the public a great deal about the true motives and concerns of the parties’ lawyers — if they continue to bully, we will know that they consider bullying to be the best way of protecting the settlement. Stay tuned.
UPDATE:
The American Civil Liberties Union of Michigan filed a brief as amicus curiae explaining why the injunction is constitutionally impermissible, and hence should be lifted.
