By Michael Fuller, Member at Large, Consumer Law Section Executive Committee

In re: HP Inkjet Printer Litigation (9th Cir. May 15, 2013)

The Ninth Circuit held attorney fee awards in class settlements involving a coupon component must be based, at least in part, on the redemption value of the coupons.

A class action settlement entered by HP in 2010 provided coupon and injunctive relief to class members. The district court used the loadstar method to award $1.5 million in fees to class counsel in light of the results achieved.

The Ninth Circuit reversed and remanded, holding that 28 U.S.C. § 1712(a)-(c) requires separate fee calculations.

The Court reasoned that fees attributable to the coupon recovery must be based on the redemption value of the coupons and fees attributable to the injunctive relief must be based on loadstar.

The Court noted that the structure of the settlement prohibited issuance of coupons until after entry of final judgment, thus making it impossible for the district court to calculate redemption value as required by § 1712(a).

Read the full opinion for complete analysis: http://cdn.ca9.uscourts.gov/datastore/opinions/2013/05/15/11-16097.pdf

By David Koen, Past Chair, Consumer Law Section Executive Committee

On June 6, 2013, the Oregon Supreme Court issued decisions in Brandrup v. ReconTrust Company, N.A. and Niday v. GMAC Mortgage, LLC. In both cases, the court decided that the financial industry creation Mortgage Electronic Registration Systems, Inc. (“MERS”) did not qualify as a “beneficiary” of a trust deed for property pursuant to ORS 86.705(2). The court held that only the actual beneficiary, the lender, could foreclose nonjudicially and only if it was entitled to enforce the loan. The court decided, however, that when foreclosing nonjudicially in Oregon, a lender need not record a transfer of a trust deed that occurs by operation of law upon the transfer of the underlying promissory note.