State of Texas Objects to Ameritrade Settlement

by Brian Wolfman

A little while back, Public Citizen Litigation Group objected to the proposed settlement in In re Ameritrade Accountholder Litig., No. 3-07-cv-02852-VRW (N.D. Cal.), on behalf of the named plaintiff who instigated the litigation. The case concerns alleged massive security breaches in Ameritrade's on-line stock trading accounts. View our objections to see why we think the settlement stinks.

I'm writing now to tell you that the State of Texas has objected to the settlement. In 2005, Congress passed and President Bush signed the Class Action Fairness Act (CAFA), one provision of which requires the parties to notify state Attorneys General of class action settlements that affect their citizens and to send the AGs certain case documents. Some class action gurus have been skeptical of that requirement, thinking that it would do no more than increase the size of the AGs' circular files. But it appears that Texas's objection to the Ameritrade settlement may have been prompted by the CAFA notice.

Comments

[Brian Wolfman]

How often have you heard class counsel crow that their settlements were great because the US AG or the state AG did not object? If you could list the cases I'd appreciate it. (It's a bit strange, since the US AG doesn't object to consumer class action settlements.) Thanks.

[Rob Gaudet]

Thanks for the post, Public Citizen. I wonder how often States submit objections to class action settlements, as in this Texas example. I bet it's extremely rare. Nevertheless, I've seen class counsel crow about how great their pending settlements were because there was no objection filed by the U.S. AG or by any State; they've raised this point in briefs seeking settlement approval at a final hearing. I wonder if the U.S. DOJ ever objects. Perhaps it should. Best regards, Rob