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LOS ANGELES � A federal judge has declined to approve a $49 million settlement with the owner of the nation’s largest provider of bar review courses, BAR/BRI, citing concerns about the incentive awards paid to some of the class representatives. At a final settlement hearing on June 18, U.S. District Judge Manuel Real for the Central District of California asked plaintiffs’ lawyers to provide time records reflecting the hours worked by five of the seven class representatives who each stand to receive a potential incentive award of $25,000 or $75,000 from the settlement. The judge also asked both sides to file briefs by June 26 on the appropriateness of donating part of the settlement funds to legal charities under the “cy pres doctrine,” which allows unclaimed funds to be given to a related charity. Real continued the final settlement hearing to July 9. The case, which was filed in 2005, alleged that West Publishing Corp., which owns BAR/BRI, and Kaplan Inc., which sells preparation courses for the Law School Aptitude Test (LSAT), conspired to monopolize both markets. Filed as an antitrust action, the case originally sought an estimated $1,000 in estimated overcharges each class member paid for a bar review course. Based on that calculation, the case sought triple the $300 million in damages given a potential class of nearly 300,000. Under the settlement, each class member would receive an estimated $125. A dozen line up At the June 18 hearing, more than a dozen lawyers objected to the settlement, including the son of Eliot Disner, a former partner at McGuireWoods who brought the case in 2005. McGuireWoods ousted Disner from the firm last month after he filed briefs on behalf of three class representatives who are objecting to the settlement, which was reached in February after McGuireWoods, based in Richmond, Va., acquired Disner’s Los Angeles-based firm, Van Etten Suzumoto & Becket. The judge denied a request from Disner, who was not present at last week’s hearing, to serve as co-lead counsel in the case last week. Some lawyers raised questions about Disner’s removal from the firm; the rapid settlement of the case; the plaintiffs’ counsel’s lack of experience in class actions and antitrust law; the settlement’s apparent lack of injunctive relief; the inability of objectors to access certain documents in the case; and the inadequacy of the settlement notice given to potential class members, namely its failure to mention that three of the seven class representatives did not approve of the settlement. But the judge raised his own questions about the incentive awards granted to five of the class representatives. Several lawyers had stated that the incentive awards signaled potential “collusion” between plaintiffs’ counsel and the class representatives. “I don’t know what the incentive would be to bring this lawsuit necessarily other than to get money,” Real said. Five choices The judge asked several lawyers to offer their preference among five ways in which he suggested the incentive awards could be changed: nDeny the awards altogether. nLower the amounts of the awards. nForce plaintiffs’ counsel to pay the awards. nForce defense counsel to pay the awards. nGrant the representatives the same amount as the other class members. At one point, the judge told Loredana Nesci, a lawyer in Burbank, Calif., and one of the class representatives receiving an incentive award who is objecting to the settlement: “You had a contract that could be in conflict of interest with the class.” Nesci disputed the assertion. She said the case “took time away from my own practice” and that she “probably spent more time on this than $75,000.” The judge also questioned the cy pres element of the settlement. Some lawyers had said the settlement was structurally unfair and inadequate because it includes a cap on individual awards of 30% of the amount each class member paid for the bar review course while allocating a portion of unclaimed funds to charitable legal causes under the “cy pres doctrine.” ‘No rush’ Sidney Kanazawa, a partner in the Los Angeles office of McGuireWoods who helped draft the settlement, said there was “no rush, no pressure, to settle this case,” noting that the parties settled 11 days before trial. He said his firm never guaranteed the incentive awards to class representatives, of whom three, all objectors, insisted on $75,000. Leslie Werlin, another Los Angeles partner at McGuireWoods, said, “The bottom line is it remains completely in the court’s control to award some amount.”

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