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Big Story 10

Jay Edelson says TikTok settlement, Girardi bankruptcy show class action bar is 'broken'

In the span of three months, Jay Edelson has helped upend the career of Tom Girardi, wrested $650 million from Facebook, and thrown a wrench into a planned $92 million settlement with TikTok.

But Edelson says his ambition is bigger: He wants to reshape the class action system that’s made him and his Chicago law firm millions. Six years after The New York Times dubbed him “the most hated person in Silicon Valley,” Edelson is picking a fight on his own turf.

“The plaintiffs bar is broken,” said Edelson, whose 14-year-old firm, Edelson PC, made its name suing tech companies.

Edelson said he’s backing a bill introduced last month in the Illinois House of Representatives that would bar attorneys from advertising settlements to potential clients when no settlement fund yet exists.

He also wants to make it easier for class-action plaintiffs to discover if their lawyers have been accused of misappropriating funds. And he’s pushing for a class action task force in Illinois that would “seek aggressive reforms” like tying attorneys fees to claims rates in settlements, as well as measures to bolster the diversity of the plaintiffs bar.

The legal drama surrounding Girardi, the famed plaintiffs lawyer who’s mired in bankruptcy proceedings and facing prosecutors’ scrutiny after he failed to disburse at least $2 million in settlements funds, is “very instructive” on the need for reforms, Edelson said.

Edelson sued Girardi in December, alleging he and his soon-to-be ex-wife, “Real Housewives of Beverly Hills” star Erika Jayne, used money set aside for victims of Lion Air Flight 610 to fund their lavish Hollywood lifestyle. The claims helped spark a flurry of complaints against Girardi that led to him and his firm being forced into bankruptcy in January.

A California state judge in February appointed Girardi’s brother Robert Girardi as his temporary conservator. Robert Girardi has asserted that his brother is mentally incompetent, but Edelson’s firm has argued in Los Angeles bankruptcy court that Girardi is faking it.

“Now he’s arguing that he is mentally incapacitated, which we think is not true,” Edelson said.

Robert Girardi hasn’t responded in court to those allegations, and his attorney, Leonard Pena, was not available for comment. Attorneys for Tom Girardi and Girardi Keese in the Lion Air Flight 610 case, Evan Jenness and Michael Monico, respectively, did not respond to requests for comment.

‘TIMES ARE CHANGING’

As evidence that the plaintiffs bar cares mainly about itself, Edelson also pointed to a proposed $92 million class-action settlement between ByteDance, the Chinese company that owns TikTok, and U.S. users of the short video app. The TikTok app has been accused of infiltrating users’ devices to extract private data.

In a March 1 filing in Chicago federal court, Edelson slammed the national settlement as “hastily drawn up,” with “an embarrassingly low 1.5% claims rate.” Class members would only receive $3 each, which Edelson argued was inadequate.

He compared the “joke” TikTok settlement with his own $650 million class settlement with Facebook, which a Chicago federal judge approved in late February. Facebook was sued for allegedly violating an Illinois biometric law with the facial recognition settings on its platform.

Under the Facebook deal, which Edelson secured along with attorneys from Robbins Geller Rudman & Dowd and Labaton Sucharow, members of the class are set to get at least $345 each.

“Then you look at TikTok, and it’s exactly the opposite,” Edelson said.

The plaintiffs lawyers spearheading the TikTok settlement called Edelson’s comments “inflammatory and false,” as well as self-serving.

“The $92 million settlement ranks among the most comprehensive privacy settlements ever – particularly compared to Mr. Edelson’s own track record of settlements where millions of class members did not receive any money at all,” co-lead counsel Elizabeth Fegan, Ekwan Rhow and Katrina Carroll said in a joint statement.

They rejected Edelson’s “angry rhetoric” about the plaintiffs bar, and said the TikTok settlement represents a “consensus in the best interests of the class.” U.S. District Judge John Lee in Chicago must still approve the deal.

Edelson, 48, said while he’s still committed to plaintiffs-side work, the class action practice is “plagued by attorneys who don’t believe in servicing clients.”

“Times are changing,” he said, again contrasting the Facebook and TikTok cases. “It’s such a fun moment where you just see there is a clear battle between the old guard and the new guard.”

Update: This story was updated to reflect that the Nick Larry Law firm did not take part in the Facebook settlement, as it had withdrawn from the case.

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