Time for Prudential to write checks
One year and four months after a class action settlement was hammered out, Prudential policyholders may actually find checks in their mailboxes in the near future.
The U.S. 3rd Circuit Court in Philadelphia last week dismissed an appeal filed against Prudential's settlement. Pittsburgh attorney Michael Malakoff had opposed the $2 billion settlement on behalf of policyholders, contending it would have no benefits for up to 85 percent (or 7 million) Prudential policyholders.
Although the settlement payout will go forward, the whopping $90 million fee that the lawyers representing policyholders had negotiated now goes under review — a legal bill thought to be largest class action bill in history. Judge Anthony Scircia wrote in his decision, "The district court's basis for, and calculations of, the appropriate fee percentage was unclear in light of the facts and the cases it referenced."
At question is who did what for the case, and how much is really billable. Scirica says the lawyers' fees should be recalculated because efforts by state regulators, who conducted extensive investigations into Prudential's practices, greatly contributed to the lawyers' settlement. Lead attorney Melvyn Weiss of New York has claimed that the $90 million fee is due for 100,000 billable hours of work, conducted by 16 law firms across the country. The legal proceedings required more than 250 lawyers and paralegals. "What is important is that the District Court evaluate what class counsel actually did and how it benefited the class," wrote Scirica.
But even with an approved settlement, how much money will make its way back to those who were victims of Prudential's deceptive sales practices from 1982 to 1995? Although 8 million policyholders could have joined the class action suit, only 640,000 submitted claims and an additional 500,000 chose Accelerated Dispute Resolution (ADR).
Prudential says it hopes to have all of the claims processed by the end of the year. If you have a claim pending and wish to know the status, call the Prudential hotline at 800-736-8913.