A proposed settlement that could net consumers $5 million in refunds and coupons from the nation's largest poultry producer moved a step closer to fruition Friday when a federal judge signed off on the preliminary agreement.
Judge Richard D. Bennett repeatedly expressed concerns about the $3 million in plaintiffs' attorneys' fees and court costs that could be paid by Tyson Foods under the terms of the settlement. Bennett said he would be hard-pressed to sign off on what he called such a disproportionate scale, with the plaintiffs' counsel set to get about 37.5 percent of the total, with consumers' refunds capped at $50.
Consumer lawsuits were filed across the country in 2008 and later consolidated in Baltimore, accusing Tyson of lying about the drugs that go into its birds. The company was marketing its poultry as being raised without antibiotics.
Tyson Foods, based in Arkansas, denies any wrongdoing under the deal, which was outlined in a public hearing this week.
While both sides agree on the outlines of the settlement, a point of contention now lies between the judge and counsel for the plaintiffs, who defended their multimillion-dollar request in court. Daniel C. Girard, one of five lawyers representing the plaintiffs, said the attorneys did more work than the defendant agreed to pay for and that it will be documented through time slips and other records.
"He has the right to pay close attention to the plaintiffs' fees," Girard said. "We fully expected that. And it's appropriate."
Bennett said he strongly doubts that he will approve the $3 million when a final decision is rendered May 7. Bennett said he has no problem with the rest of the settlement.
"When the public looks at these class action settlements, there is a general perception that a lot of money goes to lawyers and not enough goes to consumers," Bennett said.
Friday's hearing brought to light six months' worth of negotiations. Individuals who bought Tyson chicken products labeled as having been raised without antibiotics from mid-June 2007 through April 2009 would be entitled to refunds. That includes anyone who bought fresh, frozen or deli chicken along with Cornish hens or tenders during that time.
The settlement is broken into tiers, with the vast majority of shoppers expected to be eligible for a $10 cash refund (if they declare under penalty of perjury that they've spent more than that and can give specific details), or a $5 coupon if they claim to have bought at least one eligible Tyson product during that time.
Girard said after the hearing that he could "understand how that looks, a $5 coupon for customers and $3 million for lawyers. But no matter what we do, in these types of cases, the amount for a client will still be small."
Lawyers for the plaintiffs agreed to have their recordkeeping submitted to Bennett by mid-April. The judge said he will personally review the documents.
Bennett said that even if the lawyers can prove $3 million worth of work, that does not mean he will agree to award that amount when he renders his final decision May 7.
"There is a proportionality question here that I'm going to work to address," Bennett said.