A federal judge has rejected a $ 46.8 million settlement of Harvey Weinstein’s sexual misconduct cases, saying some of its terms are “unpleasant” and not appropriate for a class action lawsuit.
In a 20-minute hearing Tuesday, United States District Judge Alvin Hellerstein said the settlement incorrectly nullifies the claims of the non-participating parties and delegates his responsibilities as a judge to a special teacher. He also objected that Weinstein and other directors and officers of the Weinstein Co. will get millions in attorney fees.
“The idea that Harvey Weinstein can get a defense fund ahead of the plaintiffs is unpleasant,” he said. “The idea that you can regulate the claims of people who are not in the settlement, I can’t subscribe to that.”
Hellerstein had previously dismissed most claims in the class action case, and continues to believe that the plaintiffs’ experiences are so diverse that the case should not be handled as a class action.
“Not all women were captured in the same way,” said Hellerstein. “Some left their bodies due to flattery … some forcibly, and some may have done so voluntarily. And yet your agreement creates an equality.
The settlement established a complex process whereby a special teacher would evaluate each woman’s claim and assign a monetary value. But Hellerstein said such an investigation is his prerogative.
“I don’t see how I could delegate that responsibility to someone who is not a judge,” he said. “There is no way for me to approve a delegation for that suit. Zero.”
“This is not a class action,” he continued. “I will not give a preliminary approval to the agreement.”
The settlement would have used the insurance company’s funds to pay the remaining claims in the Weinstein Co. bankruptcy. Under the proposal, $ 18.9 million would have gone to the class action plaintiffs and their attorneys. Another $ 5.4 million would have been reserved for individual plaintiffs, and other funds would have gone to Weinstein Co. trade creditors and defense attorneys working for Harvey Weinstein and the other Weinstein Co. officers and directors.
Douglas Wigdor and Kevin Mintzer, who represent three plaintiffs who had opposed the settlement, said their flaws were clear from the start.
“We have been saying for more than a year and a half that the terms and conditions of the agreement were unfair and should never be imposed on survivors of sexual assault,” they said in a statement, along with attorney Bryan Arbeit. “We were surprised that the class attorney and the New York Attorney General did not recognize this fact, but we are pleased that Judge Hellerstein quickly rejected the unilateral proposal. On behalf of our clients, we hope to pursue justice against Harvey Weinstein and his many facilitators. “
Dozens of attorneys have been working on the deal for more than 18 months. The judge’s comments hit the basic foundations of the deal, and seem to leave little room for lawyers to modify the terms and re-approve it.
Weinstein Co. bankruptcy attorneys had said they hoped to get approval of the deal and confirm a liquidation plan by the end of 2020. Hellerstein’s decision is a serious setback in that process.
Paul Zumbro, the lead attorney representing the Weinstein Co. estate, issued a brief statement: “The estate is evaluating the impact of Judge Hellerstein’s ruling today.”
The decision is a defeat for Elizabeth Fegan, the attorney who handled the class action case, and the class action law firm Hagens Berman. Some of the individual plaintiffs’ attorneys alleged that the class action attorneys would get millions in fees from the case, and that the settlement had put those interests above the interests of the Weinstein prosecutors.
It is also a defeat for New York Attorney General Letitia James, whose office had filed a massive gender discrimination lawsuit against Weinstein in 2018. The settlement would also have resolved that lawsuit, and James had hailed the deal as a “victory” for all victims of sexual harassment.
“We will review the decision and determine next steps,” an office spokesman said Tuesday. “Our office has been fighting tirelessly to provide these brave women with the justice that is due to them and will continue to do so.”
The decision came as a surprise to attorneys who have been trying to resolve a dispute between Weinstein and various insurance companies. At a court hearing about an hour after Hellerstein closed the deal, some of the attorneys in that case had not yet heard the news.
“There have been numerous discussions in various circles about what to do next,” said Jeffrey Schulman, who represents Weinstein in the insurance case. “This is still pretty smooth … I think we are all going to need to sharpen our pencils and decide what to do next.”
