RIVAL CLASS COUNSEL BATTLE OVER SETTLEMENT

An unseemly squabble between rival class-action firms drew the attention of the Eleventh Circuit in Technology Training Associates, Inc. v. Buccaneers Ltd. Partnership, 2017 WL 4819371 (11th Cir. Oct. 26, 2017).  The court remanded the case for further combat over approval of an approximately $20 million class action settlement in a Telephone Consumer Protection Act case against the Tampa Bay Buccaneers, who allegedly sent out over 180,000 unsolicited faxes concerning tickets.  A class action was brought by Anderson + Wanca (“A + W”).  No settlement could be reached, and cross-motions for summary judgment were denied.

With a motion for class certification pending and millions at stake, the imperfect agency problem that plagues class actions emerged fully into view after an A + W lawyer decamped for another firm, Bock Hatch. Once there, according to internal e-mails quoted by the court, the departed lawyer allegedly proposed to his new colleagues to find another would-be class representative and settle the case out from under his former firm.  Soon thereafter, his new firm surfaced with a plaintiff and filed a second class action, followed promptly by a proposed settlement that was preliminarily approved by the district court.  In the settlement, the Buccaneers agreed to waive a statute of limitations defense regarding the second action.  Bock Hatch was to receive up to 25% of the settlement as a fee.

A + W and its clients reacted to this development by moving to intervene to object to what they characterized as a “reverse auction” settlement, but the district court denied intervention on the ground that the class was adequately represented by existing counsel, who could be eligible for a share of the settlement to cover their fees. In an opinion by Chief Judge Ed Carnes, the Eleventh Circuit vacated that order and directed that intervention of right under Fed. R. Civ. P. 24(a)(2) be permitted.  The court observed that “[i]t is plain from the record that during the negotiations the interests of the named plaintiffs and of Bock Hatch [the second firm] were aligned with those of Buccaneers and adverse to the movants’ interests.”

A related malpractice action against Bock Hatch is pending in the Middle District of Florida.

Posted by Tom Byrne.

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