Freivogel on Conflicts
 
 
 
 
Class Actions

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Comment [25] to Model Rule 1.7 provides as follows:

[25] When a lawyer represents or seeks to represent a class of plaintiffs or defendants in a class-action lawsuit, unnamed members of the class are ordinarily not considered to be clients of the lawyer for purposes of applying paragraph (a)(1) of this Rule. Thus, the lawyer does not typically need to get the consent of such a person before representing a client suing the person in an unrelated matter. Similarly, a lawyer seeking to represent an opponent in a class action does not typically need the consent of an unnamed member of the class whom the lawyer represents in an unrelated matter.

That comment was added by the ABA House of Delegates in February 2002, as part of the "Ethics 2000" project.  The comment describes the two most frequently encountered scenarios involving possible conflicts of lawyers in class actions.  Because the law involving the latter scenario seems better-settled, this discussion will start with it.

A. Class Action Plaintiffs' Lawyer Sues Member of Class in Another Action

        A lawyer is representing plaintiff classes in two separate and unrelated class actions.  In one of the actions the lawyer is suing a party who happens to be an unnamed member of the plaintiff class in the other action.  The question is, then, whether the lawyer is suing a current client.  A handful of cases say "no" and allow the lawyer to proceed.  The most recent is Tauric v. Rosas, 2011 U.S. Dist. LEXIS 72715 (E.D. Cal. July 6, 2011) (citing the aforesaid Comment [25]). Others are In re Fine Paper Antitrust Litigation, 617 F.2d 22 (3d Cir. 1980); Dean v. Kraft Foods North America, Inc., 2 004 U.S. Dist. LEXIS 5491 (E.D. Pa. March 26, 2004); Little Rock School Dist. v. Borden, 1979 WL 1626 (E.D. Ark. 1979); and In re Firestorm 1991, 22 P.3d 849 (Wash. App. 2001).  A word of caution about Fine Paper: the court dismissed the appeal because the trial court's denial of a motion to disqualify was not appealable.  But, in the opinion the court agreed with the trial court that the lawyer did not have a conflict because he did not receive information from the class member in the one case that would in any way give the lawyer an advantage in suing the class member in the other case.

        In City of San Diego v. Haas, 2012 Cal. App. LEXIS 763 (Cal. App. June 29, 2012) Kullar v. Foot Locker Retail, Inc., 2011 Cal. App. LEXIS 42 (Cal. App. Jan. 18, 2011), and Sharp v. Next Entm't Inc., 78 Cal. Rptr. 3d 37 (Cal. App. 2008), the courts held that unnamed members of a class are not clients of class counsel for conflicts purposes.

        In Lewis v. Nat'l Football League, 146 F.R.D. 5 (D.D.C. 1992), the court held that a lawyer could not be class counsel where he was adverse to ten percent of class members and there was a danger that he could learn things in this action that he could use against class members in the adverse action.

        Ft. Worth Employees’ Ret. Fund v. J.P. Morgan Chase & Co., 2014 U.S. Dist. LEXIS 139265 (S.D.N.Y. Sept. 30, 2014). Securities fraud class action. Motion to certify class. Defendants objected to Class Counsel (“CC”) because CC has filed other securities fraud actions, in which the defendants are members of the plaintiff class in this case. In this opinion the court held that CC’s other cases are not disqualifying because the other cases are not related to this case.

        Conway v. Specified Credit Ass’n.1, Inc., 2013 U.S. Dist. LEXIS 153427 (E.D. Mo. Oct. 25, 2013).  In this FDCPA case Lawyer represents the defendants.  Lawyer is handling an unrelated class action against a law firm (“the Other Case”).  Although the plaintiff in this case is an aggrieved client of that law firm and a member of the class in the Other Case, the class in the Other Case had not yet been certified.  The plaintiff moved in this case to disqualify Lawyer.  Citing Comment [25] to Missouri’s Rule 1.7 (appears to be identical to the MR Comment), the court denied the motion to disqualify.  [Note: it is hard to say what the court would have ruled had the class in the Other Case been certified.]

        NY City Op. 2004-01 approves of class counsel handling matter adverse to unnamed members of the class on matters unrelated to the class action.

        Walker v. Apple, Inc., 2016 WL 5404080 (Cal. App. Unpub. Sept. 28, 2016). Walker is a former non-exempt employee of the Carlsbad Apple store. Represented by Law Firm, she brings this class action against Apple for failure to furnish final wage statements in violation of California labor laws. Meg Karn, a manager at the Carlsbad store will be a likely witness in this case regarding Apple’s compliance with those laws. The problem is that Karn is an unnamed member of the class in another case (“Other Case”) brought by Law Firm nine months before this case. The Other Case is a wage-and-hour class action dealing with meal and rest period violations. For a time, Karn was a non-exempt employee making her a member of the class in the Other Case. Apple moved to disqualify Law Firm in this case. The trial judge granted the motion. In this opinion the appellate court affirmed. The court based its holding on the fact that Law Firm knew of Karn’s role as a manager and probable witness in this case. She did not have the usual anonymity attributed to unnamed class members and should be deemed a client of Law Firm. Thus, the likelihood that Law Firm would have to cross examine Karn in this case created the conflict.

B. Plaintiffs' Class Members Are Clients of Defense Counsel

        A class action defendant hires a law firm to represent it.  The plaintiff class has thousands of members.  Numerous of the class members are clients of the defendant's law firm on matters unrelated to the class action.  The named class representatives are not clients.  Does the fact that class members are clients mean that the lawyer is disqualified from defending the case?  We are aware of one opinion saying no disqualification, In re Rail Freight Fuel Surcharge Antitrust Litig., 2013 U.S. Dist. LEXIS 125054 (D.D.C. Sept. 3, 2013).

        One might also consider an analogy.  An electric utility asks a law firm to file an application for a rate increase with the state public utility regulatory agency.  The law firm represents hundreds of clients within the service area of the utility.  We are not aware of a single instance in which a law firm has been disqualified because it was seeking a rate increase on behalf of a public utility client.  Of course, the situation becomes more complex when a manufacturing client makes a special appearance before the agency claiming that the requested increase will put it out of business.  One might argue that the law firm may not be able to proceed. In most cases, however, the effect upon the average customer would be small.  Likewise, with many class actions.  The ultimate effect on the average class member is apt to be quite small.

        The cases under Part A above  also provide help.  For example, in Dean the court noted three factors that led to its conclusion: (1) the class members were not named parties; (2) the lawyer had received no information from the class member client that would be useful in defending the case; and (3) the court cited several cases that stood for the proposition that conflict-of-interest rules cannot be applied as rigorously in class action litigation.  All three statements apply to this Part B scenario.

        Caution, however.  Some opinions on issues relating to communication with class members characterize all the class members as having an attorney-client relationship with class counsel.  See, e.g., Fulco v. Continental Cablevision, Inc., 789 F. Supp. 45 (D. Mass. 1992); In re Shell Oil Refinery, 152 F.R.D. 526 (E.D. La. 1989); and Blanchard v. Edgemark Financial Corp., 1998 U.S. Dist. LEXIS 15420 (N.D. Ill. 1998).

        Too Much Contact with the Class Member.  Fuchs v. Schick, 2002 U.S. Dist. LEXIS 6212 (S.D.N.Y. April 10, 2002).  The Moriarty law firm sought leave to appear for the plaintiff pro hac vice.  The defendant, Schick, objected, claiming the law firm had a conflict.  The firm had earlier been class counsel in a related case, and Schick had been a member of the class.  While the opinion in this case does not say, it appears that Schick was not a named class representative.  Nevertheless, the court denied the law firm’s motion to appear for the plaintiff, noting that Schick had not been “an obscure member of a large class,” but rather had been an active participant in the earlier litigation, and had a number of communications with the Moriarty firm during that litigation.  An implication of the opinion is that if Schick had been "an obscure member of a large class," the Moriarty firm could now be adverse to Schick.

        Vermont lawyers should be aware of Vermont Op. 99-9 (undated).  The facts are not clear enough to justify discussing the opinion here.  Anyone with a class action conflicts issue in Vermont should attempt to find out more about the situation and the attitude of Vermont Bar officials.

C. Conflicts of Class Counsel During Settlement Objections

        Suppose some class members object to a proposed settlement.  Class counsel may find themselves aligned against some of their "clients" in trying to sustain or defeat the proposed settlement.  The courts are adopting more flexible rules in allowing class counsel to continue to represent some of the class members. In Lazy Oil Co. v. Witco Corp., 166 F.3d 581 (3d Cir. 1999), the court ruled that class counsel could withdraw from representing class members objecting to a settlement and continue representing the other class members.  In In Re Agent Orange Prod. Liab. Litig., 800 F.2d 14 (2d Cir. 1986), the court refused to disqualify class counsel for objecting to a settlement on behalf of just some of the class members.  To the same effect, see White v. Experian Info. Solutions, Inc., 2014 U.S. Dist. LEXIS 61433 (C.D. Cal. May 1, 2014); Larson v. Sprint Nextel, 2009 U.S. Dist. LEXIS 82014 (D.N.J. Aug. 27, 2009); In re Holocaust Victim Assets Litig., 2007 U.S. Dist. LEXIS 18339 (E.D.N.Y. March 15, 2007);  Banyai v. Mazur, 2004 U.S. Dist. LEXIS 17572 (S.D.N.Y. Sept. 1, 2004); Krugman v. Mazie Slater Katz & Freeman, LLC, 2015 WL 1880073 (N.J. App. Div. April 27, 2015); and In re Firestorm 1991, 22 P.3d 849 (Wash. App. 2001).  However, in In Re Corn Derivatives Antitrust Litig., 748 F.2d 157 (3d Cir. 1984), the court did not allow class counsel to withdraw from representing the class so that he could represent the only objector. 

        What Happens when Parties Agree that They Cannot Bring Class Action and Cannot Agree on Settlement.   The Tax Authority, Inc. v. Jackson Hewitt, Inc., 898 A.2d 512 (N.J. 2006).  This began as a suit by 154 franchisees of the defendant involving the distribution of money acquired by the defendant.  The franchise agreements provided that the plaintiffs could not seek redress through a class action.  That meant that 154 individual plaintiffs had to bring the suit.  They all had the same lawyer, Eric Karp, and signed identical engagement agreements.  As to settlement, the agreements provided that a steering committee of a few plaintiffs could negotiate a proposed settlement.  The settlement would then be submitted to all the plaintiffs for a vote.  If 60% voted in favor of the settlement, it would be binding on all the plaintiffs.  The steering committee did negotiate a settlement, but a small minority of plaintiffs refused to approve it.  Karp moved to withdraw from representing the dissenting plaintiffs.  The franchisor moved to enforce the settlement.  The trial court granted both motions, and one of the dissenting plaintiffs appealed.  The appellate court reversed the order enforcing the settlement.  The court held that the engagement agreement term providing that fewer than all the plaintiffs could bind all plaintiffs violated New Jersey’s version of Model Rule 1.8(g) (the rule dealing with aggregate settlements).  In the above cited opinion the New Jersey Supreme Court held that the prohibition would be prospective.

        Following are authorities on counsels' communications with class members: ABA Op. 07-445 (2007); Pa. Op. 2009-01; Pa. Op. 2006-06; Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981); Dondore v. NGK Metals Corp., 152 F. Supp. 2d 662 (E.D. Pa. 2001); Parris v. Superior Court, 135 Cal. Rptr. 2d 90 (Cal. App. 2003); Braun v. Wal-Mart Stores Inc., 2003 Pa. Dist. & Cnty. Dec. LEXIS 219 (Ct. Common Pl. Jan. 15, 2003).

        Treatise.  Hazard, Hodes, & Jarvis § 11.12.

        Restatement, § 14, cmt. f.

        Law Reviews.  Richard G. Stuhan & Sean P. Costello, Robbing Peter to Pay Paul: The Conflict of Interest Problem in Sibling Class Actions, 21 Geo. J. Legal Ethics 1995 (2008); Northway, Non-Traditional Class Action Financing and Traditional Rules of Ethics: Time for a Compromise, 14 Geo. J. Legal Ethics 241 (2000); Gregg H. Curry, Conflicts of Interests Problems for Lawyers Representing a Class in a Class Action Lawsuit, 24 J. Legal Prof. 397 (1999/2000); David Brainerd Parish, Comment, The Dilemma: Simultaneous Negotiation of Attorneys' Fees and Settlement in Class Actions, 36 Hous. L. Rev. 531 (1999); Genine C. Swanzey, Using Class Actions to Litigate Mass Torts: Is there Justice for the Individual?, 11 Geo. J. Legal Ethics 421 (1998); Samuel Issacharoff, Class Action Conflicts, 30 U.C. Davis L. Rev. 805 (1997); Sylvia R. Lazos, Note, Abuse in Plaintiff Class Action Settlement Negotiations, 84 Mich. L. Rev. 308 (1985); Arthur Miller, Of Frankenstein Monsters and Shining Knights, Myth, Reality and the Class Action Problem, 92 Harv. L. Rev. 664 (1979); Rhode, Class Conflicts in Class Actions, 34 Stan. L. Rev. 1183 (1982); Note, Scott, Don't forget Me!  The Client in a Class Action Lawsuit, 15 Geo. J. Legal Ethics 561 (2002); Geoffrey P. Miller, Conflicts of Interest in Class Action Litigation: An Inquiry Into the Appropriate Standard, 2003 U. Chi. Legal F. 581 (2003); Bruce A. Green, Conflicts of Interest in Litigation: The Judicial Role, 65 Fordham L.Rev. 71, 127 (1996); Nick Landsman-Roos, Front-End Fiduciaries: Precertification Duties and Class Conflict, 65 Stanford L. Rev. 817 (April 2013) (several references to conflicts of interest).

D. Miscellaneous Other Class Action Cases and Opinions

        Re Metlife Demutualization Litig., 229 F.R.D. 369 (E.D.N.Y. 2005).  While the propriety of acting as class counsel and, at the same time, class representative was not the issue in this case, the concept and holdings regarding it are discussed.

         Class Counsel's Fees Reduced $6 Million Because of Conflict.  Allapattah Services, Inc. v. Exxon Corp., 454 F. Supp. 2d 1185 (S.D. Fla. 2006).  This is the class action in which the court, in this opinion, awarded a Miami law firm $247 million for its work as lead class counsel.  Not so well known is the fact that the court in this same opinion reduced another lawyer’s fee from $21 million to $15 million because the lawyer had an undisclosed conflict of interest.  The conflict was that during the litigation the lawyer borrowed $400,000 from one of the class representatives.  The lawyer also had a fee splitting agreement with that same class representative.  It provided that the lawyer would pay the representative the lesser of $13 million or one half of the lawyer’s fee.  On top of that, the class representative had sued the lawyer in Virginia and obtained a $13 million judgment against the lawyer.  Neither of them disclosed any of this to the court, the other class representatives, or to other class counsel.  One way the court found the conflict manifested itself was that the lawyer and class representative had attempted to replace lead counsel.  This would have enhanced their mutual recovery.

       Davis v. Kraft Foods North Amer., 2006 U.S. Dist. LEXIS 3512 (E.D. Pa. Jan. 31, 2006).  Law Firm represented Davis, the named plaintiff, in this class action, race discrimination case.  Davis claimed, among other things, that Kraft discriminated against African Americans in employee disciplinary cases.  Opposing the motion to certify the class, Kraft claimed that Law Firm had a conflict of interest, arising out of Law Firm’s representation of Dean in a separate discrimination case against Kraft.  The problem was that Dean, Kraft’s former Employee Relations Manager, during the time frame involved in this case, was involved in investigating employee conduct and participating in disciplinary decisions.  That meant, according to the court, that Law Firm might have had to attack Dean’s actions in this case.  The court held that Law Firm was barred from representing the class in this case by Pennsylvania’s version of Model Rule 1.7(a)(2) (the “punch-pulling” provision).  The court held that even though Davis, the class-representative, waived the conflict, she could not waive it for the class.

       For Malpractice Purposes, Unnamed Class Member not a Client of Class Counsel until Class Certified.  Schick v. Berg, 430 F.3d 112 (2d Cir. 2005).  This is a legal malpractice case brought by Schick against Berg.  The trial court granted summary judgment for Berg, and the Second Circuit affirmed.  Both courts held that Schick was never a client of Berg, and, thus, had no standing to sue Berg.  Berg had been class counsel in a Texas case.  Schick was an unnamed member of the class.  In this opinion the court held that under Texas law, Schick was not a client of class counsel until the class was certified.  The notice of settlement to the class said that members of the class who are represented by separate counsel, which Schick was, do not become clients of class counsel upon certification of the class.

        State ex rel. Union Planters Bank, N.A. v. Kendrick, 142 S.W.3d 729 (Mo. 2004).  This is a class action arising from a bond offering gone bad.  Several of the brokers involved, who were potential defendants, hired lawyer X to bring a class action on behalf of the investors and advanced funds to X for this purpose.  There was a tacit understanding that X would not sue those particular brokers.  Only after X was retained did X find class representatives.  The trial court certified the class.  Pursuant to a writ of prohibition the Missouri Supreme Court ordered that X should be removed as class counsel, because of his conflict of interest.      

        Boyle v. Giral, 820 A.2d 561 (D.C. App. 2003).  This is a class action against various vitamin-related products manufacturers for price-fixing and market-allocation.  There are two classes: commercial purchasers and consumers.  The proposed settlement has half the settlement going to commercial purchasers in cash payments.  The other half of the settlement is for consumers.  However, the consumers will take nothing in cash.  Rather, the consumers’ portion will go to a fund for the promotion of nutrition education in the District of Columbia.  (A cash distribution would have amounted to approximately $1.00 for each resident of D.C.)  This is sometimes referred to as a “cy pres” distribution.  Intervenors objected to the settlement in part because class counsel had a conflict of interest in representing both the commercial class and the consumer class.  The court disagreed and approved the settlement.

        Krim v. pcOrder.com, Inc., 210 F.R.D. 581 (W.D. Tex. 2002).  Milberg Weiss attempted to be class counsel in this action.  The court denied them that status, because (1) they had not informed the class representatives that they represented other classes in other courts against the same defendants, and (2) because of the possibility that defendants may not be able to satisfy all the claims (in essence, a “zero sum” argument).  Milberg Weiss attempted to counter the latter argument by noting that the court could supervise the allocation of any settlement or award.  (At the “Zero Sum Games” page of this site are cases in which the court felt its supervisory power removed the zero sum objection.)  The court in this case countered by noting that it would not have control over the courts in which the other cases against these defendants are pending.

        In re BankAmerica Corp. Securities Litig., 228 F. Supp. 2d 1061 (E.D. Mo. 2002).  The court denied fees to lawyers who had represented named parties in objecting to a settlement.  The court noted that it had approved the settlement and that the objectors’ opposition did not result in a greater recovery for class members.  The court also noted that one of the named objectors was a partner in the law firm claiming the fees, stating that this was a potential conflict of interest

       Zylstra v. Safeway Stores, Inc., 578 F.2d 102 (5th Cir. 1978).  The court held that a class member, or a close relative of a class member, could not be class counsel.

        Jacobs v. Citibank, N.A., 2003 U.S. Dist. LEXIS 2880 (S.D.N.Y. Feb. 26, 2003).  The court held that a lawyer could not be a class representative and lawyer for the class.  The court based its decision upon the conflict facing a lawyer who might want to negotiate a higher fee at the expense of the other class members.

        Where Lawyer is Named Plaintiff, His Law Firm cannot be Class Counsel.  Jacobs v. Citibank, N.A., 2003 U.S. Dist. LEXIS 2880 (S.D.N.Y. Feb. 26, 2003); Apple Computer, Inc. v. Superior Court, 24 Cal. Rptr. 3d 818 (Cal. App. 2005); Karn v. Quick & Reilly Inc., 912 A.2d 329 (Pa. App. 2006) .

        Class Counsel Can Be Class Representative – at Least Temporarily.  Best Buy Stores, L.P. v. Superior Court, 40 Cal. Rptr. 3d 575 (Cal. App. March 13, 2006), rev. denied, 2006 Cal. LEXIS 8504 (Cal. July 12, 2006).

        Class Representative and Class Counsel Can Be Good Friends.  In re Currency Conversion Fee Antitrust Litigation, 2004 U.S. Dist. LEXIS 24134 (S.D.N.Y. Dec. 2, 2004).  The court held that the fact that the class representative and class counsel are close friends is not, standing alone, grounds for not certifying the class.

        Sipper v. Capital One Bank, 2002 U.S. Dist. LEXIS 3881 (C.D. Cal. 2002). This is a suit brought by credit card customers of a bank claiming that the bank did not credit payments correctly.  Sipper sought to be class representative, and Kramer sought to be class counsel.  After the hearing on the motion to certify the class, the court said:

Sipper and Kramer are business partners in a series of real estate deals. . . . Kramer is the "money-man" and Sipper is the public front for these deals. . . . According to Sipper, he depends on Kramer for his involvement in these deals because Kramer supplies the money. . . . Not only are Kramer and Sipper business partners, they have been joint defendants in a California lawsuit. . . .

The court also noted that these relationships had not been disclosed voluntarily by the plaintiffs.  As a result, the court refused to certify the class.

       Gates v. Cook, 234 F.3d 221 (5th Cir. 2000).  A lawyer represented the general prison population in Mississippi in at least one class action.  He also represented a class of HIV-positive prisoners in an action to win them more of the privileges of the prison population at large.  A number of members of the latter class sought to have the lawyer replaced.  The court said, in part, as follows:

The allegation of a conflict of interest is not self-evident; there is no necessary or inherent conflict between the objectives of the HIV-positive subclass and that of the general population. However, Welch explained to the class in responding to complaints about his inaction that he refrained from taking aggressive action on their desegregation claims in part because he feared the general population would object to it. We therefore have a direct admission by counsel that his advocacy was in fact impaired, at least at one time and as to one set of issues. That admission erases any doubt that would otherwise exist regarding conflict of interest difficulties faced by counsel.

        In re Auction Houses Antitrust Litigation, 197 F.R.D. 71 (S.D.N.Y. 2000).  This was an antitrust class action against Sotheby's and Christie's.  In this opinion the court explains the auction method of selecting class counsel, and explains how some fee arrangements create conflicts of interest between counsel and members of the class.  In re Auction Houses Antitrust Litig., 2001 U.S. Dist. 1713 (S.D.N.Y. 2001).  Same case.  In this opinion the court approves the settlement.  Much of the settlement was to be paid in cash.  A portion was to paid in the form of discount certificates.  The court said that a settlement consisting of discount certificates creates the potential for class counsel to have a conflict of interest.  The court said this is not such a case because much of the settlement was to be paid in cash, and because the certificates have a discernible market value.

        Blitzer v. Comdisco, Inc., 2001 U.S. Dist. LEXIS 3764 (N.D. Ill. 2001).  Securities class action.  Judge Shadur ordered nine cases pending elsewhere in the Northern District of Illinois to be reassigned to him.  He already had three nearly identical cases before him, including the case with the lowest number of the twelve.  In the Memorandum Order Judge Shadur also indicated that he might choose counsel for the class via a bidding process.  He ordered all counsel not to discuss their fee arrangements with each other, until further order.  In his last paragraph on that subject the court said:

It is recognized that certain law firms are reflected as co-counsel in more than one of the cases in this group. In order to preserve the integrity of a bidding procedure if one were to be adopted, while at the same time avoiding conflict of interest situations for such law firms, until further order of this Court the members of those firms are ordered not to discuss the subject of any prospective fee arrangements in any of the cases in which they are acting as co-counsel.

        D.C. Op. 301 (June 22, 2000).  A law firm represents a class of 3,000 special education students against D.C. They are seeking better transportation and other benefits to which they believe they are entitled.  A member of the class was injured on his way to school, and the issue is whether the law firm can represent him in a damage case against D.C. because of its unsafe transportation services.  Analyzing the case under D.C.'s unique version of Model Rule 1.7, the Committee opined that the law firm could take the case.  Moreover, the Committee opined that the likelihood of a conflict between the class and the individual student was so remote, the law firm would not need anyone's consent.  The Committee distinguished the situation where a law firm might be representing two different plaintiffs against the same defendant or fund, where the success of one plaintiff might affect the recovery of the other.  It cited North Carolina State Bar v. Whitted, 347 S.E.2d 60 (N.C. App. 1986), where a lawyer was disciplined for doing just that.  The Committee also cited Fiandaca v. Cunningham, 827 F.2d 825 (1st Cir. 1987), in which the court held that a law firm had a conflict where the relief  it was seeking in two different class actions might cause one class to benefit at the expense of the other.

        Frank v. Fleck, 101 Wn. App. 1006 (Wash. App., Div. 1, June 5, 2000). Malpractice action against lawyer for class. The former clients claimed that the lawyer had a conflict of interest because he recommended that they proceed as a class. They claimed that they could have done better without a class action. The court affirmed a summary judgment for the lawyer. The court ruled that the former clients’ expert did not specify adequately how they were harmed.

       In re Mego Financial Corp. Securities Litig., 213 F.3d 454 (9th Cir. 2000). Court approved a settlement notwithstanding allegations that class counsel had a conflict of interest. Class counsel was representing several classes of securities holders. The court found that the fact that one class benefited more from the settlement than another was not, alone, a basis for denial of the settlement:

As already mentioned, when Pathman [class representative and member of law firm] initially filed this would-be class action, he hired his own law firm as counsel. Pathman's firm then represented him during the approximately two years of litigation that preceded the filing of the motion for class certification. While Pathman ultimately obtained new counsel, TGA asserts that the bill for Pathman's firm's services exceeds $ 200,000 and that Pathman's stake, as a partner, in these legal fees precludes a finding that he is an adequate class representative. We agree that Pathman's status as a shareholder in a firm that is owed more than $ 200,000 in fees could create a conflict of interest. During oral argument in this case, Pathman expressly waived the right to any fees for legal work previously performed by himself and Pathman Lewis, LLP. We find that such waiver cures any potential conflict of interest.

        Hansen v. Landaker, 2000 Ohio App. LEXIS 5674 (Ohio App. 2000).  Court approved the class's law firm even though it had earlier represented an entity that had become a third-party defendant in the class action.  The court relied, in part, upon a similarly lenient decision in  Healy v. Loeb Rhoades & Co. 99 F.R.D. 540 (N.D. Ill. 1983).

       Dollens v. Zionts, 2001 U.S. Dist. LEXIS 19966 (N.D. Ill. 2001).  The issue was whether a law firm could be lead counsel for plaintiffs in a derivative action when they had represented plaintiffs in a class action involving the same matters.  The court said that they could.

        In re Continental Illinois Securities Litigation, 750 F. Supp. 868 (N.D. Ill. 1990).  In an opinion on fees the court noted that it had ruled six years earlier that the same lawyers could not represent plaintiffs in both a derivative action and a class action, particularly with respect to settlement, because the funds available to pay both were "limited."

       Class Counsel Member of Class; N.D. "Exception."  Bice v. Petro-Hunt, LLC, 681 N.W.2d 74 (N.D. 2004).  Motion to certify class.  Class counsel is a member of the class, as are his parents, his ex-wife, and members of his ex-wife’s family.  Defendant claimed that class counsel had a conflict of interest.  The court held that the situation was “troubling” and that class counsel had a “potential” conflict.  However, the court held that class counsel could stay in the case because the North Dakota class action rules were more protective of class members than federal rules.

        Fees: Clear-Sailing Agreements.  Stokes v. Saga Int’l. Holidays, Ltd., 376 F. Supp. 2d 86 (D. Mass. 2005).  In this class action opinion the court approved plaintiffs’ counsels’ petition for fees.  The petition was unopposed because the fees were the subject of a “clear sailing” agreement.  A “clear sailing” agreement provides that the defendant will not oppose the application for fees as long as it does not exceed a stated amount, here $350,000.  While the court did not find a conflict of interest, it warned that “clear sailing” agreements increase the risk of a conflict of interest, because there is no one to object to the fees.  Thus, the court said, courts have a greater duty to police such agreements.  For a similar approach to “clear sailing” agreements, see Lagarde v. Support.com, Inc., 2013 U.S. Dist. LEXIS 42725 (N.D. Cal. March 26, 2013); Consumer Privacy Cases, 2009 Cal. App. LEXIS 1067 (Cal. App. June 30, 2009).  In Hege v. Aegon USA, LLC, 2011 U.S. Dist. LEXIS 6109 (D.S.C. Jan. 21, 2011), the court found, under the circumstances of that case, that a “clear sailing” agreement in another case was part of the reason the other case did not have a preclusive effect in this case.

        Trombley v. Bank of Am. Corp., 2012 U.S. Dist. LEXIS 63072 (D.R.I. May 4, 2012).  Because, in part, of the lopsided difference between the funds to be paid to class members and class counsel's fees, the court refused to approve a settlement.  The agreement contained a "clear sailing" provision, which said that the defendant would not challenge class counsel's fees under certain circumstances.  The court noted that "clear sailing" agreements require courts to examine settlement agreements with "careful scrutiny."

        Nat. Air Traffic Controllers Ass’n. v. Dental Plans, Inc., 2006 U.S. Dist. LEXIS 12544 (N.D. Ga. March 10, 2006).  In this class action, Law Firm represented members of NATCA who were claiming benefits under a dental plan arranged between NATCA and the defendants.  Because Law Firm also represented NATCA, and because NATCA had potential liability to the plaintiffs, the court found that Law Firm had a conflict of interest and refused to certify the class.

        Hernandez v. Chase Bank USA, N.A., 2006 U.S. Dist. LEXIS 93044 (N.D. Ill. Dec. 21, 2006).  Motion to certify class; adequacy of representation.  Defendants claimed the class representative had a conflict of interest with his law firm because he had signed an agreement to pay “all legal fees and costs” if he abandoned this action.  The magistrate judge held that this was not a conflict.

         Nowak v. Ford Motor Co., 240 F.R.D. 355 (E.D. Mich. 2006) .  The conflicts issue was whether a law firm could be lead counsel in a case against Co. A, while at the same time being lead counsel in a class action against a former subsidiary of Co. A.  Stated another way, could the firm’s role in this case impair the former subsidiary’s ability to respond in the other case, or vice versa?  The court noted that Co. A had several contingent liabilities arising out of the sale of the subsidiary, but found that none of them was relevant to the selection of lead counsel in this case.  So, the court approved the appointment.  The magistrate judge noted that the court in In re Cardinal Health, Inc. ERISA Litig., 225 F.R.D. 552 (S.D. Ohio 2005), reached a different result under similar facts, but found that the reasoning in Cardinal Health was “incomplete and overly cautious.”

        Koehler v. Brody, 483 F.3d 590 (8th Cir. 2007) .  In a class action one of the lead plaintiffs objected to the settlement.  The trial court overruled the objection, and, on appeal (not this case), the Eighth Circuit affirmed.  Koehler then sued the lawyers (this case) for the class for breach of fiduciary duty, aiding and abetting fraud, and similar theories.  The trial judge granted a motion to dismiss, and, in this opinion, the Eighth Circuit affirmed.  The court held that Koehler was collaterally estopped from suing the lawyers because the approval of the settlement in the earlier case was tantamount to holding that the lawyers for the class had acted properly.

        Abrams v. Sachnoff & Weaver, Ltd., 2007 Del. LEXIS 158 (Del. April 4, 2007).  Abrams is seeking to recover a portion of the fee earned by Law Firm as class counsel.  Abrams’ wife was the original class representative.  Upon her death Abrams became class representative.  Both the trial court and the Delaware Supreme Court (in this opinion) held that an agreement to share the fee would be unenforceable because in Delaware it is a conflict for a lawyer for the class to also be class representative or to be married to a class representative.

        Yip v. Zia, 2007 Cal. App. Unpub. LEXIS 3243 (Cal. App. April 24, 2007).  The only point worth making about this unpublished opinion is that an appellate court can reverse a trial court’s approval of a derivative action if the plaintiff had a serious enough conflict of interest in the trial court. 

         Mowry v. JP Morgan Chase Bank, 2007 U.S. Dist. LEXIS 44222 (N.D. Ill. June 19, 2007).  Named Plaintiff No. 1 was the brother of class counsel.  Because of that relationship, the court held that Plaintiff No. 1 was not an adequate representative of the class.  Named Plaintiff No. 2 was the “roommate” of Named Plaintiff No. 1 and was also a friend of class counsel.  Because of those relationships, the court held that Named Plaintiff No. 2 was not an adequate representative of the class.

        ABA Op. 07-445 (April 11, 2007).  The ABA Standing Committee on Ethics and Professional Responsibility has laid down guidelines for when counsel in class actions may contact potential members of the class.  The Committee’s summary of the opinion follows:

Before a class action has been certified, counsel for plaintiff and defense have interests in contacting putative members of the class.  Model Rules of Professional Conduct 4.2 and 7.3 do not generally prohibit counsel for either plaintiff or defendant from communicating with persons who may in the future become members of the class.  Both plaintiff’s and defense counsel must nevertheless comply with Model Rule 4.3.

        Law Firm could not Represent both Corporation and Majority Shareholder.  Jellema v. American Bullion Minerals Ltd., 2007 BCSC 1150 (CanLII) ( S. Ct. of Brit. Col. Aug. 1, 2007).  This is a suit by minority shareholders of Corp., intended to be a class action, to prevent the sale of property of Corp. to the majority shareholder at a price allegedly below market value.  Law Firm attempted to represent the majority shareholder as well as Corp.  The minority shareholders objected and sought Law Firm’s disqualification.  A judge of the B.C. Supreme Court agreed and ordered that Law Firm cease representing Corp.  The court further ordered that Law Firm could continue on behalf of the majority shareholder because Law Firm had not been involved in the underlying transactions.

       Interests of Class Representatives Do not have to Be Identical to Interests of Absent Class Members.   Williams v. LexisNexis Risk Mgm’t. Inc., 2007 U.S. Dist. LEXIS 62193 (E.D. Va. Aug. 23, 2007).  This is a class action filed under the federal Fair Credit Reporting Act (“FCRA“).  The defendants opposed class certification in part because the class representatives and the class lawyers had conflicts of interest with absent members of the class.  This is because the class lawyers were representing the class representatives in individual actions against the defendants under a provision of the FCRA (Section 1681e(b)) not appropriate for class treatment.  The court disagreed with the defendants’ conflict claim saying that the interests of the class representatives do not have to be identical to those of the absent class members, just coextensive.

        Representing Supervisory and Non-Supervisory Employees in Same Action.  Blackwell v. Skywest Airlines, Inc., 245 F.R.D. 453 (S.D. Cal. 2007).  Motion to certify class.  The court held that, in the circumstances of this case, a law firm could represent a class that comprised both supervisory and non-supervisory employees.  The court denied certification on other bases.

        Representing Former Employees and Their Union.  Bailey v. AK Steel Corp., 2008 U.S. Dist. LEXIS 5751 (S.D. Ohio Jan. 14, 2008).  This is a class action brought by former employees of the defendant to prevent defendant from cutting off their health benefits.  Interveners objected to the fact that class counsel also represented the former employees’ union, claiming that was a conflict of interest.  In this opinion the magistrate judge found no conflict.

        In-House Lawyer as Class Representative in Case against Employer.  Schaefer v. General Electric Co., 2008 U.S. Dist. LEXIS 5552 (D. Conn. Jan. 22, 2008).  This is a sex discrimination class action.  The plaintiff and class representative is a woman and a lawyer employed by defendant GE.  GE moved to strike the class allegations because the plaintiff’s role as lawyer for GE puts her in a position to violate her duty of confidentiality as a lawyer  and puts her in a conflict of interest.  In this opinion the district judge denied GE’s motion.  [Note: the case is young, and much could change.  But, this opinion is an exhaustive discussion of the tricky concept of an in-house lawyer as a plaintiff against her employer, including issues of confidentiality and conflicts of interest.]

        Bringing in Other Counsel Cure's Class Counsel's Conflict.  East Maine Baptist Church v. Regions Bank, 2008 U.S. Dist. LEXIS 7234 (E.D. Mo. Jan. 31, 2008).  Class counsel had a former-client conflict as to a group of defendants.  In this opinion the court said that the conflict was cured by bringing in independent class counsel to act as to those defendants.

        Bame v. Dillard, 2008 U.S. Dist. LEXIS 40805 (D.D.C. May 22, 2008).  In this class action the plaintiffs were men picked up during a mass demonstration in D.C. and strip searched for no apparent reason, in violation of the Fourth Amendment.  The defendants objected to class certification in part because the plaintiffs’ lawyer had previously represented women against the same defendants.  The court overruled that objection because there was nothing about this action that contradicted the women’s claims in the earlier action.  This action was about the defendants’ unconstitutional treatment of one group of men on one day, while the women’s action involved claims of longstanding discrimination against women.

         Sharp v. Next Entertainment, Inc., 2008 Cal. App. LEXIS 798 (Cal. App. May 28, 2008).  Law Firm represented a labor union  (“Guild”) on a variety of matters over a number of years.  Guild believed that many of its members were subject to violations of California employment laws by their employers.  Guild encouraged a number of its members to be class representatives (“Plaintiffs”) in two related class actions, including this case, alleging these violations.  Guild recommended that the Plaintiffs retain Law Firm to be class counsel, which the Plaintiffs did.  Guild agreed to pay Law Firm’s fees.  Law Firm had Plaintiffs and Guild sign conflict waivers, which explained Law Firm’s relationship with Guild and laid out guidelines that provided, among other things, that Plaintiffs, and not Guild, would control the litigation.  Prior to class certification, Defendants, Plaintiffs’ employers, moved to disqualify Law Firm.  The trial court denied the motion.  In this opinion, the appellate court affirmed.  First, the court ruled that the conflict waivers signed by the Plaintiffs and Guild were adequate to cure any conflict.  Second, the court rejected Defendants’ argument that for the waivers to be effective they would have to be signed by all putative class members.  The court said that objecting putative class members could opt out of the class after class certification.  [Note: for those who believe that California courts are insular, or that California ethics rules are unique, it is significant that the appellate court cited, among other things, Comment [25] to ABA Model Rule 1.7, sections in the Restatement, parts of Hazard, Hodes & Jarvis, and at least one New York federal court decision.]

        Mark v. Spencer, 2008 Cal. App. LEXIS 1343 (Cal. App. Aug. 22, 2008).  Prior to commencement of an earlier class action, Spencer and Mark entered into an agreement to split the lawyers' fees evenly.  They did not inform the class action judge of the agreement.  The judge awarded Spencer more fees than Mark.  In this action Mark is suing Spencer for an award to make the fees the same.  In this opinion the appellate court affirmed the trial court's dismissal of the action.  The first reason was that not notifying the class action judge of the fee-splitting agreement violated California Court Rule 3.769.  The second reason was that the class action judge's award of fees was res judicata over this action.

        Eichenholtz v. Verifone Holdings, Inc., 2008 U.S. Dist. LEXIS 64633 (N.D. Cal. Aug. 22, 2008).  This is a securities class action.  95% of the opinion deals with the extent to which a "group" of class members can qualify as class representative under PSLRA.  Several competing plaintiffs objected to one of the proposed class representatives because its general counsel (a law firm) in other actions had acted as class counsel while also being general counsel of the class representative.  Both the competing plaintiffs and the court seemed to assume (but, citing no authority) that this dual role was a conflict of interest, because, in effect, the class representative and class counsel were the same.  The court brushed aside the objection because it was apparent that a different law firm (not the class representative's general counsel) was to represent the class in this case.

        Lee v. City of Columbus, 2008 U.S. Dist. LEXIS 64771(S.D. Ohio Aug. 22, 2008).  This is a suit by City employees against City for its enforcement of medical disclosure requirements.  In this opinion the district judge granted the motion for class certification.  However, the court ordered that the class definition exclude those putative class members who are named defendants.  This, according to the court, is because class counsel could not represent the class (and its members) where they were suing these "clients" as defendants.

       Gutierrez v. Wells Fargo Bank, N.A., 2008 U.S. Dist. LEXIS 70124 (N.D. Cal. Sept. 11, 2008).  In certifying a class the court ruled, in this opinion, that the class representative could be married to the assistant of class counsel.  The court held that the claim that the class representative would favor an inadequate settlement to maximize fees to class counsel was "too attenuated."

        Coe v. Northern Pipe Products, Inc., 2008 U.S. Dist. LEXIS 102387 (N.D. Ia. Dec. 2, 2008).  This is an employment discrimination case.  Disqualification was not an issue.  Nevertheless, when discussing the difference between a "mixed motives" claim and a "but for" claim, the court made the following interesting observation:

Indeed, this court has often wondered if plaintiffs' lawyers explain these realities to plaintiffs and let them decide whether to pursue a "but for" or "mixed motive" claim or both. If an attorney does not make such a full disclosure that allows the plaintiff personally to decide which claim or claims to pursue, this court suggests that there may be a conflict of interest between the lawyer and the client. After all, there are some cases in which it is to the plaintiff's lawyer's advantage to pursue a "mixed motives" claim, which would provide compensation to the lawyer, but it would not be to the plaintiff's advantage to do so, because the plaintiff might recover nothing, and vice versa.
   
        CE Design v. Beaty Construction, Inc., 2009 U.S. Dist LEXIS 5842 (N.D. Ill. Jan. 26, 2009).  This is a class action brought under the Telephone Consumer Protection Act.  In opposing the motion to certify the class, the defendant claimed that the lawyer for the named plaintiff and proposed class representative should not be class counsel because the lawyer had a close relationship with the plaintiff.  The lawyer had represented the plaintiff on several occasions although the court noted that the plaintiff is now using another law firm.  In any event, the court, in this opinion, overruled the defendant's objection.

        Dank v. Sears Holding Mgm't Corp., 2009 N.Y. App. Div. LEXIS 1248 (N.Y. App. Div. Feb. 17, 2009).  The court denied a motion to certify a class, in part because the class representative wanted also to be class counsel ("inherent conflict of interest").  (The court also said he failed to establish numerosity or establish that he had the financial resources and professional qualifications to to undertake a class action.)

        Advance Agreement for Incentive Awards Are not Valid.  Rodriguez v. West Publishing Corp., 2009 U.S. App. LEXIS 8680 (9th Cir. Apr. 23, 2009).  Certain named plaintiffs entered into retainer agreements with class counsel that obligated class counsel to apply for incentive awards for the named plaintiffs.  Under those agreements the amounts sought would be tied to the size of the settlement.  These incentive agreements were not disclosed to the court or to the class prior to class certification.  When class counsel applied for incentive awards for the named plaintiffs, the trial court denied the applications.  The court held that the incentive agreements constituted a conflict of interest for the class representatives and for class counsel and were invalid.  In this opinion the Ninth Circuit agreed.  The court noted that incentive awards to class representatives can be appropriate, but not advance agreements with counsel to seek them.

        “Monitoring” Plus.  Iron Workers Local No. 25 Pension Fund v. Merrill Lynch & Co. Inc., 2009 U.S. Dist. LEXIS 44821 (S.D.N.Y. May 27, 2009).  Two pension funds were competing to become class representative in this securities fraud case.  In each case the fund had retained law firms to "monitor" their investments, with the likely result that if the firm recommended that the fund sue, the fund would retain the firm, on a contingent fee basis, as lead class counsel.  In this fact-intensive analysis, the court picked one of the funds over the other.  The court, among other things, discussed the extent to which these monitoring arrangements were, or were not, inconsistent with Congress' goals in passing the PSLRA.  A very similar result occurred in In re General Electric Sec. Litig., 2009 U.S. Dist. LEXIS 69133 (S.D.N.Y. Jul. 29, 2009).

        Another Monitoring Case. Burges v. Bancorpsouth, Inc., 2017 WL 2772122 (M.D. Tenn. June 26, 2017). Securities class action. Law Firm seeking to be class counsel had earlier entered into a monitoring agreement with lead plaintiff. Because that agreement did not require the plaintiff to hire Law Firm to bring any ensuing action, there was no conflict of interest. Thus, Law Firm passed the adequacy requirement for class certification.

        Drimmer v. WD-40 Co., 2009 U.S. App. LEXIS 18667 (9th Cir. Aug. 19, 2009).  The trial court denied class certification.  One basis was that the plaintiff would not be an adequate class representative.  The plaintiff and proposed class counsel worked together, the lawyer was the plaintiff's landlord, and the plaintiff had an "inexplicable disinterest in pursuing all remedies available to him."  In this opinion the appellate court ruled that the trial court's ruling was not an abuse of discretion.

        No per se Rule against handling “Sibling Class Actions.”  Larson v. Sprint Nextel, 2009 U.S. Dist. LEXIS 82014 (D.N.J. Aug. 27, 2009).

        In re Static Random Access Memory (SRAM) Litig., 2009 U.S. Dist. LEXIS 110407 (N.D. Cal. Nov. 25, 2009).  In certifying a class, the court reiterated the truism that "potential conflicts" of counsel are insufficient to deny certification.  More particularly, the court was not troubled that one of the class representatives was the uncle of one of the class counsel, or that some of the representatives see class counsel socially, or that some of the representatives "had prior business dealings" with some of class counsel.

        Nakamura v. Countrywide Home Loans, Inc., 2010 Haw. App. LEXIS 35 (Haw. App. Feb. 8, 2010).  Class action.  In this opinion the court certified a class although the class representative was the sister of a named partner in one of the law firms representing the class.  The court noted, but did not discuss the significance of, the fact that the brother had no involvement in the case.

        Rodriguez v. West Publishing Corp., No. CV 05-3222 R(MCx) (C.D. Cal. Feb. 3, 2010).  In this brief order the trial court ruled that class counsel should not receive fees because of the following conduct:

[Class Counsel] entered into incentive agreements with five of the named plaintiffs, obligating the firm to seek payment for each of the five in amounts that hinged on the size of the settlement or a verdict secured on behalf of the Class.  This arrangement was not disclosed to the Class, nor did [Class Counsel] inform the Court of its existence during the class certification stage.
   
        In re American Investors Life Ins. Co., 2010 U.S. Dist. LEXIS 1712 (E.D. Pa. Feb. 23, 2010).  This is a proceeding arising out of the district court's order certifying of a class and approving a settlement.  A class member who had objected to the settlement appealed from that order.  Most of this opinion dealt with what, if any, bond the objecting class member should post.  One issue had to do with the fact that the law firm representing the objecting class member also was representing 39 opt outs.  The court said that that combination of representations was not an impermissible conflict.

        Jaffe v. Capital One Bank, 2010 U.S. Dist. LEXIS 18117 (S.D.N.Y. March 1, 2010).  In this opinion the court granted motions to dismiss.  Among other things the court ruled that a pro se plaintiff, who is a lawyer, cannot be class representative and class counsel.

        Member Steering Committee.  In re Plasma-Derivative Protein Therapies Antitrust Litig., 2010 U.S. Dist. LEXIS 34882 (N.D. Ill. April 7, 2010).  Medical Center filed this antitrust action against drug manufacturers, in Philadelphia.  It involves prices charged for drugs.  It was consolidated for discovery in the Northern District of Illinois by the federal multidistrict panel.  Law Firm sought appointment to the Plaintiffs' Steering Committee.  Medical Center objected because Law Firm was handling an action in Detroit against Medical Center involving nurses' wages.  In this opinion the court overruled the objection and appointed Law Firm to the steering committee.  The court held that although this situation is different from those in which courts have held that class counsel could be adverse to absent class members, Medical Center could not show how appointment of Law Firm would prejudice it.

        Seijas v. Republic of Argentina, 2010 U.S. App. LEXIS 10807 (2d Cir. May 27, 2010).  This is a class action brought by holders of defaulted Argentine bonds.  The trial court certified eight classes of holders and entered aggregate judgments in favor of all eight.  This opinion deals with Argentina's appeal of the class certification and the judgments.  As to class certification, Argentina argued that the law firm representing all eight classes had a conflict of interest because, essentially, all the members of the classes would be pursuing the same assets.  In affirming the trial court, the Second Circuit held that there was no conflict in the liability phase of the proceedings and that it was confident that the trial court would properly manage any conflicts during the damages phase.

        In re Dell Inc. Securities Litig., 2010 U.S. Dist. LEXIS 58281 (W.D. Tex. June 11, 2010).  Motion for certification of the class and approval of settlement agreement.  The original proposal had a de minimis provision limiting recovery to those members of the class suffering from a loss of $10 or more.  The court approved removal of the de minimis provision, noting that allowing it to remain would put class counsel in a conflict of interest.

        David v. Signal Int'l, L.L.C., 2010 U.S. Dist. 88047 (E.D. La. Aug. 26, 2010).  This opinion had to do with the production of documents.  In a footnote the court noted that putative class members do not have a "traditional attorney-client relationship" with putative class counsel, citing In re Community Bank of N. Va., 418 F.3d 277 (3d Cir. 2005) and Morisky v. Public Service Elec. and Gas Co., 191 F.R.D. 419 (D.N.J. 2000).

        Andrews Farms v. Calcot, Ltd., 2010 U.S. Dist. LEXIS 93548 (E.D. Cal. Aug. 23, 2010).  Defendants moved to decertify the class in this class action.  The reason was that class counsel had a conflict of interest.  Class counsel had represented a party that arguably had a conflict with the class.  That party was dismissed from the case, and class counsel no longer represents him.  Further, the dismissed party signed a conflicts waiver, including a consent that the class could use the dismissed party's confidential information.  Based upon all the above, the court denied the motion to decertify the class.

        There’s More: Andrews Farms v. Calcot, Ltd., 2010 U.S. Dist. LEXIS 111656 (E.D. Cal. Oct. 13, 2010).  A defendant again moved to disqualify class counsel.  In this opinion the court denied the motion.  First, the court noted that the defendant had not shown that any plaintiffs were adverse to one another (court did not describe what the claimed conflict was).  The opinion contains a lengthy discussion of standing and found that in the circumstances of this case the defendant needed standing, and, not having ever represented the plaintiffs, did not have the requisite standing.

        McCauley v. Family Dollar, Inc., 2010 U.S. Dist. LEXIS 116636 (W.D. Ken. Nov. 1, 2010).  Law Firm is handling two putative class actions against Store Chain.  In this case the proposed class consists of lower-level store employees whom Store Chain wrongfully forced to work "off the clock" and whom Store Chain wrongfully denied breaks.  In the other case ("Other Case") the class would comprise local store managers who were wrongfully denied overtime.  In this case Store Chain moved to disqualify Law Firm.  In this opinion the court granted the motion.  First, the court noted that Law Firm would almost certainly have to cross-examine in this case managers called by Store Chain, some of whom would be members of the class in Other Case.  The other basis for disqualification is the "appearance of impropriety," arising out of the opportunity for the plaintiffs in the two cases to collude.  For example, managers who were clients of Law Firm in Other Case, who worked with Store Chain's lawyers in this case, theoretically could pass along Store Chains confidences to Law Firm.  [Note: that's right, although "appearance of impropriety" no long appears in the Kentucky Rules, Kentucky courts continue to recognize the concept in certain contexts.]

        Negotiating Lawyer's Fee with Settlement Amount.  Martin v. Huddle House, Inc., 2011 U.S. Dist. LEXIS 13670 (N.D. Ga. Feb. 11, 2011).  In this opinion the court refused to approve the settlement of FLSA claims because the plaintiffs' lawyer negotiated the settlement amounts and his fees "simultaneously."  The court scheduled a hearing to deal with "this potential ethical violation."  This is not a class action, but the fee negotiation point seems relevant.

        Gale v. Chicago Title Ins. Co., 2011 U.S. Dist. LEXIS 29745 (D. Conn. March 23, 2011).  In this class action the plaintiffs are seeking, pursuant to a Connecticut statute, to ensure that only licensed lawyers can be title agents.  Class counsel in this case are also representing plaintiffs in another class action, in which Chicago Title is the only defendant.  That action involves rates charged by title insurance companies.  However, in that case putative class members in this case are required to be deposed and reveal information about title insurance fees.  In this opinion certifying the class the court held that class counsel do not have a disqualifying conflict because class members in this case are not "jeopardized" by the other case.

        Florida Bar v. Adorno, 2011 Fla. LEXIS 952 (Fla. April 21, 2011).  Lawyer filed a class action against City for return of certain fees.  Before the class was certified, lawyer settled the case on behalf of seven class representatives whereby the clients would receive $5 million and Lawyer's firm would receive a fee of $2 million.  The trial court approved the settlement, although it seems from the opinion that the court did not understand that the settlement only involved the class representatives.  Lawyer did not prosecute the action following the settlement.  Later the settlement was undone, and disciplinary proceedings brought against Lawyer.  In this opinion the court affirmed the hearing referee's findings that Lawyer violated Florida's versions of Model Rules 1.5, 1.7(a)(1), 1.7(a)(2), and 8.4(a), (c), & (d).  The court did not affirm the discipline (public reprimand), but rather ordered Lawyer suspended for three years.

        Sakalowski v. Metron Services, Inc., 2011 U.S. Dist. LEXIS 77785 (E.D. Mo. July 18, 2011).  The defendants in this class action provide services to persons being pursued in collection cases.  A lawyer for the plaintiffs ("Lawyer") was referred cases by the defendants, including cases against a number of putative class members.  The defendants moved to disqualify Lawyer.  In this opinion the court granted the motion.  First, the court held that Lawyer had a Rule 3.7 (lawyer as witness) issue.  Second, the court held that Lawyer had a conflict because of his referral relationship with the defendants.  Last, the court held that Lawyer would need an informed conflicts waiver from all class members, which, Lawyer admitted would not be "feasible."

        Fees.  Blessing v. Sirius XM Radio Inc., 2011 U.S. Dist. LEXIS 94723 (S.D.N.Y. Aug. 24, 2011).  In this opinion the court approved a $23 million fee award to class counsel.  The court noted that the fees were not negotiated until after the class settlement was agreed to.  Thus, the court found that class counsel did not have a conflict of interest with class members.  The court also reviewed class counsels' billing records and found them to be in order.

        Blaney v. Charlotte-Mecklenburg Hosp. Auth., 2011 U.S. Dist. LEXIS 103159 (W.D.N.C. Sept. 13, 2011).  This is a FLSA case brought by nurses regarding the way their lunch breaks affect their compensation.  Some of the class members have supervisory responsibilities regarding lunch breaks.  The defendants moved to disqualify plaintiffs' counsel.  In this opinion the district judge held that the conflicts at this stage are "speculative" and denied the motion "without prejudice.

        Ehrenhaus v. Baker, 2011 N.C. App. LEXIS 2161 (N.C. App. Oct. 4, 2011).  In this opinion the court held that the fact that class counsel's fee was contingent and was being paid by a defendant was not, per se, a violation of North Carolina's version of MR 1.8(f).

        Harris v. Vector Marketing Corp., 2011 U.S. Dist. LEXIS 117927 (N.D. Cal. Oct. 12, 2011).  Utilizing factors articulated in Bluetooth Headset Prod. Liab. Litig., 2011 U.S. App. LEXIS 17224 (9th Cir. Aug. 19, 2011), the court refused to approve a class action settlement in which the class member recoveries would be small and the class counsel fees would be substantial.  The three Bluetooth factors are: (1) the lawyers' fees are disproportionate to the class recovery; (2) the settlement includes a "clear sailing" agreement for fees; and (3) unclaimed recovery amounts revert to the defendant.  All three factors were present in this case.

        Hayes v. Harmony Gold Mining Co. Ltd., 2011 U.S. Dist. LEXIS 138543 (S.D.N.Y. Dec. 2, 2011).  In this opinion the court approved a settlement, over objections, which provided that the defendant would pay $9 million and the plaintiffs' law firm would receive one-third of that.


        McDonough v. Toys "R" Us, Inc., 2011 U.S. Dist. LEXIS 150851 (E.D. Pa. Dec. 21, 2011).  One law firm represented five subclasses, each representing a different baby product sold by the defendant.  In this opinion the court approved a settlement of the case, with each subclass receiving a different share of the total settlement.  Several parties objected, claiming the plaintiffs' law firm had a conflict of interest.  The court rejected that claim, finding no "actual" conflict of interest.  Among other things the law firm had hired an economics expert who came up with a formula for the subclasses to share the settlement.

        In re Vitamin C Antitrust Litig., 2012 U.S. Dist. LEXIS 13670 (E.D.N.Y. Jan. 26, 2012).  This is a price-fixing class action against Chinese vitamin C manufacturers.  It will be of particular interest to antitrust litigators.  It deals, in part, with class counsels' possible conflicts of interest in representing direct vs. indirect purchasers and classes seeking damages vs. classes seeking injunctive relief only.  All of these issues are under the "adequacy" standard of FRCP 23.  We will leave it at that due to the practice-specific nature of the issues.

        In Re Yasmin and YAZ Drospirenone Litig., 2012 U.S. Dist. LEXIS 33183 (S.D. Ill. March 13, 2012).  The proposed class representative is a close friend of class counsel's wife, although not a relative or business associate.  Nevertheless, this relationship disqualified the class representative.  The court noted the danger that the class representative may be motivated by a desire to see class counsel's fees maximized to the detriment of class members.

        Broin v. Phillip Morris Cos., Inc., 2012 Fla. App. LEXIS 4357 (Fla. App. March 21, 2012).  Lawyers A and B represented plaintiffs in a class action against tobacco companies, but were not lead counsel.  When part of the case was settled with the creation of a research fund, A and B, on behalf of some plaintiffs sued the fund for an accounting and other relief.  The fund trustees moved to disqualify A and B because they had "switched sides."  The trial court granted the motion.  In this opinion the appellate court reversed.  First, the court said that the the conflict rules do not fit neatly in class actions, where lawyers have more leeway in dealing with settlements, objectors, etc.  Second, the court said that those plaintiffs objecting to the suit for accounting could show no prejudice to them in allowing A and B to proceed.

        Leonard v. Abbott Lab., Inc., 2012 U.S. Dist. LEXIS 30608 (E.D.N.Y. March 5, 2012).  The issue here was the right of a plaintiff to dismiss her claims without prejudice.  The opinion contains a brief, inconclusive, discussion of whether a law firm can be class counsel when a partner in the firm is class representative.

        L.S., a Minor Child v. Delia, 2012 U.S. Dist. LEXIS 43822 (E.D.N.C. March 29, 2012).  This is a putative class action brought by Medicaid recipients who claim they were denied certain procedural rights during determination of their benefits.  In this opinion the court held that class counsel were not inadequate merely because some class members may be disadvantaged to a greater or lesser extent than others.

        Monitoring Agreement no a Problem.  United Food & Commercial Workers Union v. Chesapeake Energy Corp., 2012 U.S. Dist. LEXIS 45090 (W.D. Okla. March 30, 2012).  Motion to certify class. Law Firm had a pre-existing agreement with a named plaintiff to monitor the plaintiff's investments and alert the plaintiff for possible violations of the securities laws.  In granting certification the court in this opinion held that the monitoring agreement did not constitute a conflict of interest so as to make the plaintiff inadequate to be a lead plaintiff.  By implication this finding also means that Law Firm was not disqualified by the monitoring agreement.

        In re Oreck Corp. Halo Vacuum & Air Purifiers Mktg. & Sales Practices Litig., 2012 U.S. Dist. LEXIS 54600 (C.D. Cal. April 17, 2012).  Motion to consolidate related class actions.  In this opinion the court granted the motion.  One objection was that the proposed interim class counsel would have a conflict because the classes might be competing for limited funds.  The court rejected that objection saying that such conflicts could be resolved "at the remedy stage."

        Professional Firefighters Ass'n of Omaha v. Zalewski, 2012 U.S. App. LEXIS 9226 (8th Cir. May 7, 2012).  Current and retired City employees sued City to enjoin enforcement of an ordinance altering their healthcare plans.  The parties agreed to a settlement changing the way the changes would operate.  A number of class members objected because the same law firm was representing both current and retired employees.  The district court approved the settlement and the objectors appealed.  In this opinion the 8th Circuit affirmed.  The court noted that in prior opinions it had expressed concern about the potential for conflict involving active and retired employees, but the court did not see circumstances requiring separate counsel in this case.

        United States v. City of New York, 2012 U.S. Dist. LEXIS 76522 (E.D.N.Y. June 3, 2012).  Hiring discrimination case involving the fire department.  Most of this opinion deals with the calculation of damages for individual class members.  One issue relevant to this audience was whether a law firm could represent a subclass and then represent individual members of that sub-class during the claims process.  The court said the firm could represent individual claimants provided each claimant qualified for relief under the minimum criteria for relief which subclass counsel helped determine.  The law firm would not be permitted to represent an individual who sought to amend or challenge the minimum criteria.

        In re Oil Spill by the Oil Rig "Deepwater Horizon," 2012 U.S. Dist. LEXIS 83214 (E.D. La. June 15, 2012).  In this MDL involving the 2010 BP oil spill in the Gulf of Mexico, the court entered an order capping attorneys fees at 25% plus reasonable costs.  The order was premised upon the fact that "a conflict of interest necessarily exists between the claimants and their attorneys."

        Rodriguez v. Disner, No. 2012 U.S. App. LEXIS 16698 (9th Cir. August 10, 2012).  Antitrust class action against providers of bar review courses.  At the outset of the matter Class Counsel entered into incentive agreements with five class representatives, which required Class Counsel to seek an award to the class representative of up to $25,000 each if the settlement amount reached $10 million.  The case finally settled for $49 million.  Class Counsel's fee would have been $7 million; however, the district judge ruled that the incentive agreements put Class Counsel in a conflict of interest and denied Class Counsel the $7 million.  In this opinion the Ninth Circuit affirmed.

        Edwards v. First American Corp., 2012 U.S. Dist. LEXIS 174957 (C.D. Cal. Nov. 30, 2012).  Motion to decertify class.  One of the grounds was that class counsel might have a conflict by virtue of another representation (conflict not clear to us).  In denying the motion, the court noted Comment [25] of ABA MR 1.7 to the effect that class counsel could be adverse to unnamed members of the class in other, unrelated matters.

        Negotiating Merits and Fees Separately.  In the following cases the court, in approving settlements, noted with approval that the parties had negotiated the awards and lawyers' fees separately: Martinez v. Kenzie Kare Group Home, Inc., 2012 U.S. Dist. LEXIS 178181 (M.D. Fla. Nov. 27, 2012); Almonte v. Dealers Choice Transp., LLC, 2012 U.S. Dist. LEXIS 108038 (M.D. Fla. July 18, 2012); Kaufman v. American Express Travel Related Services Co., Inc., 2009 U.S. Dist. LEXIS 119397 (N.D. Ill. Dec. 22, 2009); and In re Sony SXRD Rear Projection Television Class Action Litig., 2008 U.S. Dist. LEXIS 36093 (S.D.N.Y. May 1, 2008).

        Corpac v. Rubin & Rothman, LLC, 2013 U.S. Dist. LEXIS 9803 (E.D.N.Y. Jan. 24, 2013).  This is a FDCPA class action against a law firm.  An objector to a settlement moved to disqualify the lawyer representing the class ("Lawyer A") because Lawyer A had been co-counsel with the defendant's lawyer ("Lawyer B") in many other FDCPA cases and because Lawyer B had represented Lawyer A in a matter.  In this opinion the court granted the motion because Lawyer A simply knew too much about how Lawyer B thinks and operates.

        Cy Pres Distributions.  In re Baby Prods. Antitrust Litig., 2013 U.S. App LEXIS 3379 (3d Cir. Feb. 19, 2013).  This opinion reviews a trial court's approval of a settlement involving a cy pres distribution.  Without getting into the specifics, it is worth noting that the court pointed out that cy pres provisions in a class action settlement require courts to give greater scrutiny to such settlements because of the possibility that class counsel could be compromised by conflicts of interest.

        Cy Pres Beneficiary Designation.  In re Easysaver Rewards Litig., 2013 U.S. Dist. LEXIS 15738 (S.D. Cal. Feb. 4, 2013).  Order approving class action settlement.  A party objected to the cy press designation of a law school as beneficiary because several class counsel had attended that law school.  The court ruled that the mere fact that the lawyers had gone there was not enough to constitute a conflict of interest.

        Missud v. Oakland Coliseum Jt. Venture, 2013 U.S. Dist. LEXIS 29915 (N.D. Cal. March 5, 2013).  In this opinion, in striking class allegations, the court reiterated the California rule that the class representative cannot also be class counsel.

        Bank v. Amer. Home Shield Corp., 2013 U.S. Dist. LEXIS 29546 (E.D.N.Y. March 4, 2013).  Plaintiff, a lawyer, filed this class action as both class representative and class counsel.  Before Plaintiff moved for class certification, Defendant moved to strike the class allegations, based upon the rule that the same person cannot be class representative and class counsel.  In this opinion the court denied the motion, because the conflict issue does not arise until class certification, by which time the alignment among the parties and the lawyers may have changed.

        Evans v. Potter, 2013 U.S. Dist. LEXIS 27271 (S.D. Ind. Feb. 14, 2013).  Class Action.  Three prisoners (non-lawyers) filed this action pro se.  In this opinion the court denied class certification in part because of the principle that class counsel and class representative should not be the same.

        Lowery v. City of Albuquerque, 2013 U.S. Dist. LEXIS 35626 (D.N.M. Feb. 27, 2013).  Class action.  One of the class representatives ("Rep1") had signed a retainer agreement with Law Firm that was applicable to an individual representation, not a class action.  Law Firm became class counsel.  Rep1 dropped out as class representative and opted out of the class.  In this opinion the court approved a settlement of the class action over the objection of Rep1 who claimed, among other things, that Law Firm had a conflict of interest with him.  The court held that the alleged conflict with Rep1 was not relevant to the reasonableness of the class settlement.  The only conflict relevant to the settlement would be one between Law Firm and the class.

        Radcliffe v. Experian Info. Solutions Inc., 2013 U.S. App. LEXIS 7932 (9th Cir. April 22, 2013).  Pursuant to a proposed settlement of this class action, class representatives were to receive incentive fees of $5,000 each only if they supported the settlement.  Unnamed class members were to receive from $26 to $750 each.  The trial court approved the settlement.  In this opinion the appellate court reversed and remanded.  The court held that the class representatives were not adequate, thereby rendering class counsel not adequate, both having conflicts of interest. Upon remand, one group of class members moved to disqualify the class counsel who had promoted the conditional incentive fees. The trial court denied the motion. In Radcliffe v. Hernandez, 2016 WL 1178732 (9th Cir. March 28, 2016), the Ninth Circuit affirmed, holding that disqualification in class actions is not "automatic."

        Perdue v. Green, 2013 Ala. LEXIS 34 (Ala. April 19, 2013).  This opinion found that the trial court did not abuse its discretion in approving the class counsels' fees in part because they were negotiated after the class settlement and because the fees were vigorously contested.


        Plumbers & Pipefitters Nat'l Pension Fund v. Burns, 2013 U.S. Dist. LEXIS 77493 (N.D. Ohio June 3, 2013).  Order granting motion to certify class.  Plaintiff, P&P, sought appointment of Law Firm A as class counsel.  P&P represented it would retain Law Firm B to monitor Law Firm A.  Law Firm A would compensate Law Firm B.  P&P had in place a monitoring agreement with Law Firm A to monitor P&P's investments and look out for securities fraud.  Notwithstanding all the foregoing, the court overruled the defendants' objections to retention of Law Firm A as class counsel.

        Corpac v. Rubin & Rothman, LLC, 2013 U.S. Dist. LEXIS 110408 (E.D.N.Y. Aug. 1, 2013).  In this FDCPA class action Lawyer P represents Plaintiffs.  Lawyer D represents Defendant.  About one year into this case Lawyer D brought in Lawyer X as co-counsel.  Because Lawyer X had earlier been co-counsel with Lawyer P in "twenty-three other similar cases," the court, in January 2013, disqualified Lawyer X in this case.  In this opinion the court denied Lawyer X's motion for reconsideration.  The opinion is mostly about reconsideration principles and does not articulate the basis for disqualification in the first instance.  This is not the classic Rule 1.9/playbook case, because Lawyer X was not, in this case, opposing a former client.

        Bank v. Carribbean Cruise Line, Inc., 2013 U.S. Dist. LEXIS 116534 (E.D.N.Y. July 24, 2013).  In this opinion the magistrate judge denied class certification because the plaintiff could not prove that the defendant had committed the alleged wrongful acts.  While not reaching the issue, the court nevertheless discussed those authorities holding that the same person should not be both class representative and class counsel.

        Lou v. Ma Labs., Inc., 2014 U.S. Dist. LEXIS 2665 (N.D. Cal. Jan. 8, 2014).  Motion to certify the class in this FLSA case.  The court denied the motion in part because the proposed class counsel firm was also bringing another class action against the same defendants involving “substantially similar claims and evidence.”  The court followed Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).

        Rules 4.2 & 4.3 (posted January 13, 2014) EEOC v. SVT, LLC, 2014 U.S. Dist. LEXIS 2391 (N.D. Ind. Jan. 8, 2014).  This is a suit by the EEOC against a food supplier for sex discrimination in hiring.  Both parties raised issues under both Ind. Rules 4.2 and 4.3 regarding who could talk to class members and who could talk to company employees.  Because the magistrate judge’s opinion was so fact-intensive, and of questionable precedential value, we will not provide any detail here.  The court discusses many cases on these issues.  Suffice it to say, anyone with similar issues, particularly in class actions, might find the opinion informative.

        White v. Experian Info. Solutions, 2014 U.S. Dist. LEXIS 61433 (C.D. Cal. May 1, 2014). FCRA class action. Class counsel had orchestrated a settlement of this action. The Ninth Circuit vacated the settlement because an incentive award feature pitted the class representatives against absent class members. Thus, class counsel had a conflict of interest. Upon remand certain parties moved to disqualify certain class counsel because of this conflict. In this opinion the court denied the motion. The court noted that the offending incentive award was no longer a feature of this case. Balancing all factors the court felt that class counsel should stay in the case. The opinion contains a lengthy discussion of California’s “automatic disqualification rule,” and said that rule should not apply in this case. (Note: [1] this is an amendment to an opinion in this case in January 2014, but we do not know what was changed; [2] also, we noted in our January summary that in fourteen years of reading, and writing about, California conflict-of-interest cases we have never been aware of an “automatic disqualification rule,” and are not entirely sure what it means. That uncertainty remains.)

        Young v. Achenbauch, 2014 Fla. LEXIS 1029 (Fla. March 27, 2014). Lawyers A and B represented various flight attendants in a class action against tobacco companies for injuries from second-hand smoke. The settlement provided that the entire $300 million settlement amount be used to create and operate a foundation to research health hazards for flight attendants. The settlement also provided that class members could pursue individual cases for damages. Several class representatives became members of the foundation’s board. Two of the lawyers who had represented the class, Lawyers A and B, have brought a suit on behalf of other class members against the foundation for misuse of funds, among other things. Foundation moved to disqualify A and B. The trial court granted the motion. The appellate court reversed. In this opinion the Florida Supreme Court reversed the appellate court and reinstated the trial court’s disqualification order. Of interest to this audience is that the court ruled that Florida ethics rules should govern disqualifications in class actions, not a more flexible test used in some federal courts.

        Sandoval v. Ali, 2014 U.S. Dist. LEXIS 42630 (N.D. Cal. March 28, 2014). FLSA class action. Defendants moved to disqualify Plaintiffs’ counsel because he was representing other groups against the same defendants. Because Plaintiffs had not yet sought certification of the class, the magistrate judge felt that disqualification would be premature. Defendants also raised the fact that Plaintiffs’ counsel represented one of the defendant’s supervisors in another case, and that class counsel would have to cross-examine her in this case. The court said that, at this stage, whether that would be an issue is speculative. The court concluded by saying that at the class certification stage Plaintiffs would have to satisfy the adequacy-of-counsel requirement.

        Reece v. United Home Care of N. Atlanta, Inc., 2014 U.S. Dist. LEXIS 61196 (N.D. Ga. May 2, 2014). Lawyer filed a false claims/qui tam action against United on behalf of a manager of United (“Manager”) (not this case). Lawyer filed this FLSA “collective” action on behalf of employees of United regarding failure to pay overtime. United moved to disqualify Lawyer. In this opinion the court denied the motion. Manager swore she knew nothing about this FLSA matter. Lawyer instructed Manager not to discuss the overtime claim with Lawyer. The court found that the matters were not related.

        Bad FLSA Settlement Proposal. Daniels v. Aeropostale West, Inc., 2014 U.S. Dist. LEXIS 74081 (N.D. Cal. May 29, 204). Plaintiffs’ lawyers moved for preliminary approval of settlement of this collective FLSA action. The proposal was flawed, and, in this opinion, the court rejected it. The conflicts point was that this is one of three different collective actions plaintiffs’ lawyers are handling against the same defendant. The court noted that the plaintiffs’ lawyers might attempt to settle all the actions at one time, possibly to the detriment of one or two groups of plaintiffs. The court did not mention, specifically, the possible zero sum implications of these representations.

        Eubank v. Pella Corp., 2014 U.S. App. LEXIS 10332 (7th Cir. June 2, 2014). The district court approved a settlement. In reversing, the appellate court called the settlement “scandalous.” According to this opinion the terms were lopsided in favor of the class counsel and defendant and against class members. The court also found conflicts. One was the fact that the class representative was the father-in-law of the class counsel. The other related to an unrelated disciplinary proceeding against class counsel, which was heading for resolution. Thus, it was advantageous to class counsel to get a settlement hurriedly approved while he was still eligible to receive fees. (During this appeal the Hearing Board of the Ill. ARDC recommended that class counsel be suspended for 30 months.)

        Allen v. Hyland’s Inc., 2014 U.S. Dist. LEXIS 107187 (C.D. Cal. Aug. 1, 2014). Suit against sellers of homeopathic products. In objecting to a motion to certify a class the defendants claimed that plaintiffs’ counsel had conflicts because they were handling parallel actions against the same defendants. In this opinion the court discussed those cases holding that handling parallel actions could be disqualifying, primarily where there was a zero sum issue. The court rejected the objection here because defendants had not shown that there would not be enough money to satisfy all claimants.

        Crissen v. Gupta, 2014 U.S. Dist. LEXIS 114924 (S.D. Ind. Aug. 19, 2014). Motion to certify class. The father of a partner in the plaintiffs’ law firm is an important business competitor of the defendant. Discovery revealed that one purpose of this action is to “take out” the defendant as a competitor. That relationship, in addition to a number of different acts of misconduct by the plaintiffs’ law firm, caused the court to find that plaintiffs’ law firm was not adequate. For that reason and other reasons relating to the class representative’s adequacy, the court denied class certification.

        Redman v. Radioshack Corp., 2014 U.S. App. LEXIS 18181 (7th Cir. Sept. 19, 2014). A magistrate judge had approved a settlement of this class action, under which class members would receive coupons and class counsel would receive $990,000 in fees. In this opinion by Judge Richard Posner the appellate court vacated the order approving the settlement, holding that the magistrate judge had erroneously analyzed the settlement terms. The court re-computed the value of the coupons and found that, given their minimal value, class counsel’s compensation was excessive. The court suggested that this disparity was “consistent with” class counsel’s having a conflict of interest. In a very similar case Judge Posner made a similar statement about class counsel's conflict of interest, Pearson v. NBTY, Inc., 2014 U.S. App. LEXIS 21874 (7th Cir. Nov. 19, 2014).

        Smith v. Ga. Energy USA, LLC, 2014 U.S. Dist. LEXIS 133899 (Sept. 23, 2014). This is a class action by gasoline consumers against an owner of three gas stations, which had been using miscalibrated gas pumps. Class Counsel also represents non-class members in individual suits in state courts against the same owner. In this opinion the court noted a possible zero sum problem and gave Class Counsel a deadline to produce a “plan to address the problem.”

        In re HP Inkjet Printer Litig., 2014 U.S. Dist. LEXIS 139850 (N.D. Cal. Sept. 30, 2014). Class Action against HP. This opinion is in part a ruling on a motion to disqualify Class Counsel (“CC”). The problem was that CC was handling a derivative action against HP, which settled. That settlement provided, in part, that HP would hire CC for future work. Because this case had been “fully litigated and judgment entered” before the settlement agreement in the other case, this court could not see the conflict. Moreover, the court noted that the trial judge in the other case had required the parties to omit the agreement by HP to hire CC in the future.

        Eastwood v. S. Farm Bur. Cas. Ins. Co., 2014 U.S. Dist. LEXIS 142652 (W.D. Ark. Oct. 7, 2014). Order approving class action settlement. The settlement contained a “clear sailing” provision regarding class counsel’s fee as well as a “reversionary clause” providing for return of unclaimed settlement funds to the defendant. The court said these clauses created a potential conflict for class counsel and required a “closer look” at the fees. The court then reduced the counsel fees from roughly 1/3 of the total settlement fund to an amount reflecting class counsel’s time spent on the case. Given the reversion resulting from lack of claims, the requested fee would have exceeded amounts paid to class members.

        Langendorf v. Skinnygirl Cocktails, LLC, 2014 U.S. Dist. LEXIS 154444 (N.D. Ill. Oct. 30, 2014). Motion to certify class. Denied. One of the reasons for denial was the various relationships among the class representative’s (“ClassRep”) family and class counsel. Class Rep’s father, a lawyer, has been co-counsel with class counsel in at least five other class actions. Also, class counsel has handled other class actions where the class representatives were related to ClassRep. Moreover, the court seemed put off by ClassRep’s dismissive attitude about these relationships.

        Fitzgerald v. Gann Law Books, 2014 U.S. Dist. LEXIS 174567 (D.N.J. Dec. 17, 2014). In approving a class action settlement, the court in this opinion reduced class counsels’ fees from $1,000,000 to about $400,000. Under the settlement the unclaimed portion of the total settlement would revert to the defendant. Thus, the proposed counsel fees would be 84% of the amounts actually received by class members, as opposed to the total settlement amount. As in the Posner opinions recently described here, the court used conflict-of-interest rubric to describe the settlement.

        City Trading Fund v. Nye, 2015 WL 93894 (N.Y. Sup. Ct. Jan. 7, 2015). In this opinion the court denied a motion to approve a settlement and certify a class. This case is one of a series of cases brought by Law Firm for named plaintiffs with a small number of shares in cases of corporate mergers. The court said that Law Firm was clearly acting in its own interest without regard for real shareholders. A Delaware chancery judge had made similar findings. Both the judge in this opinion and the Delaware judge cited in this opinion found Law Firm’s conduct so distasteful, on a number of levels, that their conflict-of-interest reasoning was not entirely clear, at least to us.

        In re Bank of Am. Corp. Sec. Litig., 2015 WL 3454516 (E.D. Mo. May 29, 2015). Lawyers A and B sought to be co-lead counsel in this class action. In this opinion the court denied their motion because the class representative in this case is class representative in another case in which A and B are defendants.

        Alhassid v. Bank of Am., N.A., 2015 WL 4606760 (S.D. Fla. July 31, 2015). In this opinion the court denied class certification in part on adequacy grounds. The court was troubled that class counsel were Plaintiff’s daughter and son-in-law. While noting that some courts have overlooked a close relationship between a class representative and class counsel, in this case Plaintiff’s lack of sophistication rendered the relationship fatal to class certification.

        In re Am. Express Anti Steering Rules Antitrust Litig., 2015 WL 4645240 (E.D.N.Y. Aug. 4, 2015). Motion to approve a class action settlement. In this opinion the court denied the motion. The court found that Class Counsel No. 1 had violated protective orders in related litigation and was, therefore, not adequate. Given co-counsel’s relationship with Class Counsel No. 1 (very fact-specific), the court also found co-counsel not adequate. (“[T]hey do not seem to understand the problem with [Class Counsel No.1]’s conduct.”)

        In re S.W. Airlines Voucher Litig., 2015 WL 4939676 (7th Cir. Aug. 20, 2015). Appeal from class certification and approval of settlement. In this opinion the Seventh Circuit made a few changes but otherwise affirmed the certification and approved the settlement. One of the class representatives (“ClassRep1”) is a lawyer, but not in this case. ClassRep1 and one of the class counsel in this case (“ClassCsl1”) are co-counsel in an unrelated class action. This other representation was not disclosed to the district court. For that reason the Seventh Circuit denied a $15,000 incentive award to ClassRep1 and reduced the fee for ClassCsl1 by an equal amount.

        Volz v. Provider Plus, Inc., 2015 WL 5734916 (E.D. Mo. Sept. 29, 2015). This is a class action under FLSA involving claims for overtime pay. Plaintiffs’ counsel joined Mary Lange as a defendant because she played a role in denying the overtime. Lange also fell within the definition of the plaintiff class. Thus, the court held that Plaintiffs’ counsel had a conflict under Missouri’s version of MR 1.7(a). The court determined that the only viable solution was to prevent Lange from making a claim as a class member and advise her that she is free to bring her own separate lawsuit.

        Mendez v. C-Two Grp., Inc., 2015 WL 8477487 (N.D. Cal. December 10, 2015). Motion to certify class in a TCPA case. Defendants objected, in part  because class counsel was not adequate. Defendants argued that because the class representative was a former paralegal for class counsel, class counsel had a conflict of interest. In this opinion the court rejected that argument. The court said the result might have been different if the class counsel was a current employee of class counsel.

        Sears v. United States, 2015 WL 9311530 (U.S. Ct. Cl. Dec. 22, 2015). This is a class action brought by 170 landowners who claimed ownership of an abandoned rail line on their property. The United States government purported to claim the right of way for a public trail. The plaintiffs are claiming a taking in violation of the Fifth Amendment. The case was almost settled when 21 landowners decided to reject the settlement and sought to establish a sub-class. The United States objected in part because the class counsel would have a conflict of interest. The claimed conflict would arise from the fact that the sub-class’s contentiousness would result in greater fees and expenses for the larger settling class. In an analysis not entirely clear to us the court rejected the conflict argument, explaining how the fees and expenses would be shared equitably.

        In re Subway Footlong Sandwich Mktg. & Sales Practices Litig., 2016 WL 755640 (E.D. Wis. Feb. 25, 2016). This MDL proceeding involves multiple class actions based upon allegations that some sandwiches sold by defendant were “slightly shorter than their advertised lengths (“Footlongs” and “6-inch”) (One poor guy’s “Footlong” was only 11 inches long!). The parties agreed to settle for a total of $525,000 for the class members and $525,000 for lawyers’ fees. We will not discuss the court’s resolution of how to distribute $525,000 to “millions” of class members. We will discuss the approval of lawyers’ fees. The court found the fees reasonable because they were 50% of a “lodestar” calculation (hours spend X reasonable hourly rates), and, thus, not indicative of a conflict between the class and class counsel. The court noted at various points the potential for conflicts between class members and class counsel in consumer cases, and the need for close court supervision in those cases.

        Purdy v. Richland Holdings, 2016 WL 953238 (D. Nev. March 14, 2016). Class action against a debt collection agency. Plaintiff is an employee of a competing debt collection agency. She has hired as class counsel the law firm that represents Plaintiff’s employer. In denying class certification the court said that this relationship “raises a significant concern whether counsel has a conflict of interest.”

        In re Citigroup Inc. Secs. Litig., 2016 WL 4198194 (S.D.N.Y. Aug. 9, 2016). Securities class action. Settlement totaled $590 million. Almost all the money was paid out to class members, leaving some $375,000, for which payment was “no longer feasible.” The court resorted to a cy pres distribution to three not-for-profit entities. One class member objected, claiming that the “reasonable approximation” test for selecting cy pres recipients applied by the court was in error. The objector claimed the court should have applied the “next best standard.” In this opinion the court confirmed the appropriateness of using the “reasonable approximation” standard, and stated that that standard creates no “heightened conflict-of-interest risk” for class counsel “in the cy pres context.” [Note: The difference between the two standards is not clear to us. Perhaps, members of this audience can tease out the difference by reading the opinion.]

        In re Sears, Roebuck & Co. Front-Loading Washer Prods. Liab. Litig., 2016 WL 4765679 (N.D. Ill. Sept. 13, 2016). This opinion concerned the amount of compensation due class counsel. Given the “inherent” conflict of interest in class action suits, the magistrate judge discussed the best way to compute the compensation, including a comparison of the “ratio approach” to the “lodestar” approach. In this case the court found that the ratio approach yielded a fee that was well short of what was fair given nine years of hotly contested litigation. So, the court computed the fee using the lodestar approach. This was basically hours worked times billing rates, with a multiplier of 1.75, yielding a fee of $4,770,834.

        SEECO, Inc. v. Snow, 2016 Ark. 444 (Ark. Dec. 8, 2016). Mineral lessors brought this class action to recover underpaid royalties. In the class certification process the plaintiffs limited the class to citizens of Arkansas. One of the objections to certification was that so limiting the class put class counsel in a conflict of interest. The court rejected that objection noting that the rights of non-citizen lessors were not impaired, and they were free to pursue their claims when and where they wished.

        Golan v. Veritas Entm’t, LLC, 2017 WL 193560 (E.D. Mo. Jan. 18, 2017). In this opinion granting class certification, the court held that the fact that class representatives and class counsel are close friends is not, without more, a conflict rendering class counsel inadequate.

        Muniz v. Re Spec Corp., 2017 WL 238482 (S.D.N.Y. Jan. 19, 2017). FLSA case involving low-level restaurant workers. The defendants moved to disqualify Plaintiffs’ law firm (“Law Firm”). In this opinion the magistrate judge denied the motion. Octavio Gonzalez (“OG”) was an original plaintiff in this case and thus a client of Law Firm. When an amended complaint was filed Gonzalez disappeared as a plaintiff. Law Firm had also filed another similar case against these defendants. In that case OG was not a defendant but some of the workers testified that OG exercised management responsibilities over them. The court’s analysis was fact-intensive. On balance the court felt that the possibility that OG would be a defendant in this case was slim and did not justify disqualification.

        Read v. Howard-Wright Employ. Agency, Inc., 2017 WL 1023633 (Cal. App. Unpub. March 16, 2017). Class action claiming under-compensation. Class counsel decided to depose several putative class members. Defense counsel wound up representing two of the class members for the sole purpose of the depositions. As a result, the plaintiffs moved to disqualify class counsel’s law firm. The trial court, feeling it had no choice, said disqualification should be “automatic.” In this opinion the appellate court reversed and remanded to the trial court for another hearing on disqualification. The court, citing a number of prior cases not particularly on-point, said the “automatic” disqualification rule should not necessarily be applied in class action litigation in California. Thus, the trial court applied the wrong legal standard and should be given an opportunity to revisit the issue.

        Chieftain Royalty Co. v. Enervest Energy Inst'l Fund XIII-A, 2017 WL 2836806 (10th Cir. July 3. 2017). In a side issue mentioned only in a footnote (fn. 5) the court said that the fact that class counsel and lead class representative have, over a long period of time, been filing class actions together is not without more such a conflict as to deny class counsel's fee.

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