A prominent Chicago class action law firm and prolific filer of class action lawsuits against a diverse array of businesses has aimed its latest class action lawsuit against a Texas law firm and other alleged co-conspirators it accuses of engaging in a pattern of racketeering and extortion as “professional objectors,” who use the law to extract payoffs, often worth hundreds of thousands of dollars, in exchange for withdrawing objections holding up the completion of class action settlement payments worth millions from corporations and businesses targeted .
On Dec. 5, Edelson P.C. filed suit in Chicago federal court against The Bandas Law Firm, of Corpus Christi, Texas, accusing the firm of violating the federal Racketeer Influenced Corrupt Organizations Act, and other laws, in connection with Bandas’ alleged repeated moves to interfere with class action settlements, simply to profit.
Also named as defendants in the lawsuit are law firms Noonan Perillo & Thut, of Chicago, and the Darrell Palmer Law Offices, of Solana Beach, Calif. Individual defendants include lawyers Christopher Bandas, Darrell Palmer and C. Jeffery Thut.
The lawsuit asked the court to declare Bandas and his fellow defendants “vexatious litigants” and prohibit them from filing objections to class action settlements, without court approval. The lawsuit also asked the court to award unspecified “monetary, actual, consequential and compensatory damages” to Edelson and other class action plaintiffs’ lawyers who may join in the legal action as well as “injunction, statutory and/or declaratory relief.”
Edelson attorneys, including Edelson founder Jay Edelson, are representing the plaintiffs in the class action.
The lawsuit comes on the heels of an alleged attempt by Bandas, Thut and Palmer to extract payment from Edelson as the firm sought to finalize a $13.8 million deal to settle a class action lawsuit against Gannett Co. over alleged violations of the federal Telephone Consumer Protection Act. That lawsuit alleged Gannett had used an autodial program to call people on their mobile phones without obtaining consent, as required under the TCPA.
Gannett has continued to deny the allegations, but has agreed to pay the settlement to end the lawsuit and avoid trial.
The settlement was approved in September. Yet in October, Thut, allegedly in conjunction with Bandas and Palmer, filed an objection on behalf of a man identified as Gary Stewart. The objection was overruled, and settlement finalized. But Edelson says Thut has threatened to appeal, to “hold up final resolution of the case.” And in November, during a “mediation session,” Bandas and his associates, without addressing the merits of the settlement, allegedly demanded $225,000-$445,000 as a “fee to go away.”
After accepting the deal, Edelson said they also threatened to inform the court of the payoff, at which time Bandas and his associates allegedly “attempted to back out of the deal.”
Yet Edelson alleged the behavior was only a part of a campaign of “serial objections” to various class action settlements. The lawsuit noted Bandas has filed at least 55 objections in the past 10 years, though Edelson said they believe “these 55 objections likely represent only a small fraction of the total number of objections in which Bandas has been involved.”
Edelson said Bandas is the most prolific “serial objector” in the U.S., followed by Palmer. Thut has thus far objected to six class action settlements, but is “just getting started,” Edelson alleged.
The complaint noted the courts have repeatedly criticized Bandas and his associates for their “serial objections,” and their pattern of conduct has been documented in court documents, including in a filing to the U.S. Seventh Circuit Court of Appeals, which was publicized in a report by Reuters.
Yet, Edelson said Bandas and his associates “have often avoided sanctions and reprimand from the courts … because defendants routinely and purposely fail to file appearances in cases where they attempt to extort class counsel through improper objections as a means to avoid consequences.”
The complaint does not state how many of Edelson’s class action settlements Bandas, Palmer or Thut have objected to.
However, Edelson has had many such settlements in recent years, with more likely to come.
Among many others, Edelson served as class counsel in a lawsuit against Caribbean Cruise Line, Economic Strategy Group, the Berkley Group and others, securing a $76 million settlement on behalf of hundreds of thousands of potential plaintiffs who received cruise sales pitches, disguised as political surveys, on their cell phones. Attorneys in the case, which included the firm of Loevy & Loevy, of Chicago, are poised to collect more than $24 million in fees from that settlement.
In September, a $12.1 million settlement was approved in a class action against Nationstar Mortgage over automated telephone calls. Edelson was among a group of plaintiffs' lawyers to receive a combined $3.7 million in attorney fees from the deal, which scheduled $45 to go to each class member.
Also, a year ago, Edelson settled with Walgreens for $11 million to settle a lawsuit alleging the company broke federal law by sending its customers prescription reminders to customers’ cell phones. Edelson was scheduled to earn $2.8 million from that settlement.
Among many others, Edelson has also launched class actions on behalf of clients: suing Facebook for allegedly violating Illinois’ biometrics privacy law by employing software designed to suggest “tags” on photos posted on its pages; suing Grubhub for sending text messages promoting restaurant partners, allegedly in violation of the TCPA; suing L.A. Tan for allegedly keeping customers’ fingerprint data, which allows members to use their membership at any L.A. Tan location, allegedly in violation of Illinois privacy law; suing GroupOn for using Instagram photos to promote deals; and suing a Utah shoemaker for allegedly falsely advertising a supposedly waterproof shoe that allegedly isn’t waterproof.