While a Texas lawyer and his client say their efforts helped reduce other attorneys’ multi-million dollar payday under a $56 million class action settlement deal, a federal judge has rejected their attempts to grab a $59,000 share of that settlement, saying their efforts were redundant and produced nothing but an opportunity for them to grab some quick cash.
On Aug. 24, U.S. District Judge Matthew F. Kennelly denied the request for attorneys’ fees filed by attorney Christopher Bandas, along with attorney Robert W. Clore, of Bandas’ Corpus Christi, Texas, firm, and attorney Jonathan Novoselsky, of Chicago. The attorneys had asked the court to carve out a cut of a settlement fund worth as much as $76 million which the judge had approved in March to end the litigation against Caribbean Cruise Line, timeshare seller the Berkley Group and phone polling outfit Economic Strategy Group.
The attorneys had represented an objector to that settlement, identified as Freedom Home Care Inc.
“… Because the deadline to file objections to the overall settlement preceded the due date for defendants' response brief, it appears that Freedom Home Care's counsel saw an opportunity to object to the fee petition before defendants could, possibly hoping that they could then take credit (and a portion of the common fund) when the Court eventually reduced the size of class counsel's fee,” Kennelly wrote. “Given this background, the Court sees no legitimate basis to compensate Freedom Home Care's counsel and finds that there is a compelling reason to overrule counsel's request for compensation.”
The underlying action in the case had alleged the cruise line and other co-defendants had worked together to mask telemarketing calls as political polling calls to skirt the requirements of the federal Telephone Consumer Protection Act. Poll participants were told they could be eligible for a “free cruise” to The Bahamas, and were connected with representatives of the cruise line and timeshare sellers at the end of the polling call.
The settlement is considered the largest such settlement ever secured under the TCPA.
As part of the settlement, attorneys from the Chicago firms of Edelson P.C. and Loevy & Loevy requested fees of nearly $24 million, an amount contested in objections by the defendants and Freedom Home Care, who argued such a fee award would give the plaintiffs’ lawyers too large a share of the settlement fund.
Ultimately, the judge sided partially with the objectors, approving a sliding scale, tiered formula, and awarding plaintiffs’ lawyers $15 million - $19 million, depending on how many eligible class members submitted valid claims under the settlement.
Defendants have appealed that ruling to the U.S. Seventh Circuit Court of Appeals in Chicago.
Bandas and his colleagues argued they deserved the lion’s share of the credit for the fee reduction, which they said freed up more money for the plaintiffs class claimants. Particularly, Bandas’ team argued they suggested the court adopt the sliding-scale, tiered approach relative to the entire settlement fund, while defendants only wanted the scale applied to the portion of the settlement the class would receive.
Kennelly, however, said Bandas’ claims didn’t hold up, asserting they were merely a slightly altered version of what the defendant companies were already requesting in their objections. He noted he rejected the defendants’ approach because it was “inconsistent with other case law,” which plaintiffs’ lawyers pointed out in response to the defendants’ request.
“… The Court would have arrived at that structure whether or not Freedom Home Care proposed it, because plaintiffs would have responded, as they did in their reply to defendants and Freedom Home Care, by pointing out that defendants' proposal was incorrect and explaining how the sliding scale approach should be applied were the Court to adopt it,” Kennelly wrote. “In addition, as defendants point out, Freedom Home Care's proposed approach would lead to greater attorneys' fees (and a smaller award for the class) than defendants' approach, and thus Freedom Home Care's proposal could not have benefited the class, even if it were material.”
The judge also denied a request from Freedom Home Care for a $1,000 incentive, as a reward for objecting to the settlement and reducing the fee award for the plaintiffs’ lawyers.
The courtroom tussle is the latest skirmish between the Bandas and Edelson firms. Earlier this year, Edelson accused Bandas and others of engaging in racketeering, by repeatedly representing purported objectors to various class action settlements, simply to gain leverage to extract payoffs from Edelson and other class action trial lawyer firms. Specifically, Edelson has accused Bandas and others associated with him of filing objections to the settlements to either negotiate a separate deal for tens or hundreds of thousands of dollars, or threaten appeals, followed by an offer to withdraw any appeals if the class action lawyers pay them to go away.
Bandas has asked a federal judge to dismiss the suit, claiming legal precedent has established that filing lawsuits or other legal actions cannot be considered the basis for a racketeering lawsuit. Bandas said, if the courts allow Edelson to move forward with their racketeering action, it could inspire a flood of similar racketeering-themed countersuits from others against anyone who objects to class action settlements.
A hearing on the motions to dismiss was held in July before U.S. District Judge Rebecca Pallmeyer.