One of Chicago’s most prominent class action law firms has won the chance to dig deeper into the practices of a group of lawyers it has accused of extorting payments from other lawyers by acting as “professional” class action settlement objectors, as the firm seeks to unearth further evidence it believes will lead to an injunction to effectively shut down its rival.
On January 3, U.S. District Judge Rebecca Pallmeyer granted the motion from the firm of Edelson P.C. to compel Texas attorney Christopher Bandas and the Bandas Law Firm P.C. to turn over and catalogue more documents, and respond to Edelson’s demands for information concerning Bandas’ licensing and discipline.
Additionally, the judge granted Edelson’s requests to order additional firms to turn over settlement information under subpoena, which Edelson believed would reveal a wider pattern of alleged misbehavior by Bandas and his firm.
The order comes as the latest win for Edelson in a legal battle against Bandas and his associates, dating back to 2016.
Jay Edelson Edelson P.C.
The dispute centered on a $13.8 million settlement in a class action prosecuted by Edelson lawyers against Gannett Co. over alleged violations of the federal Telephone Consumer Protection Act.
As part of the settlement, a Cook County judge had awarded the Edelson firm more than $5.3 million in attorney fees, or about 39 percent of the total settlement funds.
However, before the settlement was finalized, a man represented by Bandas and Illinois attorney Jeffrey Thut filed an objection, saying he believed the attorney fee award was too high. In that objection, court documents indicate Thut was acting as local counsel in partnership with Bandas, who is not licensed to practice law in Illinois.
The Cook County judge approved the settlement and attorney fees. However, Bandas and Thut threatened to appeal that ruling, setting the stage for a mediation session between Bandas and Edelson.
Edelson has asserted Bandas at that time merely offered to drop the objection in exchange for a payoff, which would allow the settlement to be finalized and all involved to get paid. Ultimately, Edelson agreed to pay Bandas and his group $225,000.
However, Edelson then filed suit in Chicago federal court, accusing Bandas and his associates of acting as “professional objectors” by using the class action settlement process to run a racketeering and extortion scheme.
Judge Pallmeyer tossed the racketeering charges, but has allowed the case to proceed on Edelson’s assertions Bandas had improperly practiced law in Illinois.
In September, Bandas attempted to use the ruling to end the case quickly, asking a judge to simply prohibit him and his firm from practicing law in Illinois.
Edelson, however, argued such an injunction would accomplish nothing, as it would simply order Bandas to “obey the law” and would not stop Bandas from continuing with his practices, which includes “orchestrating objections in state courts without appearing” personally.
Rather, in a motion to compel discovery filed on Dec. 13, Edelson asserted it could prove a widespread pattern of misbehavior by Bandas, extending beyond the Gannett settlement case and beyond Illinois.
Edelson said it believes it will be able to “demonstrate the likely - not speculative - harm by showing that in past cases, he used that non-admitted status to engage in conduct this Court has already deemed unethical.
“But in order to do that, it (Edelson) will need to be prepared with hard evidence of what Bandas did in those cases, and that is what these discovery requests seek.”
For instance, Edelson claimed, with additional disclosure ordered, it could prove Bandas allegedly has lied to the courts and attorney licensing agencies when Bandas told them neither he nor anyone associated with his firm had been the subject of disciplinary actions.
Edelson said it believed such assertions had been made to the U.S. Eleventh Circuit Court of Appeals and to the Attorney Registration and Disciplinary Commission, as well as on an application for malpractice insurance, despite an instance in which Bandas had been found in contempt of court in California federal court and a Chicago federal judge’s admonishment for “failure to disclose an ongoing investigation in New York federal court.”
Bandas “may have made factual statements that differ from what he has told Edelson or the Court, which could be used for impeachment,” Edelson wrote. “He may also have explained the reasons he did not appear in greater detail, which statements are also relevant to the necessity of an injunction here.”
In a separate motion, also filed Dec. 13, Edelson asked the judge to order two other law firms, identified as the Burke Law Offices and Caffarelli & Associates, both of Chicago, to turn over documents related to class action settlements they reached, to which Bandas clients had similarly objected.
Edelson said it believed those documents would reveal Bandas had used the objection process to secure “attorneys’ fees in violation of the Illinois Attorney Act.”
In response to the motions, Bandas asserted approving the requests would allow an “abuse of the power of discovery,” all in attempt to defend “unconscionable” fees secured by Edelson in the Gannett case.
“Edelson’s argument that it is entitled to discovery completely disproportional to the issues and injunctive relief sought here on the basis that ‘Bandas’ conduct in federal court is actionable,’ reveals that the true purpose behind Edelson’s discovery demands is to discover information that it might use to sue Mr. Bandas elsewhere,” Bandas wrote in a brief filed Dec. 21. “Neither this Court nor Mr. Bandas should entertain discovery for such an improper purpose.”
In her Jan. 3 order, however, Judge Pallmeyer granted Edelson’s requests without further comment.
The parties are next due in court on Feb. 6 for a status hearing.
At the same time, in November, an Illinois state appellate court ordered a Cook County judge to give Edelson a hearing to present evidence Edelson said would show a pattern by Bandas and Thut of representing objectors in class action lawsuits simply to secure a payoff in exchange for withdrawing their objections and allowing the case to settle. The Cook County judge had earlier denied that hearing, and the request by Edelson for the court to order sanctions against Bandas and Thut.
Bandas is represented by attorney Darren VanPuymbrouck, of the firm of Falkenberg Ives LLP, of Chicago.