In the wake of a judge’s order allowing a prominent Chicago class action law firm to dig deeper into the practices Texas-based Bandas Law Firm P.C., which stands accused of acting as “professional” class action settlement objectors, Bandas has offered what it calls “unconditional surrender” in the years-long multi-jurisdictional court fight.
On Jan. 15, an attorney for the Bandas firm filed a motion in Chicago federal court, amending its prior answer to the lawsuit brought against it by the firm of Edelson P.C., admitting to the charges of practicing law in Illinois without authorization.
The motion also withdraws a counterclaim Bandas had filed against Edelson.
Jay Edelson
| Edelson P.C.
“In light of Defendants’ proposed Amended Answer, the withdrawal of the Counterclaim, and their ‘unconditional surrender’ to Plaintiff’s request for relief on the sole remaining count … what remains in dispute in this case?” Bandas’ motion asserts. “Defendants are totally capitulating to everything Plaintiff seeks …
“To allow this case to proceed would undermine (Seventh Circuit Court of Appeals Judge Frank Easterbrook’s) admonition that the courts should not be used as a ‘subsidized dispute-resolution service.’ More troubling, however, is that it appears that the sole remaining purpose of this case, if it were to continue after Defendants’ capitulation, would be retribution.”
The motion followed two key setbacks for Bandas in his long-running feud with Edelson.
More than two years ago, Edelson filed suit in Chicago federal court, accusing Bandas of masterminding a racket to use the class action settlement objection process to extort settlements, sometimes worth hundreds of thousands of dollars, from law firms seeking to close out class action settlement deals.
The lawsuit 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 Waukegan 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.
After the Cook County judge approved the final settlement, Bandas and Thut threatened to appeal that ruling. The dispute went to a mediation session, where Edelson claims Bandas offered to drop the objection in exchange for a payoff. Ultimately, Edelson agreed to pay Bandas and his group $225,000.
However, Edelson also then filed suit in Chicago federal court, leveling racketeering charges against Bandas.
Judge Pallmeyer tossed the racketeering charges, but 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.
However, Edelson argued such an injunction would be toothless, as it would not stop Bandas from continuing his practices, including “orchestrating objections in state courts without appearing” personally.
In December, however, Bandas filed a counterclaim, claiming it was Edelson who engaged in “dirty tricks” to trap him at the mediation session, and then use the resulting lawsuit to “intimidate and ward off” all who “stand in the… way” of Edelson’s attempts to secure multi-million-dollar paydays from companies and other defendants.
In that counterclaim, Bandas called Edelson’s claims “false and exaggerated,” designed to “detract from the truly grotesque windfall they sought to protect.”
Following that filing, however, an Illinois appeals court sided with Edelson, saying the Cook County judge was wrong to bar Edelson from continuing to pursue sanctions against Bandas.
And on Jan. 3, Judge Pallmeyer granted Edelson’s request to expand discovery on the question of Bandas’ law practices in Illinois. The order would allow Edelson to force Bandas and his associates to turn over a range of additional documents and other information Edelson asserted would prove a widespread pattern of misbehavior by Bandas, extending beyond the Gannett settlement case and beyond Illinois.
Bandas responded to that ruling by offering his “unconditional surrender,” admitting to “unethical, improper and misleading conduct in filing or causing to be filed objections to proposed class action settlements.”
Bandas offered to agree to permanent injunctions forbidding him and his associates from objecting to any further class action settlements in state or federal court, unless the objection abides by two criteria.
First, Bandas said any objection filing “must state whether it applies only to the objector, to a specific subset of the class, or to the entire class, and also state with specificity the grounds for the objection.”
And secondly, Bandas said, the objection must disclose “any payment in connection with the objection.” Those payments must be “approved by the court and, unless approved by the court after a hearing, no payment or other consideration may be provided in connection with forgoing or withdrawing the objection or forgoing, dismissing, or abandoning an appeal from a judgment approving the proposal.”
Bandas also agreed to accept a permanent injunction barring him and his firm from practicing law in Illinois.
“Defendants acknowledge that their reputations before the courts of this jurisdiction and across the country have been gravely but justifiably tarnished,” Bandas wrote in his motion. “Undoubtedly, should Defendants continue to practice class litigation, they will carry the tattoo of these orders with them and they greatly regret the circumstances that bring them before this Court.”
The filing said Bandas is now represented by attorney Robert P. Cummins, of the firm of Norman, Hanson & DeTroy LLC, of Portland, Maine.