Editor's note: This article has been revised to correct an error. A previous version incorrectly stated Alholm had sued the Vrdolyak Law Group for defamation in 2020. In fact, the law firm had sued Alholm.
The law firm founded by former Chicago Ald. Edward Vrdolyak wasn’t able to fully end a class action lawsuit alleging it violated privacy rights of staff and clients through surreptitious recording.
U.S. District Judge Mary Rowland issued an opinion Jan. 17 substantially rejecting Vrdolyak Law Group’s motion to dismiss the complaint from Daniel Alholm, whose lawsuit includes alleged violations of the Federal Wiretap Act, as well as claims of fraud and likeness misappropriation under Illinois and Tennessee law.
Edward J. Vrdolyak, managing partner at Vrdolyak Law Group
| Vrdolyak Law Group
According to court records, Alholm worked as a plaintiffs’ attorney in Chicago and was considering employment with at least three different firms in early 2017. When the Vrdolyak group approached him, Alholm said he expressed concerns to the firm’s hiring partners, as well as Steve Armburster, one of its attorneys, about the firm’s “reputation, and specifically the disbarment and imprisonment of firm founder Edward Vrdolyak Sr.”
Alholm started with the firm in May 2017. That August, it asked him to manage its new Nashville office. After the move, Alholm alleged, he determined the firm didn’t have money for advertising, to support his cases, pay creditors or fully fund operations. He claims he spent $20,000 on filing fees and work expenses, and also alleged unethical and illegal activities.
Among those allegations are improper processing charges; steering clients to preferred litigation lenders while collecting contingency fees for securing repayment amounts; charging clients for work unrelated to their cases; directing clients to doctors who gave unnecessary medical care and in turn donated to the firm’s charity events; racist and anti-Semitic comments from firm leadership, including in reference to employees; and letting “an agent (subsequently indicted and then pardoned) of an illegal offshore gambling ring to recruit firm employees to wager on sports through his illegal offshore gambling operation.”
Alholm further alleged the firm’s Chicago and Nashville offices have “a network of audio and video surveillance cameras, which Eddie Vrdolyak monitored from his office.” He said in February 2019 Vrdolyak told a firm employee to “pull the tape” of a recent conference call so he could see if employees were making disparaging remarks, and said the people on the call weren’t aware of audio or video recording.
He offered several other allegations of firm leadership recording calls or meetings, but said the tipping point was a January 2020 installation of a new phone system marketed for its call recording functionality. After a colleague called on the new system and advised the call was recorded, Alholm said he consulted with the Illinois Attorney Registration Disciplinary Committee and Tennessee Board of Professional Responsibility before resigning Jan. 24, 2020.
The Vrdolyak firm sued Alholm in Cook County Circuit Court in February 2020, alleging breach of fiduciary duty, tortious interference, and defamation. That case is pending.
On April 7, 2022, Alholm responded with this putative class action in federal court, seeking to represent anyone “whose wire, oral or electronic communications were intercepted” dating back to Jan. 9, 2018.
The law firm said Alholm’s federal case should fail because the two-year statutory window should begin in March 2019, the date referenced in a filing in his state lawsuit when Alholm said an information technology consultant advised that the firm was recording phone calls. While Rowland said she would be allowed to use that filing in her opinion, she said the filing also includes Alholm’s contemporaneous belief the recordings were “an innocent mistake that had been remedied,” she wrote. The March 2019 date, she added, is subject to reasonable dispute.
Rowland further said both parties agree a tolling agreement applies if the January 2020 operative start date is in play, which forestalls dismissal of the federal and Tennessee wiretapping allegations, and noted the Illinois Eavesdropping Act doesn’t specify limitations. Because she didn’t dismiss wiretapping claims, she also retained supplemental jurisdiction over the likeness misappropriation claims.
However, Rowland did agree to dismiss Alholm’s fraud allegations. He claimed firm officials told him it had recovered $9 billion for clients, but Rowland said there is no allegation the firm knew that to be false. Alholm took issue with promises the firm would supply funding and resources for mass tort litigation, but Rowland agreed it “falls in the category of future intent.”
Finally, concerns about the promise neither the firm nor employees were involved in illegal or improper activity lacks supporting evidence alleging any such activity at the time the promise was made and that Alholm’s subsequent allegations aren’t “tied to any specific false statement made during the relevant conversation before he was hired,” Rowland said.
Vrdolyak Law Group has until Feb. 10 to respond to the remaining claims.
Alholm is represented in the case by attorney John Spragens, of Nashville, Tennessee.
The Vrdolyak firm is represented by attorneys Robert D. Sweeney and William C. O’Hara, of Sweeney Scharkey & Blanchard, of Chicago.