A Washington lawyer known for attacking class-action settlements he claims are unfair is asking to side against John Goodson of Texarkana, one of Arkansas' best-known class-action practitioners, and 14 other lawyers in their appeal of a Fort Smith federal judge's reprimands.
In a motion filed Thursday, Ted Frank asks that his Center for Class Action Fairness be permitted to argue before the 8th Circuit Court of Appeals in St. Louis in favor of disciplinary sanctions handed down this month by Chief U.S. District Judge P.K. Holmes III.
"We think what the District Court did is important in protecting against class-action abuses," Frank said in an interview Thursday.
"It's really a systemic problem that class-action lawyers are structuring settlements so the lawyers get all the money and the class gets nothing," he said. "It's refreshing to see someone do something about it."
Holmes wrote in his ruling that the class-action lawyers' settlement of Adams v. United Services Automobile Association benefited the plaintiffs' lawyers and the insurance company at the expense of policyholders.
The lawyers moved the case from Holmes' federal court in 2015 after 17 months of litigation to settle in state court in Polk County, court records show.
State court judges aren't required to as aggressively scrutinize class-action settlements for fairness to all parties, Holmes said. He added that he would not have approved the settlement.
In an unusual "show-cause" proceeding, Holmes decided Aug. 3 to reprimand five of the attorneys, including Goodson, for "forum-shopping" the case to state court.
Goodson and the other lawyers have denied wrongdoing and are appealing Holmes' decision to the 8th Circuit. Attorneys for the lawyers declined to comment Thursday about Frank's filing or did not returns calls from the newspaper.
Holmes said that Goodson and the four other lawyers he reprimanded showed bad faith, having prior knowledge that their actions were wrong.
Those lawyers will have to disclose in certain cases that they have been disciplined for violations of federal court rules, legal experts say.
The other lawyers reprimanded are Goodson's law partner Matt Keil of Texarkana, Jason Roselius of Oklahoma City, and Richard Norman and Martin Weber Jr. of Houston.
Holmes criticized but did not reprimand the other plaintiff and defense attorneys in the Adams case. They also are appealing the judge's decision.
Holmes' ruling "appropriately sanctioned counsel for gamesmanship to evade federal judicial review, to the detriment of absent class member clients," according to Frank's motion.
Plaintiffs' lawyers received $1.85 million in fees and expenses in the case, court records show.
Only 4 percent of eligible policyholders filled out a lengthy form to claim part of the insurance company's estimated $3.44 million settlement pool.
The Center for Class Action Fairness, an arm of the nonprofit Competitive Enterprise Institute, should be allowed to argue in favor of Holmes' decision because all the other parties in the appeal will likely oppose it, the motion said.
"This court would not have the benefit of an adversarial appeal" without appointing the center to side with Holmes, Frank wrote.
Frank founded the Center for Class Action Fairness in 2009, according to the center's website, and has "won several landmark appeals and tens of millions of dollars for consumers and other plaintiffs through his class action work."
Holmes called for the show-cause proceeding after reading a December article in Arkansas Business newspaper saying the lawyers had moved the case to state court for settlement.
The judge demanded the attorneys "show cause" why he shouldn't sanction them. The judge questioned them during two court hearings and also issued the final ruling.
Frank said he wouldn't be surprised to see other groups apply to write briefs or argue in the 8th Circuit appeal, especially on behalf of the attorneys who were disciplined.
Goodson is a University of Arkansas System trustee and one of the state's biggest political-campaign donors. He is married to state Supreme Court Justice Courtney Goodson. He and lawyers who work with him also are among the biggest campaign contributors to elected members of the Arkansas Supreme Court.
Metro on 08/26/2016