CHICAGO (Legal Newsline) - A law firm that called Ted Frank of the Center for Class Action Fairness a “notorious professional objector” has asked the U.S. Court of Appeals for the Seventh Circuit to dismiss Frank’s motion for sanctions, dismissing its description as a “mild flourish.”
Bernstein Litowitz is fighting to preserve an $11 million fee it was awarded in a class action settlement with Stericycle over alleged overcharges. Frank’s CCAF represents objector Mark Petri, who says the fee is excessive. They are also seeking information about how class counsel were appointed by the lead plaintiffs, pension funds in Mississippi and Arkansas that have a history of handing class action work to firms that contribute to the political campaigns of state officials.
In a filing this week rebutting Frank’s motion for sanctions, Bernstein Litowitz partners John C. Browne and Adam Wierzbowski say their description of Frank and CCAF was accurate and supported by published rulings by several courts.
Frank “supports himself by filing scores of ideologically-driven objections to class action settlements and fee awards,” Bernstein Litowitz said in response to Frank’s Nov. 20 motion.
“Even at its worst, `notorious’ is little more than a mild flourish that in any rational world fails to justify the waste and distraction of a sanctions motion.”
The late U.S. Supreme Court Justice Ruth Bader Ginsburg accepted the term “notorious” with “levity and grace” after some started calling her “Notorious RBG,” they wrote. Frank is using the sanctions motion “to suppress and control the dialogue” in the press and in court.
CCAF, now part of the Hamilton Lincoln Law Institute, formerly belonged to the Competitive Enterprise Institute, a conservative organization that draws much of its funding from corporate donors. It has always been nonprofit and its lawyers work on salary with no bonus if the group is awarded fees by the court. CCAF does not accept corporate donations.
In his motion for sanctions, Frank said Bernstein Litowitz had made “express accusations of wrongdoing” when they tagged him as a “notorious professional objector.” The term is used to “describe attorneys who persistently bring baseless objections and then threaten to hold up settlements unless they are paid to go away,” Frank said.
“Petri would prefer to ignore this collateral issue entirely,” he said, but Bernstein Litowitz makes similar allegations routinely and sometimes they work. In a case involving the Equifax data breach the court imposed a punitive appeal bond based upon Frank and his client, for example, which CCAF is appealing.
In the Stericycle case, objector Petri says lawyers are taking too large a share of the $45 million settlement they negotiated in February 2019 and may have gotten the work because of political connections. Plaintiff lawyers bombarded Stericycle with class actions after the company settled state and federal cases accusing it of imposing automatic price increases on customers.
Bernstein Litowitz won the role of lead law firm representing Mississippi and the Arkansas teachers’ pension plan and later disclosed the involvement of Gadow Tyler, a Mississippi law firm that primarily handles consumer bankruptcies; and Klausner, Kaufman, Jensen & Levinson, a labor and employment firm with numerous pension funds as clients. They negotiated the settlement in February 2019 before beginning the expensive and time-consuming process of pretrial discovery.
In a filing last year, Petri and CCAF requested their own discovery into the hourly billing and expenses of the plaintiff law firms, which the court denied, saying it would only delay settlement. The court said they hadn’t provided any evidence of the kickbacks they wanted to investigate.
Petri and CCAF noted Bernstein Litowitz and Gadow Tyler were heavy contributors to Mississippi Attorney General Jim Hood, who exercises complete control over securities litigation by the state. Bernstein Litowitz and its partners have contributed more than $160,000 to Hood’s campaigns over the years, CCAF said, plus $100,000 to the Democratic Attorney Generals Association in 2015, a year when Hood was the only recipient of DAGA funds. Gadow Tyler gave $100,000 to DAGA that same year, CCAF said.
In 2016, a former Bernstein Litowitz lawyer accused the firm of paying more than $100,000 to an attorney and wife of a member of Hood’s staff. The Arkansas teachers fund is embroiled in a long-running scandal over the State Street securities case, where a competing law firm, Labaton Sucharow, paid $4.1 million in fees to a politically connected Texas lawyer who did no work on the case.
Bernstein Litowitz, in its latest filing, said CCAF’s appeal “lacks merit” and the bid for sanctions baseless. Sanctions over legal misbehavior are reserved for egregious cases, the firm said, such as when a lawyer said the defendant “dances to the antebellum music of a kangaroo court band playing to the script of off tune frivolity.”
The plaintiffs in the Stericyle case are ”entitled to put truthful information before the court, particularly when other courts have found this type of information relevant,” they said.