Sit back and grab your popcorn. I’m about to tell you about a recent ruling involving a fight over a class settlement with the Tampa Bay Buccaneers in a junk fax TCPA class action. While this story might sound like it’s straight out of a Bravo reality TV show, it gives us a peek behind the curtain of this little slice of the plaintiffs’ bar, and comes with some interesting lessons on the duties owed by class counsel to the class.
In 2016, Medical & Chiropractic Clinic (“M&C”) sued attorney David Oppenheim (“Oppenheim”) and his employer Bock Law Firm (the “Bock Firm”) claiming that Oppenheim had breached his fiduciary duties to M&C, and that the Bock Firm aided and abetted this breach. Medical & Chiropractic Clinic, Inc. v. David M. Oppenheim, et al., No. 8:16-cv-1477-T-36CPT, 2018 WL 3707836 (M.D. Fla. Aug. 3, 2018). M&C was a client of Anderson + Wanca (“A+W”) where Oppenheim used to work before moving to Bock Law. According to the court, A+W frequently collaborated with other law firms, including Bock Law. Id. at *3.
The lawsuit by M&C stemmed from a 2013 class action suit filed by Cin-Q Automobiles (“Cin-Q”) against the Bucs involving some faxes sent by the Bucs in alleged violation of the TCPA. Id. at *2. Cin-Q was represented by A+W, where Oppenheim worked at the time. Id. at *2-3. In early 2014, M&C was added as a second proposed class representative in the case against the Bucs. Id. at *3. Oppenheim was involved in the case. Id. He had attended mediations and helped conduct class settlement negotiations. Id.
In the midst of class certification proceedings in the Bucs case, the Bock Firm hired Oppenheim. Id. at *3-4. After joining the Bock Firm, Oppenheim got to talking with Bock about the Bucs case. Id. at *4. According to the court, Oppenheim told Bock in a series of e-mails that A+W was shooting to “set a record settlement” that was above the $75M settlement reached earlier in the year in another TCPA class action. Id. Bock told Oppenheim that his duty was to the class, “not to [M&C] and [referring to M&C’s counsel, A+W,] certainly not to some greedy asshole who is not a class member and is just sitting in an office in [R]olling Meadows.” Id. (internal brackets original). As stated in the M&C ruling, Bock then e-mailed the rest of the attorneys at his firm proposing that the Bock Firm could find its own class representative and separately approach the Bucs about settling. Id. “Lol,” Bock wrote. Id. Pot? Kettle? Black?
“Lol” indeed, because the Bock Firm eventually found another class representative – Technology Training Associates (“TTA”) – and filed a separate lawsuit against the Bucs that asserted the same class claims as the pending case filed by Cin-Q and M&C. Id. The Bock Firm then negotiated a class-wide settlement with the Bucs separately for a fund of $19.5 million. Id. at *4-5. After catching wind of this, A+W moved to have Cin-Q and M&C intervene in the TTA action. Id. at *5. However, the motion to intervene was denied, and the court granted preliminary approval of the $19.5 million settlement between the Bucs and TTA. I d.
A+W appealed the decision to the Eleventh Circuit, and the Eleventh Circuit reversed finding that the interests of Cin-Q, and TTA were sufficiently adverse to merit intervention. Id. at *6 (citing to Tech. Training Assocs., Inc. et al. v. Buccaneers Ltd. P’ship, 874 F.3d 692 (11th Cir. 2017)). Specifically, TTA had a statute of limitations problem with its claim, while Cin-Q did not, which had the potential of impacting the settlement value of the case for the class. Id. What’s more, the Eleventh Circuit found in its opinion that intervention was warranted because the Bock Firm “deliberately underbid” the Cin-Q plaintiffs, was apparently “motivated by a desire to grab attorney’s fees,” and may have “violated its ethical duties to the class.” Id. Ouch. So Cin-Q was allowed to intervene in the TTA case. And once it did, it moved to vacate the preliminary approval of the settlement reached by TTA and the Bock Firm, to consolidate the actions, and be named as class counsel. Id.; see also Id. at *11. That motion is still pending.
Meanwhile, M&C – now represented by a well-known biglaw firm – sued Oppenheim and the Bock Firm, claiming that Oppenheim violated his fiduciary duties to M&C in its representation of the “materially adverse” party TTA. Id. at *8. Oppenheim and Bock moved for summary judgment, arguing that Oppenheim did not owe M&C an individual or special fiduciary duty and, even if he did, he did not breach his duty.
The court started by examining whether there was a special fiduciary duty owed by Oppenheim to M&C. Guiding the court’s analysis was the fact that the “duty owed to class clients differs significantly from the duty owed in an individual representation case.” Id. at *9. In the class context, the “class counsel’s duty, above all, is to the class members as a whole and not to any particular named plaintiff,” and that duty is owed “regardless of whether the class has yet been certified.” Id. The court also noted the absence of any authority that suggests “an attorney-client relationship between named class plaintiffs and class counsel displaces the duty owed to a putative class.” Id. While M&C relied heavily on the Florida Rules of Professional Conduct, the court found that those rules are all the in the context of “individual representation”, and therefore did not provide a basis for a fiduciary duty owed by Oppenheim to M&C individually, in class action litigation. Id. at *10.
The court found some hypocrisy to M&C’s position too. If the Florida Rules applied, and assuming TTA and M&C were “materially adverse” as M&C contended, those rules would prohibit A+W’s representation of both TTA and M&C. Id. at *11. Yet, the court found this was exactly what A+W was trying to accomplish in moving to consolidate the TTA and Cin-Q cases, and seeking to have it appointed as class counsel. Id. The court stated that the fact “M&C takes no issue with A+W representing its alleged adversary begs the question of M&C’s motivation in this litigation.” Id.
Based on its findings, the court concluded that Oppenheim did not owe M&C a separate or special duty independent from the duty he owed to the class. Id. at *12. And the question before the Court was not whether Oppenheim breached his duties to the class – that would be for the court to determine in the underlying class action case – but whether Oppenheim owed a separate duty to M&C as the class representative. In the context of a class action, the court held that this duty was no different to the named representative, M&C, than it was to the class as a whole. Id. And the court ruled that M&C’s claims failed because it could not establish the existence of the separate fiduciary duty it claimed it was owed by Oppenheimer. Id.
The court also found that, even if there was a separate fiduciary duty, there was no evidence Oppenheimer breached it. Id. at *13. TTA and M&C were not “materially adverse” parties to begin with. Id. They both sought the same general outcome against the same defendant, and M&C’s argument was again undermined by the fact that A+W was itself trying to represent both TTA and M&C in a combined action. Id. at *13-14. And regardless, there was no evidence that Oppenheimer had disclosed any confidential or privileged information relating to his individual representation of M&C. Id. at *14. If anything, the information he discussed with Bock about A+W’s ambition to set a “record” settlement “deals [at best] with class counsels’ efforts to obtain a settlement for the class.” Id.
What a tale. This story really has it all. Greed. Betrayal. Hypocrisy. But aside from the juicy details of this claws-out brawl between plaintiffs’ lawyers, there’s a good lesson here on ethical duties in the context of a class action. Over and above anything, class counsel owes duties to the class as a whole. Not to their pocketbook. Not to any individual named representative. But the class. Were those duties met in this case? This question is now left up to the court in the underlying class proceedings to decide. Let’s see who gets the last “lol”.