A legal writer for Reuters takes note of Arkansas Business’ reporting on unusual happenings with a class action case against an insurance company that had been in federal court in Fort Smith for months, but was suddenly removed to a state court for a speedy settlement that has been criticized as more beneficial to plaintiffs’ lawyers than to the damaged insurance policy holders.
Reuters examines more closely an angle we’ve mentioned in passing — this isn’t just about crafty techniques by John Goodson, W.H. Taylor, other Arkansas plaintiffs lawyers and a national class action firm (Kessler Topaz, which has played heavily in Arkansas judicial races). The lawyers for the insurance company were willing participants, too, perhaps because the $3 million-plus settlement terms, in the eyes of critics, will make it difficult for claimants to get much money. Lawyers will get as much as $1.8 million.
The history of class action suits is that lawyers like Goodson were making hay in friendly state courts; Congress passed a law to make it easier for insurance companies to transfer cases to federal court; the lawyers figured out a way to get back to state court by seeking damages of less than $5 million; the U.S. Supreme Court put a stop to this maneuver in a case won by insurance companies. The Reuters writer notes that insurance company lawyers who went along with the transfer of this latest case to Polk Circuit Court — Mitchell Williams and Robinson and Cole — had fought transfers to state court in the landmark Supreme Court ruling.
Federal Judge P.K. Holmes has ordered the attorneys to appear before him to explain what went on, though he’s already said he has no means to assess any money penalties agains them.