The decision in Standard Fire Insurance Co. v. Knowles was 9-0, Justice Breyer writing for the Court, and signals’ Justices’ impatience with lawyerly gamesmanship intended to evade CAFA (the Class Action Fairness Act of 2005). I’ve got a short commentary at Cato, which filed an amicus brief on the side that prevailed [decision in PDF, background at SCOTUSBlog, earlier here etc., my new Cato post; more on stage hooks](& SCOTUSBlog, Ted Frank/PoL (“Miller County [Arkansas] trial lawyers had collected hundreds of millions of dollars of legal fees from forum-shopped class-action settlements; the class members whom they purportedly represented likely didn’t even get 10% as much.”))
More: Andrew Trask (“The Supreme Court is envisioning the class action as a procedural aggregation device, rather than a corporate deterrent or a trust-like entity. This is good news for defendants.”); Alison Frankel, Reuters. And I’m quoted on the case in Alex Daniels’ account in the March 20 Arkansas Democrat-Gazette (sub-only).
We blogged about this case in 2008, and now Fort Worth Star-Telegram columnist Dave Lieber has turned it into a book. From the description:
A newspaper columnist investigates the shenanigans of a small-town police department — then pays a price for it. After he orders his misbehaving 11-year-old son to walk home from a local restaurant, police arrest the dad for two felony counts. A true-story thriller about parental responsibility, small-town corruption and the consequences of being a public figure.
And: should an Arkansas mother whose son had been thrown off the regular school bus for misbehavior face child endangerment charges for making him walk 4.5 miles to school instead? [Alkon] From Australia, should police warn parents for letting a 7-year-old visit a local shop alone, and a 10-year-old ride a bus unaccompanied? [Sydney Morning Herald via Skenazy]
Further on stories we’ve noted in the past:
- Objectors including CCAF and CEI challenge Cobell Indian trust settlement [Legal Times, PoL, earlier]
- Post-mortems continue on Ohio S.B. 5 labor measure [Daniel DiSalvo, Christian Schneider, earlier]
- More on divorced man’s dogged pursuit of case against wedding photographer [Above the Law, earlier]
- Arkansas AG McDaniel: I’ll stop steering cy pres funds to charities [Arkansas Project, PoL, earlier]
- Rochester: “Police Union Punishes DA’s Office for Not Illegally Charging Woman Who Recorded Cops” [Radley Balko, earlier]
- “Men at Work lose appeal over Kookaburra riff” [Guardian via Legal Blog Watch, earlier here, etc.]
- Wash. Supreme Court overturns woman’s horn-honking conviction [Seattle Times, opinion PDF, earlier here, here]
It’s surprising there isn’t more controversy over state AGs’ frequent practice of using moneys from lawsuit settlements for their own favored causes (as opposed to, say, handing it over to the state treasury). Now Arkansas AG Dustin McDaniel is drawing criticism for his funneling of cy pres funds to politically advantageous causes that don’t happen to have been voted appropriations by the state legislature [John Brummett, Arkansas News; Dan Greenberg, The Arkansas Project, and followup]
P.S. Related on cy pres in private class actions: Dan Popeo, WLF (Google Buzz settlement); Michael Tremoglie, LNL; Ted Frank.
Pruett Nance was hurt riding an all-terrain vehicle on the grounds of a no-longer-operating theme park in Arkansas, Dogpatch USA. The owners having not paid a $650,000 judgment, a judge has awarded Nance ownership of the park. [Arkansas Online via Childs, TortsProf]
Arkansas Attorney General Dustin McDaniel has bestowed $100,000 to assist in construction of the Arkansas Fallen Firefighters Memorial on the grounds of the state Capitol. The money came from the settlement of a lawsuit against the Pfizer drug concern, the connection of which to the cause of fallen firefighters is at best obscure. [Arkansas Online]
The Arkansas plaintiff’s lawyer says he was too embarrassed to make layoffs as his finances turned sour, which is why he stole the $9.3 million in class-action settlement funds [WSJ Law Blog, ABA Journal] Earlier here, here, and here.
More from Kevin LaCroix:
An earlier WSJ.com Law Blog post reported (here) that Cauley was in fact a protégé of Bill Lerach. Today’s article on Bloomberg (here) about Cauley’s criminal sentencing notes that Cauley joins a growing list of plaintiffs’ securities class action attorneys who have “been jailed for felonies,” including Bill Lerach himself and his former law partners, Mel Weiss, Steven Schulman and David Bershad, and including even Marc Dreier.
These gentlemen of course made their living for many years accusing corporate officials of fraud. Ahem. Yes, well…isn’t ironic, don’t you think?
Who would have dreamed that a protege of Bill Lerach would wind up later copping to a felony rap resulting from ethical infractions? (Wait, don’t answer.)
At a barbershop in 1994, [Cauley] says, he picked up Forbes magazine and saw a profile of Lerach; it was the famous article, where the attorney was quoted as saying, “I have the greatest practice . . . I have no clients.”
Cauley approached Lerach and was soon launched in a thriving class action practice (“His usual way to deal with things was to yell and bang things and threaten,” said a fellow plaintiffs lawyer, Glen DeValerio of Boston.) It came crashing down under revelations that the Little Rock, Ark.-based lawyer took $9 million from clients’ settlements to spend on firm overhead and unrelated investments. [Koppel/WSJ, ABA Journal, interview-based WSJ Law Blog story first, second]
According to Manhattan D.A. Robert Morgenthau, New York lawyer Marc Bernstein “settled these cases pretty cheap, then took the money and ran.” [NY Daily News, press release] Meanwhile: “Prominent Arkansas plaintiffs securities lawyer Gene Cauley is expected to plead guilty for failing to pay clients $9.3 million in settlement funds he was supposed to be holding as their escrow agent.” [ABA Journal, earlier] According to a report dated February (PDF) from the ABA’s Center for Professional Responsibility, New York is among the states that have adopted payee notification reforms intended to catch this category of fraud at an early stage; Arkansas has not. For more on payee notification, see my 2006 paper with Peter Morin.