Perhaps we shouldn’t rush to conclusions about this filing by plaintiffs’ counsel in Madison County, Ill., who are aiming a complaint under the federal RICO racketeering law against two lawyers and a Florida resident who had sought to block a $63.8 million class action settlement over the drug Paxil. After all, not all class action settlements are a bad deal for class members, some objections to such settlements are unmeritorious, and there are even some bad objectors out there who are more concerned with being paid to go away than with saving class members from a bad deal. Still, it may not take many treble-damage RICO suits before both types of objector, the helpful and the unhelpful alike, begin to reconsider showing up in court, will it? (Steve Gonzalez, “Plaintiffs in $63 million Paxil case claim ‘objectors’ violated RICO in new class action”, Madison County Record, Jun. 9). Update Oct. 7: suit dismissed without prejudice.
Object to a class action settlement, face a RICO suit
Perhaps we shouldn’t rush to conclusions about this filing by plaintiffs’ counsel in Madison County, Ill., who are aiming a complaint under the federal RICO racketeering law against two lawyers and a Florida resident who had sought to block a $63.8 million class action settlement over the drug Paxil. After all, not all class action […]
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Sounds like the creative version of California’s SLAPP legislation, which makes it against the law to use the courts and makes you pay for guessing when exactly it is allowed.
Just ask David N. what I mean!
“In the newer case, Hoormann and Kopsie accuse defendants who objected to the settlement, lawyers N. Albert Bacharach, Jr. and Paul S. Rothstein, and citizen Lillian Rogers, of ‘extortionate behavior’ that has caused damages to consumers across the country, while enriching the trio and their alleged co-conspirators with millions of dollars.”
The word “chutzpah” comes to mind, as this equally describes most consumer class actions filed by the Madison County plaintiffs’ bar. I almost hope they win just so the cause of action can be turned around against them.
Wow, that’s a poorly written article. It left me with no clue as to what the new defendants were alleged to have done or their alleged motivations.
Little help?
This confuses me somewhat. The RICO suit basically says that the objector lawyers filed a meritless suit with the goal of gaining money. And it alleges a continuing pattern. It could be said that securities law firms that file strike suits follow a similar pattern, along with many other types of plaintiffs attorneys that file suits looking for a quick settlement they do not deserve. Maybe a RICO claim should be a common counterclaim.
I am no fan of meritless lawsuits, but I thought that a lawyer filing such a suit faces civil and ethical code penalties, but that it is not an inherently illegal act. I guess there could be a theory of fraud/extortion, but I doubt the defendants were dumb enought to memorialize their state of mind in an email or memo. Otherwise, they could just plead laziness or negligence in filing the claim (by not verifying their client’s case) and not have the intent required for extortion. Again, a sanctionable action, but not a criminal enterprise subject to RICO.
I can’t afford the time to delve into either the underlying class or the RICO case. But if the objection is clearly meritless, why is the judge not saying something. Too much tortured litigation draws breath because the judge refuses to pull the plug. (Did I mix a metaphor there?) If the objection does have merit, especially if the argument goes to the claims of a few class members, the Court can structure opt-out provisions to address it. On the other hand, if the objectors are shown to be a traveling con-show, the judge should be actively spanking somebody. The RICO suit, to me, demonstrates that the judge is either not involved, or is not trusted by the other lawyers.
It is nice, by the way, to see someone acknowledge that not all class actions are bad. They do serve a valuable purpose. It is unfortunate that they have been so abused.