Justice promoted by class action lawyer competition, judge rules

NEWARK, N.J. – Upholding free market principles, U.S. District Judge Jose Linares ruled that competition among class action lawyers promotes justice.

In a Sept. 10 order he blessed "reverse auctions," where defendants drive settlement costs down by bargaining with different lawyers in different courts.

He rejected a bid from lawyers in California litigation against telephone company T-Mobile for 80 percent of fees from a settlement T-Mobile reached with other lawyers in his court.

He slashed the 80 percent request of the Bursor and Plutzik firms to 16 percent, California's share of the settlement, awarding them $720,000 from a $4.5 million fee.

He warned that granting the most credit for a settlement to the lawyer who sued first would wreak havoc on class action practice.

He wrote that an 80 percent claim would act as a disincentive against new suits.

"In the end, T-Mobile would be forced to settle with the Bursor and Plutzik groups or not at all," he wrote.

"In fact, adopting the Bursor and Plutzik groups' position in this case would ostensibly allow them to prevent attorneys from filing related actions in different jurisdictions altogether," he wrote.

"This argument is as aggressive as it is untenable," he wrote.

Linares approved a February settlement of claims that T-Mobile improperly charged $200 fees for early terminations of service contracts.

T-Mobile agreed to pay the class $13.5 million, plus a third of that to lawyers.

Linares awarded 84 percent of the fee, $3,780,000, to those who settled in his court.

He blistered one of them, Paul Weiss of Chicago, who for the past 10 years has pursued class actions in Madison County among other courts.

Linares rejected all expenses Weiss claimed, more than $40,000.

He declared Weiss's statement of hours "facially untenable."

Linares wrote, "He claims to have taken primary responsibility for the uploading and reviewing of over 140,000 documents produced by T-Mobile after preliminary approval of the settlement."

Weiss counted hours from other cases where, Linares wrote, "nothing has taken place."

In a similar case involving Weiss and associates, Linares granted preliminary approval last year to a settlement of early termination claims against Sprint.

A motion for final approval in that case remains pending.