EAST ST. LOUIS – A class action objector pressing for disclosure of Trish Murphy’s fee from a $250 million settlement with State Farm, argues that a brief from Murphy’s colleagues proved that the fee belongs in the public record.
On Feb. 22, the lawyer for objector Lisa Marlow of Tennessee claimed they admitted that former district judge David Herndon reviewed their fee allocation behind closed doors.
“Although plaintiffs imply that inclusion in the record of materials considered by the court is discretionary, it is not,” wrote Mark Downton of Nashville, for Marlow.
“Documents that affect the disposition of federal litigation are presumptively open to public view.”
Trish Murphy shares a law firm in Marion with husband Patrick Murphy, a former federal judge who worked beside Herndon from 1998 to 2013.
State Farm and class counsel settled a racketeering class action for $250 million in September, with class counsel to receive a third.
Marlow objected to the fee, claiming class counsel could have settled for more.
At a hearing in December, Herndon offered reasons for settlement including the cost of rooms and meals for a trial that would have lasted two months.
He said Trish Murphy was from Southern Illinois but other lawyers came from far and wide.
Trish Murphy never appeared as counsel of record against State Farm.
Herndon struck Marlow’s objection, and Marlow appealed to Seventh Circuit appellate judges in Chicago.
Downton, who missed Herndon’s hearing, found Trish Murphy in a transcript.
He filed a motion at the Seventh Circuit to supplement the record by placing the fee allocation in it.
Seventh Circuit judges advised him to present the motion to the district court, and he did so on Feb. 6.
Downton wrote that an equal share for Murphy might mean $8 to $10 million, and asked if that was commensurate with her workload and contribution to expenses.
“When did she become involved?” Downton wrote. “What services did she perform?”
Herndon had retired by then, and Marlow’s motion landed on the bench of District Judge Michael Reagan.
On Feb. 15, class counsel Robert Nelson of San Francisco replied to the motion without mentioning Trish Murphy.
He wrote that class counsel submitted the allocation to Herndon in camera.
“Upon review, Judge Herndon did not direct that the document was to be included in the record or otherwise entered on the docket, even under seal,” Nelson wrote.
He wrote that Herndon properly determined the value of class counsel’s collective efforts and left the allocation to their discretion, and if Reagan should decide to allow access by Seventh Circuit judges, they should review it in camera.
Nelson further argued that Marlow waived her objection by not raising it soon enough.
Downton replied that Marlow couldn’t waive what she didn’t know.
He wrote that waiver requires intentional relinquishment or abandonment of a known right.
“In this case, however, plaintiffs’ secret dealings with the judge pretermit waiver arguments,” Downton wrote.
“Ms. Marlow would not know that the issue even existed because the court would not come to reference the allocation agreement and Ms. Murphy’s mysterious involvement as undisclosed counsel for plaintiffs until the transcript was made available.”
He wrote that the appeal implicates the propriety of the fee Herndon awarded.
“At this point, Ms. Marlow does not need to argue whether he should have relied upon the fee agreement,” Downton wrote.
“Judge Herndon appears to have done so, rightly or wrongly. It is undisputed that he ordered class counsel to produce the agreement, that he reviewed the agreement and then he referenced the agreement in his ruling on attorney fees.”
Downton opposed in camera inspection at the Seventh Circuit because it would continue to hide the agreement from the class.
“The last thing this case needs is more secrecy,” he wrote.
“Secrecy makes it difficult for the public to know who’s using the courts, to understand the grounds and motivations of a decision, why the case was brought and litigated, and what exactly was at stake in it.”
He wrote that inflated fees are endemic in class action litigation and that district judges must give beady eyed scrutiny to fee applications.
“Should the objector become aware that additional materials were provided to Judge Herndon off the record, objector may move for inclusion of those materials as well," Downton wrote.
"Plaintiffs, who complain of delay, may be well served to simply divulge the extent of their clandestine interactions with the court, as the record on appeal should include everything."
Reagan has set a hearing March 13.