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Tuesday, April 5, 2016

Radcliffe v. Experian: District Court Did Not Err in Rejecting Effort to Disqualify Class Counsel after Court Found Conflict of Interest between Class Representatives and Class Members

In Radcliffe v. Experian Information Solutions Inc., 715 F.3d 1157 (9th Cir. 2013), the Ninth Circuit reversed a district court order approving the $45 million settlement of an action under the Fair Credit Reporting Act where: (a) the class representatives' enhancement awards were conditioned on their support of the settlement, creating a conflict of interest between them and the absent class members; and (b) the conditional incentive awards of $5,000 "significantly exceeded in amount what absent class members could expect to get upon settlement approval." The Court held that the settling class representatives ("Hernandez") and their attorneys ("Hernandez Counsel") did not represent adequately the absent class members in negotiating the settlement. The Court remanded to the district court to determine when the conflict arose, whether it would continue under any future settlement, and the extent to which Hernandez Counsel would be entitled to fees under any future settlement. 

In a new decision, Radcliffe v. Experian Information Solutions Inc. (9th Cir. 3/28/16), the Ninth Circuit revisited the case, holding that the district court did not err in refusing to disqualify Hernandez Counsel on remand. 
In this appeal, as they did in the district court, White Counsel contend that under California law, any conflict of interest in the representation of a class mandates automatic disqualification. Generally, California requires per se disqualification when an attorney has been shown to possess a simultaneous conflict of interest in her representation of multiple clients, regardless of that attorney’s motives or the actual impact of the conflict. The central question is whether this remains true in class actions. For the reasons set forth below, we conclude that California law does not require automatic disqualification in class action cases, and affirm.
The opinion is available here.

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