Defense Counsel Disqualified from Barnes & Noble Class Action

Alameda County Superior Court Judge Steven Brick has disqualified Jackson Lewis from representing Barnes & Noble in a wage and hour class action, after Jackson Lewis negotiated a settlement with the named class plaintiff. The situation is unusual because the plaintiff, Sara Minor, first filed an individual wrongful termination action against Barnes & Noble, then retained counsel to represent her in an class action alleging that Barnes & Noble illegally pays its employees with out-of-state checks. The trouble arose because Jackson Lewis negotiated an individual settlement with Ms. Minor that required her to withdraw as class representative, and class counsel alleged that Jackson Lewis did not advise her of this aspect of the negotiations. Law.com, which reported on the disqualification order here, noted: 

In his tentative ruling, Brick noted that Jackson Lewis had put Minor's lawyer, Amy Carlson of San Jose firm Williams, Pinelli & Cullen, in an ethically compromising position and "intruded upon the attorney-client relationship between Minor and class counsel without the consent of class counsel, thereby threatening that relationship."

Are ex parte communications with represented parties becoming more of a problem? Earlier this year, the State Bar suspended an attorney who directed his client's direct settlement negotiations with the plaintiffs in a wage and hour case. See our post here. 

State Bar Suspends Attorney for Improper Communications with Represented Parties

The State Bar of California recently suspended an attorney who directed his client's direct settlement negotiations with the plaintiffs in a wage and hour case. Unfortunately, we have seen quite a bit of this type of activity in the last two years. I am posting this report as a cautionary tale for any attorneys who may be tempted to engage in such tactics. This report appeared originally in California Lawyer magazine (http://www.callawyer.com/discipline.cfm?CLDisciplineTypeID=3).

Suspended: Jonathan Wesley Birdt, State Bar #183908, Los Angeles (October 6, 2009).

Birdt, 39, was suspended for 30 days and placed on two years of probation for communicating with a represented party and engaging in acts of moral turpitude, dishonesty, or corruption.

In 2004 Birdt worked for a law firm that defended a company in a suit filed by nine employees for wage-and-hour violations. In July 2005 the company’s director of operations met with Birdt to discuss the case. During the meeting, Birdt said he could not speak directly with the plaintiffs, but the director could do so and would be paid to convince each of the plaintiffs to settle the case. He also requested that the director have each plaintiff sign a release prepared by Birdt. Four of the plaintiffs signed releases. Birdt did not have authority from the plaintiffs’ attorney to enter into a settlement with the company.

The next month the plaintiffs’ attorney filed an ex parte application for an order to stop Birdt from communicating further with the plaintiffs. Birdt filed an opposition, including his declaration that the director negotiated directly with the plaintiffs without his involvement in the settlement process. The State Bar found that Birdt made misleading statements to the court, and by doing so engaged in acts of moral turpitude, dishonesty, or corruption.

In aggravation, the misconduct caused significant harm to the public and to the administration of justice. In mitigation, Birdt cooperated with the State Bar by entering into a stipulation.

The order took effect November 5, 2009.

Lawyer Can't Sue Lawyer for Fraud Based on "Approval" of Agreement

This is not a wage and hour issue, but it struck me as being so ridiculous that I had to write about it.

The signature block on a contract bears an attorney signature under the legend “approved as to form and content.” Does that signature amount to an actionable representation to an opposing party's attorney? We conclude that it does not.

Thus starts the Second District Court of Appeal's decision in Freedman v. Brutzkus, ___ Cal. App. 4th ___, 2010 WL 820478 (March 11, 2010). Mr. Brutzkus represented a client in negotiating a trademark licensing agreement. Mr. Brutzkus and the other party's counsel, Mr. Freedman, executed the agreement under the line, "Approved as to Form and Content." After the agreement fell apart, Mr. Freedman sued Mr. Brutzkus, alleging that:

Brutzkus made an actionable representation to Freedman as to the accuracy of the agreement. Freedman pled causes of action for intentional misrepresentation, fraudulent concealment, and fraudulent inducement that rested on Brutzkus's alleged misrepresentation in approving the agreement “as to form and content.” The trial court sustained respondents' demurrer as to all causes of action without leave to amend, and entered judgment for respondents. Freedman filed a timely

appeal from the judgment.

Slip op. at 4.

We conclude that the only reasonable meaning to be given to a recital that counsel approves the agreement as to form and content, is that the attorney, in so stating, asserts that he or she is the attorney for his or her particular party, and that the document is in the proper form and embodies the deal that was made between the parties.

Slip op. at 5-6.

Even though the Court of Appeal came to the (obviously) correct conclusion, maybe it is time that we as lawyers reconsider "approving" our clients' agreements. What are we approving, anyway? I don't want to get into a Roseanne Roseannadanna-style rant, but what's the point? It's the parties' agreement, not the attorneys'. We as lawyers give our best advice, but at the end of the day, it's the client who has to decide whether to enter into a particular agreement or not. The lawyer's "approval" adds nothing.

Court of Appeal Does an Emily Litella

Do you remember Emily Litella? The brilliant and amazing Gilda Radner played her on Saturday Night Live's Weekend Update. She would come in and say things like, "What's all this fuss about Soviet Jewelry?" or "What's all this fuss about violins on television?"

The Court of Appeal just had a real Emily Litella moment. Last week, I blogged about Martorana v. Marlin & Saltzman, holding that a class member who fails to submit a settlement claim form can't sue class counsel. Yesterday, the Court modified its decision. Here is the full text of the modification:

On pages 2 and 3, the last sentence: "After several years of litigation, the parties in the Sekly action agreed to a class action settlement totaling $1.2 million." The sentence should read: "after several years of litigation, the parties in the Sekly action agreed to a class action settlement totaling $120 million."

"Oh. That's different."