FORT SMITH — A group of attorneys have asked a federal judge not to punish them next week for seeking a more favorable forum in a class-action lawsuit, arguing punishment would be unnecessary and overly harsh.
Thirteen attorneys in the 2014 case Adams v. United Services Automobile Association are to go before Chief U.S. District Judge P.K. Holmes III the morning of June 24 for a hearing on sanctions Holmes said he plans to impose on the attorneys.
The lawyers argued, among other things, that they did not act improperly, as Holmes had ruled, because federal judges in Arkansas and elsewhere allow forum shopping and federal appeals courts have upheld the practice. Additionally, the Federal Rules of Civil Procedure that guide their conduct were amended in 2003 to allow moving class-action lawsuits to courts where they can get more favorable treatment.
The attorneys pointed out that Holmes has discretion in handing out sanctions and asked him to spare them from punishment.
“‘In this day and age, sanctions are a badge of reprobation that can haunt an attorney throughout his or her career,'” the attorneys quoted a 2014 federal ruling. “‘They can have ramifications that go far beyond the particular case.'”
In Adams v. United Services Automobile Association, Holmes ruled that the lawyers improperly moved the case in mid-litigation from federal court, where he said he worked on the case for 17 months, to Polk County Circuit Court so they would face less scrutiny and could settle the case on more favorable terms.
Holmes ruled April 14 that the attorneys used the federal court for improper purposes, violating Rule 11 of the Federal Rules of Civil Procedures, through dismissal of the federal suit in mid-litigation to seek a more favorable forum and avoid an adverse decision.
Holmes found that the attorneys’ forum shopping was unreasonable and found evidence of improper and misleading conduct and, at times, bad faith.
“Respondents have jointly abused the federal court system through their conduct in this case,” Holmes wrote in the order.
Regarding sanctions, Holmes wrote in his ruling that he was considering ordering any of the attorneys whose Rule 11 violation was characterized by bad faith to file notice in any federal class action in which the attorney is representing a party that the attorney “has previously been sanctioned for improper conduct in connection with a class action settlement agreement.”
Attorneys whose violations are not characterized by bad faith, Holmes wrote, could face “an admonition, reprimand, caution, censure or similar sanction.”
Attorneys named in their memorandum concerning the imposition of sanctions filed in court Wednesday are Kenneth Castleberry, D. Matt Keil, Matthew L. Mustokoff, Timothy J. Myers, Richard E. Norman, William B. Putman, Jason Ernest Roselius, Stevan Earl Vowell, W.H. Taylor, A.F. Thompson III, Robert Martin Weber Jr., Stephen C. Engstrom and John C. Goodson.
Goodson of Texarkana has won millions of dollars in class actions in his home court in Miller County and elsewhere. He is a member of the University of Arkansas System board of trustees and is married to Arkansas Supreme Court Justice Courtney Goodson.
Holmes wrote in his April 14 order that at the June 24 hearing he would not reconsider his intentions to impose sanctions.
But in the 20-page memorandum, the attorneys argue that many Arkansas federal judges — including Susan O. Hickey, Billy Roy Wilson, Susan Webber Wright and Jimm Larry Hendren — have allowed procedures for which Holmes wants to punish the attorneys.
“In each case, the federal judge facilitated the process,” the memorandum says. “There was no reason for any of the respondents — all of whom were involved in at least one of these cases — to believe that the same conduct would be deemed sanctionable in this case.”
The memorandum says the sanctions would be unnecessary because Holmes stated in his order that the attorneys are unlikely to repeat their actions now that Holmes ruled they were “unequivocally improper.”
The attorneys also have been “punished severely” by many articles that have appeared to publicize Holmes’ ruling on the actions of the attorneys, the memorandum says.
The memorandum says articles have appeared in the Arkansas Democrat-Gazette, Forbes, ABA Journal, Reuters news service, Law360, Legal News Line, Arkansas Business, Arkansas Times, San Antonio Business Journal, San Antonio Express-News and Times Record.
The memorandum says the 8th U.S. Circuit Court of Appeals reversed sanctions imposed by a judge last year, ruling that once sanctions are made public, the damage to reputations, careers and future professional opportunities can be difficult to repair.
Source: www.arkansasonline.com
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