CHICAGO – A trio of alleged serial class action objectors are being accused of some very unclassy behavior.
On Dec.6 Edelson PC, a law firm with offices in Chicago and San Francisco, filed a lawsuit against three law offices, The Bandas Law Firm, Darrell Palmer Law Office and Noonan Perillo and Thut. The suit alleges that the defendants are guilty of a pattern of extorting monetary payments through abuse of the class objection system and by engaging in unscrupulous litigation and wire fraud.
The plaintiffs allege that Edelson PC was contacted by representatives of the defendant's over interstate wires with a threat to file a frivolous objection that would halt a class action lawsuit, unless the defendants were paid $225,000. It goes on to allege that Edelson paid the fee and the law firm is now seeking damages.
The complaint goes into further detail alleging that the defendants coordinated to file last minute, frivolous objections to class action settlements, expecting their objections to be overruled and then threatened to file with a higher court with the goal of convincing the counsel to pay them not to. The complaint goes on to alleges that in some cases this fee has been as much as $500,000. “This lawsuit alleges that, for years, the defendants have abused the class action objection mechanism in state and federal courts across the country,” Rafey Balabanian, managing partner at Edelson PC told the Southeast Texas Record. “While we strongly believe that objections can play a vital role in ensuring that class action settlements are carried out in the best interest of the class members. However, the conduct described in our complaint demonstrates an entirely different motivation. ”
Balabanian continued saying the defendant's demand for payment did not come with any requirement for changes to the settlement or request any benefit to the class members.
He went on to explain that class action objections made in good faith are made to change the settlement terms for the betterment of the class and/or to increase the value of the settlement. He cited the Google Anti-poaching case as an example of a class objection made in good faith.”In that case there was an original $325 million settlement,” Balabanian explained. “Some people objected, arguing that this amount was low and a new deal got put in place, increasing the settlement to $415 million.”
To prove their case Edelson PC plans to present evidence demonstrating the alleged extortion and wire fraud took place that will include communications between the entities that have paid the defendants and the defendants themselves, communications between all three defendants, payment agreements, the settlements and documents submitted to courts related to the objections. “The Prenda Law Firm porn-trolling offers some precedent for this lawsuit,” he added “In our case, instead of succumbing to these tactics, we chose to bring their conduct into the light and we are seeking to recover the money extracted from our firm as well as countless other entities.”
Balabanian concluded saying that in the time since he and his team filed their complaint they have received contacts from dozens of lawyers, from around the country, pledging both their support and their aid for the lawsuit.