Key Players In Prenda Lawsuits Also Involved In Questionable 'Class Action' Objections
from the digging-into-the-corners-of-the-law dept
Now, as we've noted many times in the past, the whole class action process is, in fact, regularly abused by the class action lawyers themselves -- such that settlements often fail to benefit the class, but instead just make the lawyers rich. We've also noted that nearly everyone involved in a class action lawsuit has incentives to push aside any objections to the settlement to get the case done. It appears that, in response to this knowledge, a group of "professional objectors" have been showing up in court cases, hoping to get some money to go away and remove their objection. Now, we wholeheartedly support the ability to protest a class action settlement, especially when that process is being abused. But it's not surprising to see abuse on the other side too -- and FCT highlights some interesting facts about Gibbs and various Hansmeiers not just showing up in a bunch of cases, but being called out for questionable behavior.
FCT points to three such cases, all of which, at the very least, raise questions about whether or not Brett Gibbs and Paul Hansmeier are playing "professional objector" games. As some have noted, it appears that Hansmeier has even set up an operation called the Class Action Justice Institute, with the same address as his law firm (the Alpha Law Firm), supposedly related around class actions.
The three cases don't seem to go well for Gibbs and Hansmeier. In two cases, Hansmeier's wife, Padraigin Browne, is named as the official objector, and in the third it's Hansmeier's father. The objections are all filed by Brett Gibbs. Some of the documents are pretty damning. In the case involving Hansmeier's father, Gordon Hansmeier, they're objecting to a class action settlement involving Hertz Corporation. Paul Hansmeier sent a letter to the lawyer representing the class, in which he flat out offers to go away for $30,000.
This letter is to advise you that an objection will be filed to your proposed settlement. I am enclosing a draft of the objection to be filed, which you have previously had an opportunity to review. This (or a similar version) will be filed if you do not attempt to resolve this matter. We find that settlements like this are likely to be rejected following our participation, as was the result today in In re Groupon, No. 11-md- 02238 (S.D. Cal.) (Dkt. No. 97).The lawyer for the class, quite reasonably responded harshly that this sort of letter made clear Hansmeier's true purpose in objecting. He also points back to Hansmeier objecting similarly in a different class action case (involving Groupon) pointing out how this is evidence of a "pattern of conduct" that might be seen as done for an "improper purpose."
I will extend to you an offer to settle this matter with my client for $30,000.00 if the settlement terms are reached by 5:00 PM CST on Monday, Oct. 1, 2012. If you reject this settlement and the objection is filed, the offer to o settle is revoked and will not be extended at the pre-filing settlement amount.
Govern yourself accordingly.
In our view, if you present this objection, it is clear that it will have been presented for an “improper purpose” under Fed R. Civ. P. Rule 11(b)(1). Our view is further informed by the fact that the practice of contacting class counsel with draft objections and inviting them to “discuss them” (i.e. resolve them by making an unjustified payment to the objectors’ lawyers) in advance of filing in the hope of gaining an unjustified payment beyond any legitimate class member’s claim appears from the Record in Groupon to be a pattern of conduct.In response, Gibbs claimed that the lawyer for the class was acting improperly and sought to have him removed from the case (and to substitute themselves).
Please be advised that we consider this conduct to be improper and sanctionable under 28 U.S.C.A. § 1927 and Rule 11.
Eventually this leads to quite a ruling, in which the court rejects Gibbs/Hansmeier's attempt to get that lawyer kicked off of the case. The full ruling is well worth reading. It mostly knocks Gibbs for the timing of filings. The objection was filed at the latest date possible. The attempt to remove the lawyer was filed late. He sat on the claims of "inappropriate behavior" for much longer than was reasonable, etc. But, more importantly, the court sees a pretty obvious suggestion of attempted gamemanship, rather than any legitimate reason for participating in this case. In fact, he notes that if anyone was acting improperly, it was Gibbs and Hansmeier, not the lawyers for the class.
Further, having reviewed the “Underlying Motion,” it is apparent that it is without merit and would not succeed even it were allowed to proceed. It appears a significant disconnect exists between Objector’s perception of the events that transpired in the days leading to the objection deadline, the nature of his counsel’s involvement and conduct, and the nature and purpose of class counsel’s response. In reviewing the letters between Objector’s counsel and class counsel, the only “bold and improper” conduct the Court can identify is Objector’s counsel’s attempt to extract $30,000, from class counsel in exchange for Objector not filing objections that Objector’s counsel suggested could derail approval of the class settlement and award of attorneys’ fees. Objector now wishes to use his own counsel’s questionable conduct and class counsel’s measured response–which Objector recharacterizes in a strained attempt to ascribe misconduct and ill will to class counsel–as a springboard to attack the class counsel’s motivation and mightily strains to manufacture violations of rights related to “certain actions by co-Lead Counsel for the class and their implications regarding notice and due process of law.” Even if the Court were to allow the eventual filing of the “Underlying Motion” and consider Objector’s request to remove Mr. Stewart as class counsel, the Court would find no basis to do so. Nor would the Court find it necessary or justified to appoint “ad litem counsel to protect absent class members from the sort of behavior [i.e., Mr. Stewart’s behavior] described herein.” Further still, even if such a need existed, the Court certainly would not appoint Objector’s counsel as co-lead class counsel based on the sort of behavior the letters exhibit.That's a benchslap.
In another case, involving a Netflix class action, again involving Hansmeier's wife, we see accusations that seem quite familiar from various Prenda-related cases. As in the Hertz case, Gibbs is accused of filing a motion just as the time is about to expire. What's interesting here is that one of the lawyers for the case, in pushing back against the objection notes that he received a phone call from people claiming to work for "Brett Gibbs Law Offices," but they seem to get skittish when the lawyer asks for Gibbs email or for any info on Gibbs at all. In looking online, he found out something... interesting:
I asked them for Mr. Gibb's e-mail address. Strangely, the individuals seemed startled by this request and immediately (in a somewhat panicked way) replied that they didn't need the objection sent after all.The lawyer who filed this declaration, Jay Edelson, then notes that he sent Gibbs an email detailing these concerns, and Gibbs, in true Gibbs-fashion (as we've seen before) refuses to respond to the claims, but rather lashes out at Edelson accusing him of unprofessional behavior. This seems to be a recurring theme. Every time anyone points out unprofessional behavior by Gibbs, he returns the favor, claiming that their very action in calling him out is somehow unprofessional. This strategy doesn't seem to ever work. You'd think he'd learn to stop it.
This reaction raised suspicions and led me to inquire if the "Brett Gibbs Law Offices" even existed, and whether these individuals worked with Mr. Gibbs at all. The individuals then abruptly--and without explanation--hung up the phone.
After the phone call ended, my firm researched Mr. Gibbs, his practice, and the facts relating to the phone call. We determined that "Brett Gibbs Law Offices" does not appear to exist as a legal entity, that the associates who contacted me regarding Brown's objection did not work at "Brett Gibbs Law Offices," and that the phone number the individuals called from is a number used by Prenda Law--a firm at which Mr. Gibbs is "Of Counsel"--to contact defendants that are the target of Prenda Law's mass copyright infringement lawsuits brought on behalf of pornography studios. Based on the information available, we believed that the men who called were actually associates of Mr. Gibb's at Prenda Law and had been instructed to misrepresent their affiliation.
While these are different types of cases, we once again see Hansmeier and Gibbs engaged in what appears to be a strong pattern of behavior.