Class action lawsuits are big business. Companies and defense attorneys often complain that the class action plaintiffs’ bar, rather than actual plaintiffs, drive most class suits. One firm, however, may have gone too far. A lawsuit was recently filed against San Diego-based Newport Trial Group, alleging that the firm recruited class plaintiffs through unlawful payments and instructed them to give false testimony, Forbes.com reports. According to the complaint, Newport’s tactics have resulted in $300 million in settlements.
Companies should take particular notice of one of the firm’s alleged tactics — building a class by recruiting many individuals to take advantage of a small problem. “According to the lawsuit, Newport induced plaintiffs to call companies so they could file ‘Section 632.7’ complaints under California’s law requiring notice of recorded calls[.]” This is a good reminder to be vigilant — even a relatively minor lapse in compliance can snowball into a huge headache.