We have written a number of blog posts about Judge Quackenbush’s displeasure with certain class counsel arising from a request for an award of attorneys’ fees, costs, and expenses submitted in the U.S. District Court for the Eastern District of Washington in Plumbers Union Local No. 12 Pension Fund v. Ambassadors Group Inc., No. CV-09-214 (E.D. Wash.). During hearings on the request, the Court discovered that class counsel’s declarations had misrepresented the amounts counsel actually paid out for a number of items and included what the Court considered to be inappropriate expense (click here and here to read more). Following formal disciplinary proceedings that the Court initiated against plaintiff’s counsel, the Court issued an Order of Reproval of one attorney and an Admonition to another on July 25, 2012.  Plumbers Union Local No. 12 Pension Fund v. Ambassadors Group Inc., No. CV-09-214, 2012 U.S. Dist. LEXIS 73297 (E.D. Wash. July 25, 2012). 

In the proceedings, the two individual counsels and the firm were separately represented. The Court addressed the culpability of each party separately. The Court focused most attention on the “settlement partner” who had the best knowledge of the relevant facts and who had submitted a declaration under penalty of perjury that contained misleading statements.  Specifically, the settlement partner’s declaration stated that “[m]y firm incurred a total of $223,095.46 in expenses in connection with the prosecution of this action,” and included as a “disbursement” a reference to “Investigators” in the amount of $125,935. The Court noted that this representation in particular “was not true and correct.” Id. at *2. Judge Quackenbush noted an additional disparity in the claimed and actual disbursement for the “Economic Damage Analysts.” Id.

The Court expressly rejected class counsel’s contentions that these misstatements were a result of “oversight” or “innocent error.” Id. at *3. In a finding of fact that underlies the disciplinary decision, the Court determined that these representations “were at a minimum a reckless disregard for the truth thereof and violated the obligation of candor by counsel to the court.” Id. Moreover, the Court was not persuaded to excuse the settlement partner’s action because she “may have been influenced” by her husband’s terminal illness. Noting that the settlement partner had been the subject of another Court’s finding of a misleading statement, Judge Quackenbush found that this prior issue “should have caused [the settlement partner] to avoid ever again being in the position of having to defend unsubstantiated or misleading expense claims.” Id. at *4. The Court thus issued the Order of Reproval and directed that the order “be public and forwarded to the California State Bar Association,” which had licensed the settlement partner. Id.

Concerning the role of litigation counsel in the matter, the Court pointed out that this attorney had not specifically listed each “Disbursement” in his own initial declaration, and thus the Court “might understand that [he] was then relying on” the settlement partner’s declaration in her role as settlement counsel. Id. at *2. “However, once the Court raised the issue of the accuracy of the alleged ‘Disbursements’ set forth in [settlement counsel’s] Declaration, [litigation counsel] failed to personally investigate those claims and, in fact, filed another Declaration supporting the inaccurate investigator disbursements.” Id. at *5. That failure violated litigation counsel’s obligation to “correct a false statement of material fact” and was the basis of the Court’s decision to admonish litigation counsel. Id.

The most pertinent takeaway from this installment of the Wine and Roses saga arises from the Court’s discussion if its decision not to discipline the firm itself. In contrast to the “excuses” approach taken by the settlement and litigation partners, the law firm presented a number of actions it had taken in an effort to ensure that firm attorneys were forthcoming with courts on fee and expense requests in the future. First, the firm advised the settlement partner that she was no longer authorized to submit fee or expense applications on behalf of the firm, and that she would retire from the firm on July 31, 2012. Second, the firm scheduled a continuing legal education program for all of its attorneys and staff on billing, expense, and timekeeping procedures.  Noting that these concrete actions “are likely more rigorous than those in most similar firms,” (id. at *6), the Court was “satisfied” that “there is no or little likelihood for similar failures by members of that firm in the future.” Id.