Thursday, September 22, 2011
Court Rejects Bid to Disqualify Attorney From Class Action
Justices Toss Claim of Conflict Between Ropers Majeski Lawyer and Class
By KENNETH OFGANG, Staff Writer
An attorney who sued the maker of a medical product for false advertising, and who was in turn sued by the manufacturer for defamation, may continue to represent the plaintiff in the original lawsuit, the Fourth District Court of Appeal ruled yesterday.
Orange Superior Court Judge Gail Andler did not abuse her discretion in ruling that Thomas H. Clarke Jr. of Ropers, Majeski, Kohn & Bentley did not have a disqualifying conflict of interest, the court held. Justice Eileen Moore authored the unpublished opinion for Div. Three.
Clarke filed suit on behalf of Joseph Rotenberg against Brain Research Labs, LLC and related defendants in Marin Superior Court two yeas ago. The complaint alleged that the defendants falsely promoted Procera AVH as protecting the brain and promoting healing.
Rotenberg asked the Marin court to certify a class and to grant injunctive relief and restitution under the false advertising, unfair competition, and consumer legal remedies acts.
In August 2009, the defendants in that action sued Clarke, Rotenberg, and a television station and its network, claiming Clarke made defamatory statements in a local news report and in an Internet video posted to solicit potential plaintiffs.
Among the allegedly defamatory statements cited by the manufacturer were that its product “contains dangerous drugs” that were potentially lethal, that its makers were “scam artists” who did not care if users “live or die,” that claims made for the product were “bogus,” and that it was “absolutely ineffective.”
The judge in the defamation case granted an anti-SLAPP motion in part, concluding that Brain Research Labs might prevail on its claims against Clarke and his firm, but not against Rotenberg. Clarke and Roper Majeski have an appeal pending; the broadcast defendants have been dismissed.
In the meantime, the underlying case was removed to federal court, remanded to the Marin court, and ultimately transferred to the Orange Superior Court. In September of last year, three months after the transfer of venue and 15 months after the action was filed, the defendants moved to disqualify Clarke and Ropers Majeski.
They argued that counsel had a strong motive to leverage the class claims in order to extricate itself from the defamation suit, noting that Clarke had said in settlement talks that any settlement of the underlying suit should involve the defamation action as well, although he admittedly had later “reversed his position.”
Clarke denied that he had ever sought to condition a settlement of the underlying case on a resolution of the defamation claims.
In denying the disqualification motion, Andler said that to disqualify counsel under the circumstances would encourage future defendants to believe that they could leverage selection of class counsel by suing the plaintiffs’ chosen lawyers for defamation.
Any prejudice to the class, she added, could be mitigated through the court’s ongoing supervision of the litigation, including its authority to rule on class certification and on approval of any settlement.
Abuse of Discretion Alleged
Moore, writing for the Court of Appeal, said the case was reviewable under an abuse-of-discretion standard. The defendants’ argument that the case involved pure questions of law, as to which the panel would not be required to defer to the trial court, was “simply incorrect,” the justice said, because the disputed comments by Clarke about tying settlement of the two cases together were important to the resolution.
Besides, she wrote, the court would not order disqualification on de novo review because the defendants failed to establish that a current conflict exists, and the trial judge can take appropriate action if new facts arise “somewhere down the road.”
Moore distinguished cases in which the court found that counsel’s interests were so antagonistic to those of the class as to compel disqualification, such as Cal Pak Delivery, Inc. v. United Parcel Services, Inc. (1997) 52 Cal.App.4th l and Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253.
Cal Pak involved an attorney who “admitted he had offered to sell out his client and the class...for a payment to himself personally,” the court in that case explained, while Apple concerned a named plaintiff who was employed by a law firm representing the class.
In contrast, Moore said, there was no evidence that Clarke or his firm were looking to sacrifice class interests for their own benefit, nor that the plaintiff and the law firm had “an overly close relationship that would compromise the interests of potential class members.”
The justice wrote:
“While defendants’ concerns for the interests of the class members is laudable, all they offer is speculation. The evidence does not establish a current conflict between Clarke’s duty of loyalty to the class and his own interests. The bottom line is that currently, Clarke’s interest is the same as that of the class — to prove that defendants are liable for selling a defective product.”
Robert H. Platt, Benjamin G. Shatz, Bruce B. Kelson and Adrianne E. Marshack of Manatt, Phelps & Phillips represented Brain Research Labs, while Clarke, along with Susan H. Handelman and Terry Anastassiou, also of Ropers Majeski, represented Rotenberg.
The case is Rotenberg v. Brain Research Labs, LLC, G044675.
Copyright 2011, Metropolitan News Company