Monday, July 25, 2016
Bar Leaders Criticize County Bar Over Cy Pres Funds
Membership Not Told That Payments Came From Settlement of Suit Claiming Exploitation of Dancers, Some Complain
By KENNETH OFGANG, Staff Writer
Local bar activists Friday criticized the Los Angeles County Bar Association over its acceptance of more than $573,000 in funds from the settlement of a class action brought against a chain of adult nightclubs.
Counsel for Justice, the pro bono arm of LACBA, recently announced in its Impact Brief newsletter that it had received the money as part of a cy pres award in the four-year-old settlement of a nationwide class action brought against Spearmint Rhino Consulting Worldwide. The newsletter contains a photo of Paul R. Kiesel, the outgoing LACBA president at the time, receiving the most recent installment of the funds from the defendant’s general counsel, Peter Garrell, at LACBA’s June 23 awards dinner.
The text accompanying the photo explains that the money was “Cy Pres funds” and was given to the Domestic Violence Legal Services Project, which is part of Counsel for Justice. An attendee at the installation dinner told the MetNews Friday that it was explained at the time that this was cy pres money, but not what the case was about or who Garrell was representing.
The text also credits current LACBA President Margaret Stevens with making the “initial efforts to secure the…award for DVP.”
According to 2012 reporting in the Ventura County Star, U.S. District Judge Virginia Phillips approved a nearly $13 million settlement in a class action initiated by women who worked as exotic dancers for the Spearmint Rhino in Oxnard.
The plaintiffs were identified in the article as Christeen Rivera and Tracy Dawn Trauth. They claimed they were wrongly treated as independent contractors rather than employees entitled to benefits, and alleged that while they each earned an average of $500,000 a year in tips for lap and table dances, “most of the money went to the club to cover “rent,” the disc jockey, stage fees, overhead costs and even penalties if they didn’t get enough men to purchase drinks during a shift.”
The defendants included 16 companies and the settlement required that the defendants stop classifying the dancers as independent contractors, and that stage fees be eliminated in California.
Cy Pres Awards
Cy pres awards are often employed in class actions when the total of individual claims is less than the amount that the defendant has agreed to pay. Ninth Circuit cases, such as Six (6) Mexican Workers v. Ariz. Citrus Growers (1990) 904 F.2d 130, require that such awards be related to the subject of the lawsuit or that the class members benefit.
Advocates for exotic dancers say they are often victims of violence perpetrated by customers of the clubs.
In an email to fellow bar activists Friday, Robert L. Kern, a Pomona lawyer who is a former president of the Eastern Bar Association, complained about the newsletter’s treatment of the donation:
“The picture and report certainly gives a favorable ‘spin’ to the payment,” Kern wrote. “The settlement would appear to confirm that the company was ripping off its employees” and that the payment was not a “donation” as depicted,” he said.
A copy of the email chain was obtained by the MetNews. One lawyer responded that “I received several comments (none positive) regarding that source of funding,” while another said “I would not publicize [funding from a strip club] if it were up to me.”
Neither Kiesel nor Stevens could be reached Friday for comment.
Copyright 2016, Metropolitan News Company