What can happen when one plaintiff’s counsel represents two groups against the same defendant in a class action suit? Legal malpractice, conflict of interest, read below to find out.
California District Court disqualifies class counsel for conflict of interest
January 15 2014. By Gregory V. Mersol on
Is more of a good thing a better thing? In some contexts, not, as reflected by a recent case from the Northern District of California. In Lou v. Ma Laboratories, Inc., Case No. C 12-05409 WHA (N.D. Cal. Jan. 8, 2014), the plaintiffs brought two class or collective actions against the same employer for claimed state or federal wage and hour violations. Both sets of claims turned, at least in part, on the claim that the company’s electronic time-keeping system “systematically shaved off time.” One of the putative classes had 553 employees, while the other had 283, although there was claimed to be no overlap.
The plaintiffs moved for conditional certification of the FLSA collective action and for certification of a California class under Rule 23(b)(2) and (3). The defendant moved to disqualify plaintiff’s counsel for conflict of interest between the two classes.
While the plaintiffs’ counsel, no doubt, had considered that pursuing both sets of claims promoted efficiency, the court viewed the matter otherwise. Instead, citing settled principles, it found that they were not adequate class representatives under Rule 23(a)(4) [and by analogy under the FLSA] because of their attempt to represent two classes against the same employer. It also raised concerns regarding the potential to compromise the claims of one class at the expense of the other, particularly given the likelihood that the defendant would try to settle both cases at once and that the plaintiffs’ attorneys would have to decide the appropriate allocation between the two groups. The court therefore disqualified the plaintiffs’ attorneys from representing a class in the federal case, leaving the door open for another set of attorneys to step in or, alternatively, continuing the case solely as an individual action.
The court also expressed concerns over the viability of the class itself. It noted that the class involved periods in which the putative class members were classified as exempt and periods in which they were not. Different employees expressed different experiences regarding their incurring of overtime and how they recorded it. The court also noted that even employees who had clocked in may have spent time on non-compensable tasks.Ultimately, it concluded that the case would devolve into a series of mini-trials and that the case could not be certified under Rule 23 and would likely have difficulty surviving the second state of decertification under the FLSA.
The Bottom Line: Despite the temptation and possible discovery efficiency, the same attorneys cannot represent two classes against the same defendant.
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