U.S. District Court in Illinois Allows Suit Against Professional Objectors to Proceed

In Legal Ethics & Professionalism, What's New in Class Action Law?, What's New in the Courts by gravierhouseLeave a Comment

In a suit brought by class action attorney Jay Edelson against professional objectors Darrell Palmer and Chris Bandas, the court dismissed the RICO and abuse of process claims, but allowed the claims based on unauthorized practice of law to proceed.

“Bandas does not contest Plaintiff’s categorization of his and Palmer’s activities in the Gannett litigation as constituting the ‘practice of law’ — which it almost certainly was. Instead, Bandas states only that Edelson does not allege that Mr. Bandas is an unlicensed attorney. Rather, the amended complaint acknowledges that he is an attorney, but claims that he is not licensed to practice in Illinois and never moved for pro hac vice admission. This clumsy attempt at linguistic gymnastics ignores the text of the statute. The Illinois Attorney Act does not simply prohibit the practice of law by non-attorneys; it prohibits the practice of law by anyone not licensed by the State of Illinois. Bandas is licensed to practice only in Texas, and Palmer is not licensed to practice anywhere.”

At the same time, the court noted that: “This is not to say that Plaintiff has already proved its case that either Bandas or Palmer performed the alleged legal services in Illinois as required by the Act…. It may perhaps be important that the mediation session, for example, was conducted telephonically between individuals then-residing in Texas (Bandas), California (Plaintiff’s representative), and Florida (Max, the mediator). Plaintiff has alleged that Bandas and Palmer covertly managed the Gannett litigation and drafted all of the pleadings for in-state figureheads (Thut and Stewart) with the explicit purpose of evading the court’s jurisdiction. The court concludes only that these allegations are sufficient to state a plausible claim for the unauthorized practice of law.”

In conclusion, the court re-emphasized that: “Defendants have engaged in a pattern of reprehensible conduct that has harmed Plaintiff and others and benefits no one other than Defendants themselves. The court is troubled by the fact that until now its decisions appear to leave Plaintiff and those similarly affected without an adequate remedy — and may fail to deter the Defendants from further rent-seeking. This court can only repeat its earlier advice that class counsel facing similar demands may be best served by calling the professional objector’s bluff and seeing the objector’s appeal through to its conclusion. In cases involving meritless, bad-faith objections, the likelihood of prevailing on appeal and recovering damages would likely be high. The court also notes that the Supreme Court has recently transmitted an amendment of FED. R. CIV. P. 23 to Congress. If allowed to go into effect, the new Rule would require district court approval before any objector can withdraw an objection or appeal in exchange for money or other consideration.”

 

Edelson v. Bandas Law Firm, No.16-11057 [Rec. Doc. 106], 2018 WL 3496085 (N.D.Ill. July 20, 2018).

 

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