Posted 6/3/2013 12:00 am
A loss at the U.S. Supreme Court in March isn’t stopping plaintiffs’ attorneys from fighting to return a potential class-action lawsuit to the friendly confines of Miller County Circuit Court.
John Goodson of the Texarkana firm of Keil & Goodson is one of the attorneys representing Greg Knowles in his case against Standard Fire Insurance Co. and wants the lawsuit back in Miller County instead of U.S. District Court in Texarkana.
Last week, U.S. District Court Judge P.K. Holmes III of Fort Smith ordered Standard Fire to file its response to Goodson’s motion by June 10.
Standard Fire’s attorney Lyn Pruitt of Little Rock didn’t return a call for comment.
The stakes are high for Goodson and his co-counsels, the Texas law firms of Nix Patterson & Roach and Crowley Norman. The firms extracted more than $420 million in attorneys’ fees in recent years tied to out-of-court settlements in 23 lawsuits, nearly all of them in Miller County, according to court documents filed in the U.S. Supreme Court appeal.
Goodson didn’t return a call for comment.
When the Knowles lawsuit was filed in 2011 in Miller County Circuit Court, the plaintiffs’ attorneys stipulated in the complaint that Knowles and the rest of the class would not seek more than $5 million in damages and fees for the Arkansas policyholders.
Those points were key under the Class Action Fairness Act that Congress passed in 2005.
Under CAFA, a lawsuit involving a class of plaintiffs from multiple states can be moved out of a state court and into federal court by a motion of the defendants. The defendants also can move a class-action case into federal court if the plaintiffs claim damages, including attorneys’ fees, of more than $5 million.
Standard Fire wanted no part of Miller County, where class-action defendants were pummeled with requests to produce — at their own expense — thousands or even millions of pages of documents. The discovery costs alone could run into the millions, so most defendants decided to settle.
Standard Fire attempted to move the case to U.S. District Court in 2011, where it thought it would have an impartial court experience. In order to get the case moved out of Miller County Circuit Court, however, the company was placed in the uncomfortable position of having to argue that the damages were more than the plaintiffs were seeking.
Holmes sent it back to Miller County because of Knowles’ stipulation.
Standard Fire appealed, and the case made it to the U.S. Supreme Court. On March 19, the high court issued a unanimous decision in favor of Standard Fire. It said the plaintiffs can’t say from the get-go that they aren’t seeking more than $5 million in fees and damages. The Knowles case was sent back to U.S. District Court.
On March 28, just nine days after the Supreme Court ruling, attorney W.H. Taylor of the Fayetteville law firm Taylor Law Partners, Keil & Goodson and the two Texas firms filed a motion asking Holmes to reconsider whether the $5 million damages threshold had been met in the Knowles case.
Holmes had ruled in 2011 that the case was worth more than $5 million, but since Goodson and the other plaintiffs’ attorneys stipulated that they wouldn’t seek more than $5 million, Holmes believe he had no choice but to send the case back to Miller County.
The plaintiffs’ attorneys argued that Holmes’ finding is no longer binding and the court should take a “fresh review of Standard Fire’s evidence,” according to the motion. The plaintiffs’ attorneys would like to conduct a limited discovery to show that the case is worth less than $5 million.
What sparked the lawsuit in the first place was hail damage to Knowles’ Miller County home. He claimed in the lawsuit that Standard Fire didn’t pay enough of his claim to cover a general contractor’s overhead and profit, which is 20 percent of an estimated job. Knowles said his Standard Fire agent never told him he was entitled to receive the money for the contractor.
Taylor said in the filing that Standard’s total amount of damages and attorneys’ fees of $5,024,150 for the proposed class is wrong. He calculated it at $4,997,837, a dispute of just $26,313 but huge in that the lower figure would allow the plaintiffs to keep the case in the county court that has been so lucrative in the past.