The Judge Isaac C. Parker Federal Building and Courthouse in Fort Smith, serving the Western District of Arkansas.
Chief U.S. District Judge P.K. Holmes III said Thursday that it might take up to four weeks before he issues a ruling involving possible sanctions against more than a dozen attorneys involved in a controversial class-action case.
During the more than two-hour hearing at the federal courthouse in Fort Smith, Holmes quizzed the attorneys representing the plaintiffs and defendants about their handling of the lawsuit that was in his court for 17 months.
The case of Mark and Katherine Adams vs. United Services Automobile Association was dismissed and refiled the next day in Polk County Circuit Court with a settlement attached.
Holmes wanted to know if the case was moved to the state court in order to avoid federal review of the settlement, which awarded attorneys John Goodson of Texarkana, W.H. Taylor of Fayetteville and other attorneys from their firms $1.85 million in fees.
The amount set aside for the approximately 14,000 class members was $3.4 million, which would be claimed by filling out paperwork even though USAA knew who was entitled to damages.
“My clients are very proud of that settlement,” said attorney John Elrod of Fayetteville, who represented Goodson, Taylor and 10 other attorneys who worked for the plaintiffs in the Adams case.
Elrod said the attorneys didn’t do anything wrong and what they did was in the best interest of their clients — the class members — in part because it made it harder for “professional objectors” to slow down the settlement.
Attorney David Matthews of Rogers, who represents the USAA attorneys, also argued that his clients had done nothing wrong, saying that USAA had instructed the lawyers to settle and the plaintiffs’ attorneys insisted on going back to state court in order to settle.
The USAA case was the subject of an in-depth report in Arkansas Business on Dec. 14. The report showed how attorneys on both sides of the matter jointly dismissed the case from Holmes’ court on June 22 — only to refile it the next day, with a proposed settlement attached, in Polk County Circuit Court.
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