John Goodson, Others Appeal Reprimands in Class-Action Case

John Goodson, Others Appeal Reprimands in Class-Action Case
The Thomas Eagleton Federal Courthouse (white building right of the Gateway Arch) in St. Louis, home of the U.S. Court of Appeals for the Eighth Circuit.

Twelve plaintiffs' attorneys on Monday filed notice that they will appeal Chief U.S. District Court Judge P.K. Holmes III's finding that they abused the court system in their manipulation of a controversial class-action case.

The attorneys include five who were reprimanded last week, including the husband of a state Supreme Court justice, because Holmes found that they acted in bad faith in their handling of the class-action case.

The other seven plaintiffs' attorneys who have joined in the appeal were found to have abused the judicial process, but Holmes did not sanction them because he said their misconduct did not didn't rise to the level of bad faith.

Three defense lawyers were similarly found to have abused the system but without bad faith. They had not filed a notice of appeal as of Tuesday morning.

The notice filed by the 12 plaintiffs' attorneys indicates that they will ask the 8th U.S. Circuit Court of Appeals in St. Louis whether their conduct abused the federal court system and whether the court had inherent power to sanction them for it. They will ask the appeals court whether Holmes abused his discretion in reprimanding the five attorneys, according to the filing by New York attorney Gregory P. Joseph of Joseph Hage Aaronson LLC.

The attorneys who were reprimanded were John Goodson of Texarkana, husband of state Supreme Court Justice Courtney Goodson and a member of the University of Arkansas System board of trustees; Goodson's law partner, Matt Keil; Jason Earnest Roselius, a partner of Mattingly & Roselius of Oklahoma City; R. Martin "Marty" Weber Jr., of counsel of Crowley Norman LLP of Houston; and Richard E. Norman, a partner at Crowley Norman.

The case at the center of the matter was Mark and Katherine Adams v. United Services Automobile Association. The Adams case, which concerned the method used to calculate homeowners' insurance claims, was pending in Holmes' court for 17 months until both sides jointly agreed to dismiss it in June 2015. (Under court rules, the judge did not have to approve the agreed dismissal.)

The case was refiled the next day, with a settlement agreement attached, in Polk County Circuit Court, where the settlement was approved without any questions by Circuit Judge Jerry Ryan.

Holmes, who learned that the case was moved to Ryan's court for settlement from an article in Arkansas Business in December, said the settlement that was negotiated "benefited everyone but the class members" and indicated that he would not have approved it had the case still been in his court.

The attorneys had argued that a court rule allowed such cases to be dismissed before the class was certified, as in the Adams case, but Holmes shot down their interpretation of the rule as "unreasonable." And without that argument, he said, "Respondents are left to contend with the unequivocal statement of law in the Eighth Circuit that 'a party is not permitted to dismiss merely to escape an adverse decision nor to seek a more favorable forum.'"

The plaintiffs' attorneys who were found to have abused the system but without bad faith were Stevan Earl Vowell, William B. Putman, W.H. Taylor and Timothy J. Myers, partners at Taylor Law Partners of Fayetteville; A.F. "Tom" Thompson III and Kenneth "Casey" Castleberry, partners at Murphy Thompson Arnold Skinner & Castleberry of Batesville; and Matthew L. Mustokoff, a partner at Kessler Topaz Meltzer Check LLP of Radnor, Pennsylvania. All seven have joined in the notice of appeal.

Defense attorneys found to have abused the system but without bad faith were Lyn P. Pruitt, a member at Mitchell Williams Selig Gates & Woodyard of Little Rock, and Wystan Ackerman and Stephen Edward Goldman, partners in Robinson & Cole LLP of Hartford, Connecticut.

Holmes had previously found similar misconduct by plaintiffs' attorney Stephens C. Engstrom of Little Rock, but he reversed that finding last week.