Less than a month after Little Rock attorney Stephen Engstrom was cleared of wrongdoing in a controversial class-action case, he asked to withdraw from seven other pending class actions in which his co-counsel included Texarkana attorney John Goodson.
The federal judges assigned to the cases approved Engstrom’s requests.
In all of the motions to withdraw as an attorney, Engstrom wrote at the end of August that he no longer represented the plaintiffs in the cases. He also said that his withdrawal wouldn’t hurt the interests of the clients.
But he gave no specific reason for wanting to leave the cases, most of which date back to 2014.
Engstrom didn’t return calls or an email from Arkansas Business, so it could not be determined whether the withdrawals were connected with his health. In March, Engstrom was featured in an advertisement for the University of Arkansas for Medical Sciences that said he was diagnosed more than 10 years ago with “an extremely rare bone marrow disease.” The ad said Engstrom continued to undergo treatment and “close, day-to-day monitoring of his condition” at the UAMS Myeloma Institute.
Engstrom left cases that involved several plaintiffs’ attorneys who were part of a class-action case in which U.S. District Court Judge P.K. Holmes III of Fort Smith, the chief federal judge for the Western District of Arkansas, reprimanded five attorneys, including Goodson, the husband of a state Supreme Court justice.
On Aug. 3, Holmes found the attorneys acted in bad faith and abused the court system in their manipulation of the class-action case.
Ten other attorneys were found to have abused the judicial process, but their misconduct didn’t rise to the level of bad faith, the chief judge for the Western District of Arkansas said. They were not sanctioned.
In the August order, Holmes reversed his earlier finding of misconduct by Engstrom.
Twelve plaintiffs’ attorneys and three defense attorneys have appealed Holmes’ order to the 8th U.S. Circuit Court of Appeals in St. Louis. They will ask the appeals court to decide whether the attorneys’ conduct abused the federal court system and whether Holmes had inherent power to sanction them for it.
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. Meanwhile, Robert Trammell, a Little Rock attorney who tried to slow down the settlement in Polk County Circuit Court last fall, is pushing forward with his class-action suit against the lawyers who were sanctioned for abusing the court system.
In his lawsuit filed in Saline County Circuit Court, Trammell represents the interests of three customers of USAA and related USAA companies.
He seeks to have his case declared a class action for all the USAA policyholders who he says were the victims of “bad faith” and “collusion” by the attorneys who settled a class-action case in a way that Holmes said benefited everyone but the class of plaintiffs. Engstrom wasn’t named as a defendant in that lawsuit.
On Oct. 3, Trammell asked that Lynn Peeples Pruitt, an attorney at Mitchell Williams Selig Gates & Woodyard of Little Rock who represented USAA in the Adams case, be dismissed from his case.
Trammell said in an interview with Arkansas Business that he dismissed her as a defendant because she’s “currently volunteering personal time to a professional organization, and I had an opportunity to remove a distraction with no consequence to the … plaintiffs.”
Pruitt has worked with International Association of Defense Counsel and has been appointed as its 2017 Trial Academy Director.
Trammell also asked for a 120-day extension to serve the defendants with the lawsuit. Saline County Judge Grisham Phillips approved Trammell’s request on Oct 3.
