A group of plaintiffs’ attorneys, most of whom were involved in a controversial 2015 class-action suit, were recently awarded $2.8 million in fees for a class settlement against State Farm Fire & Casualty Co.
Attorney Matt Keil of the Texarkana firm Keil & Goodson, in a court filing in the case in U.S. District Court in Texarkana, touted the fee amount as being “fair, reasonable, commensurate with the results obtained for Class Members, and consistent with Eighth Circuit precedent.”
Keil said the “amount to be paid” to the class is $8.5 million, meaning the plaintiffs’ attorneys’ fees represent about a third of that amount. Keil also noted in the filing that the fees would be “just 24% of the total monetary benefit [about $11.7 million] achieved for the common benefit of the Class.”
But State Farm had a problem with Keil’s math. “[P]laintiffs represent that ‘the amount to be paid to the Class’” is $8.5 million, Jacob Kahn of Riley Safer Holmes & Cancila LLP of Chicago, one of State Farm’s attorneys, wrote in a footnote in a May 22 court document. “That asserted valuation assumes that every Class Member will submit a valid claim and that State Farm will not prevail on any of its challenges to those claims.”
If policyholders don’t file a claim, they won’t get paid.
Most class members don’t bother filling out claims, and nationally the rate is typically between 8% and 15%. The settlement suggests that State Farm would retain any unclaimed portion of the settlement. The terms said that State Farm wouldn’t take a position on legal fees.
The claims deadline is July 1, and about 17,800 notices have been mailed.
Keil’s law partner, John Goodson, also was one of the plaintiffs’ attorneys along with: A.F. “Tom” Thompson III and Kenneth “Casey” Castleberry of Murphy Thompson Arnold Skinner & Castleberry of Batesville; Stevan E. Vowell of Taylor Law Partners of Fayetteville; Matthew L. Mustokoff and Richard A. Russo Jr. of Kessler Topaz Meltzer Check LLP of Radnor, Pennsylvania; James M. Pratt Jr. of Camden; and Richard E. Norman and R. Martin Weber Jr. of Crowley Norman LLP of Houston.
Neither Keil nor Goodson, who is chairman of the board of trustees for the University of Arkansas System, returned calls seeking comment.
Goodson and his firm have been involved in dozens of class-action cases resolved with hundreds of millions of dollars in settlements. In 2013, the U.S. Supreme Court ruled unanimously that a strategy Goodson routinely used to force settlements in Miller County Circuit Court was a violation of federal law.
On June 2, Chief U.S. District Judge Susan O. Hickey of the Western District of Arkansas awarded the plaintiffs’ attorneys $2.8 million in fees plus $400,000 in expenses in the State Farm case.
“The Settlement provides substantial monetary benefits to Class Members who timely submit completed Claim Forms,” Hickey wrote in her order.
Hickey also said that the plaintiffs’ attorneys “have fairly and adequately represented and protected the interests of the Settlement Class …”
In addition to Kahn, attorneys for State Farm were Joseph Cancila Jr., also of Riley Safer Holmes & Cancila, and John Moore and Beverly Rowlett of Munson Rowlett Moore & Boone of Little Rock.
The case was first filed in Miller County Circuit Court in 2013 and moved to U.S. District Court in 2014.
Plaintiffs alleged that State Farm underpaid homeowners’ claims for structural damage by depreciating labor costs when adjusting property loss claims. The class period covers between May 1, 2010, and Dec. 6, 2013.
State Farm had denied — and still denies — any wrongdoing.
The allegations were similar to those made against United Services Automobile Association by the plaintiffs’ attorneys in the State Farm case, except for Pratt and Russo.
In 2016, Goodson, Keil, Thompson, Castleberry, Vowell, Mustokoff, Norman and Weber were among 17 lawyers sanctioned by P.K. Holmes III, chief federal judge for the Western District of Arkansas, for engaging in “forum shopping” in the USAA case. Goodson and others appealed the order to the 8th U.S. Court of Appeals, which overturned Holmes’ sanctions.
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