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Controversial Class-Action Settlement Approved in Polk County

2 min read

A Polk County Circuit Court judge has approved a class-action settlement that a federal judge said he wouldn’t have.

Judge Jerry Ryan awarded $1.85 million in fees and expenses to attorneys John Goodson of Texarkana, his law partner Matt Keil, and W.H. Taylor and other attorneys from the Fayetteville firm of Taylor Law Partners in a case against United Services Automobile Association.

“The Court finds that the Stipulation is the result of a good-faith, arm’s length negotiation by the Parties hereto,” Ryan said in the order that was signed on Friday and entered into the court on Monday. “In addition, the Court finds that approval of the Stipulation and the Proposed settlement will result in substantial savings in time and resources to the Court and the litigants and will further the interests of justice.”

It’s the same settlement that U.S. District Judge P.K. Holmes of Fort Smith, the chief judge for the Western District of Arkansas, said would not pass muster in his court, where the case was filed for 17 months. On Monday, Holmes ordered Goodson, Taylor and other attorneys involved with the case to explain why they shouldn’t be sanctioned for abusing the federal court system by refiling the case in Ryan’s court only to avoid Holmes’ scrutiny.

The case had been the subject of a Dec. 14 report in Arkansas Business, which was apparently how Holmes learned that the parties had refiled the case, and their proposed settlement, in state court the day after he granted their motion for dismissal on June 22.

While Ryan found that the negotiations between the parties were in good faith, Holmes said the parties knew he wouldn’t approve such a settlement because it “advanced the interest of class counsel … and defense counsel… while largely failing to protect the interest of the class.”

Ryan’s order didn’t address the objections made by Little Rock attorney Robert Trammell, who appeared on Dec. 16 to challenge the settlement terms as being unfair to USAA insurance customers. USAA will set aside $3.4 million to pay customers who complete what Trammell described as an unnecessarily onerous claim procedures. Any money not claimed will revert to the insurer.

Judge Ryan noted that nearly 15,000 notices were mailed to potential settlement class members, but only six filed objections.

“The lack of opposition by a well-noticed Settlement Class strongly supports the fairness, reasonableness, and adequacy of the Stipulation and Class Counsel’s Application for Fees,” Ryan wrote.

“My clients, respected veterans, were apprised of the new developments out of both the Polk County Circuit Court and the U. S. District Court, Western District,” said Trammell in a statement to Arkansas Business. “I am authorized to carry forward, and we are finally confident of a fair review. That was all we ever asked.”

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