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INDIANAPOLIS (Legal Newsline) – A Chicago class action law firm used a contract that would have left its client liable for thousands in attorneys fees if she chose to settle her case against its wishes.
The Keogh Law Firm, which is active in filing class actions under a federal telemarketing law, included a stipulation in its retainer agreement that would have forced a client to pay its lawyers their regular hourly rates and expenses incurred on the case if she settled against the firm’s advice before a class was certified.
“If Client abandons the class and settles on an in individual basis against the advice of Attorneys, Client shall be obligated to pay Attorneys their normal hourly rates for the time they expended in the case and shall be obligated to reimburse the Attorneys for all expenses incurred,” the agreement says.
The clause became an issue last year in an Indianapolis case against Credit Protection Association, which challenged the ability of Keogh Law to serve as lead counsel for a proposed class of people texted by the company.
Their client was unaware that she could have been forced to pay hourly fees to the firm, which she assumed was working on a contingency fee.
The lawsuit said lead plaintiff Katherine Lanteri replied “stop” when instructed to reply in all caps if she wanted the texts to cease.
Judge William Lawrence wrote on Sept. 26 that Keogh Law needed to take the repayment clause out of its contract with Lanteri if it wanted to be appointed lead counsel for a certified class. Lawrence wrote that it appeared Keogh Law was willing to do so.
“(T)he arrangement creates the appearance of a possible conflict with respect to the Plaintiff’s ability to freely withdraw her claim or settle her claim against her attorneys’ advice,” Lawrence wrote.
Lanteri’s deposition showed that she was not aware of the clause. She also did not know her attorneys’ regular hourly rate.
“Were the terms of your agreement between you and your attorneys ever discussed with you?” she was asked.
“No,” she replied.
“Since 2013, have you had $20,000 that you would be willing to pay to an attorney to represent you in a case like this?”
Other firms representing Lanteri were Philipps & Philipps and Steven J. Halbert.
Normal hourly rates, as indicated in the agreement, were $450 for Keith Keogh, $505 for David Philipps and $425 for Halbert.
Lawrence has since recused himself from the case, which remains pending. He had certified a class shortly after requiring Keogh Law to eliminate the repayment clause.
A jury trial is scheduled for July.
Keogh Law is active in TCPA class actions, as well as class actions against debt collectors over their methods. It says it has recovered more than $100 million on behalf of TCPA class members.
From Legal Newsline: Reach editor John O’Brien at email@example.com