District Court (NY) Strikes TCPA Class Because of Class Rep. Inadequacy as the Spouse of the Class Counsel

Dr. Wexler concedes, as she must, that she would have had an interest in a potential fee award to her husband, had he been appointed class counsel. She argues that his withdrawal “mooted” the issue, Letter from James S. Giardina (Mar. 13, 2017) 2, but that is not correct. Notwithstanding his withdrawal, Mr. Wexler intends to seek fees for his work based on quantum meruit. Since he is no longer in a position to negotiate with the defendant, any fee award would come out of the class’s recovery. As class representative, Dr. Wexler should act to maximize that recovery and, by extension, minimize reductions to it. But her interest in the fee award supplies the opposite incentive.  Dr. Wexler argues that her current counsel and the Court are adequate safeguards against an unreasonable fee request. While it is true that a plaintiff’s lawyer in a putative class action owes duties to the class, he or she also owes them to the named plaintiff. See Restatement (Third) of the Law Governing Lawyers § 14 cmt. f (Am. Law Inst. 2000) (“Lawyers in class actions thus have duties to the class as well as to the class representatives.”). If the interests of Dr. Wexler and the class were to diverge over Mr. Wexler’s fee request, then so would counsel’s loyalties. And while the Court has a role in approving both settlements and fee awards, see Fed. R. Civ. P. 23(e, h), the Second Circuit has held that court approval does not supplant the need for a conflict-free class representative. See In re Agent Orange Prod. Liab. Litig., 818 F.2d 216, 224 (2d Cir. 1987) (“We also reject the district court’s finding that its authority to approve settlement offers under Fed.R.Civ.P. 23(e) acts to limit the threat to the class from a potential conflict of interest.”); see also Denny, 443 F.3d at 268 (“Adequacy must be determined independently of the general fairness review of the settlement[.]”).   The Court is aware that the importance of a vigilant class representative is easily overstated. Even a conflict-free representative is unlikely to be much of a watchdog. See Eubank v. Pella Corp., 753 F.3d 718, 719-20 (7th Cir. 2014) (“Class actions are the brainchildren of the lawyers who specialize in prosecuting such actions, and in picking class representatives they have no incentive to select persons capable or desirous of monitoring the lawyers’ conduct of the litigation.”); Umbriac v. Am. Snacks, Inc., 388 F. Supp. 265, 275 (E.D. Pa. 1975) (“[T]his interest [in class counsel’s fee] does not in my opinion create substantially more of a risk that the suit would be compromised unfairly as respects class interests than would exist if there were no relationship between the representative parties and counsel for plaintiffs.”). The very nature of a class action creates conflicts of interest between the class, class counsel and the class representative. That is, to a large extent, the reason the requirements of Federal Rule of Civil Procedure 23(a)—however fallible they may be—must be scrupulously enforced.  Because Dr. Wexler has an interest in a possible fee award to her husband, she cannot adequately represent the interests of absent class members. Therefore, AT&T’s motion to strike the class allegations in her complaint is granted.