By Gerald L. Maatman, Jr. and Jennifer A. Riley

On February 20, 2013, Judge Amy St. Eve of the U.S. District Court for the Northern District of Illinois granted Plaintiff’s second amended motion for class certification in The Savanna Group v. Truan, Case No. 10-CV-7995, 2013 WL 626981 (N.D. Ill. Feb. 20, 2013). In so doing, the Court found that counsel’s “slightly” unethical behavior did not prevent them from adequately representing the class for purposes of the adequacy of representation requirement of Rule 23(a)(4). Though not a workplace class action, the decision is noteworthy for employers defending against complex litigation. While courts continue to put teeth into Rule 23’s commonality requirement (read more here, here, and here), the Savanna opinion demonstrates that the threshold for adequacy of representation remains low. 

Factual Background

Plaintiff filed suit alleging that Defendant violated the Telephone Consumer Protective Act (“TCPA”) by hiring a company, Business to Business Solutions (“B2B”), to send unsolicited fax advertisements. Id. at *1. 

In response to Plaintiff’s motion for class certification, Defendant challenged the adequacy of class counsel, asserting three allegations of misconduct, including: (1)  class counsel breached a confidentiality agreement by disclosing information on a B2B hard drive and backup disks; (2) class counsel misrepresented the nature of the class action in a solicitation letter; and (3) class counsel sent a $5,000 check to B2B’s attorney, allegedly to induce the owner to provide information about B2B’s faxing operation. Id. at *2. 

On September 21, 2012, Plaintiff moved to certify a class action. The Court concluded that it lacked sufficient information regarding the circumstances of the alleged misconduct and ordered Plaintiff to submit detailed affidavits. Id. at *1. 

The Court’s Opinion

Although the Court noted that class counsel need not commit “egregious misconduct” to prove inadequate for purposes of Rule 23(a)(4), the Court rejected Defendant’s challenges and certified the class. Id. at *2.

First, Defendant showed that class counsel requested various documents from B2B in connection with four other TCPA cases and, in doing so, represented that an attached protective order would “prevent him from disclosing any of the [data] to any third-party.” Id. The Court found that, “while less than transparent,” class counsel’s conduct did not prejudice the class or rise to the level of “undermining the integrity of the proceedings.” Id. at *3.

Second, Defendant showed that, before the Court certified the class, class counsel sent a solicitation letter stating that “we have determined that you are likely to be a class member” and, if successful, “you would receive compensation (from $500 up to $1500) for each junk fax sent to you.” Id. The Court compared the conduct to a “slight” ethical breach and found that, while questionable, it did not prejudice the class. Id. at *4.

Third, Defendant showed that class counsel sent B2B’s attorney a check for $5,000 payable to him personally for “document retrieval.” Class counsel contended that he sent the check to reimburse B2B for the time and expense of retrieving documents, sitting for depositions, and to compensate them for turning over a computer. Id. at *5. The Court found, although class counsel’s explanation left “unanswered questions” and his conduct was “questionable,” the record did not demonstrate that class counsel sent the payment to induce particular testimony, particularly since B2B’s owner already had testified several times. Id. at *6. 

The Court concluded that Plaintiff satisfied its burden under Rule 23(a)(4) of demonstrating the adequacy of class counsel and granted Plaintiff’s motion for class certification.

Implications

The Court’s opinion in Savanna Group reinforces the high bar that defendants must meet to prevent certification based on the inadequacies of class counsel. Based on the Court’s approach, to use questionable or “slightly unethical” conduct to defeat certification, defendants will need to show broader impact and demonstrate that the conduct prejudices the class or compromises the proceedings before the Court.