Attorneys Brawl over Spoils of Overdraft Settlements Again
Money can complicate relationships. Several hundred million dollars can ruin them.
Plaintiffs' attorneys behind a group of wildly successful overdraft class action cases have been feuding over how to distribute hundreds of millions of dollars of court-approved legal fees, their share of more than $1 billion of settlements with banks. The fighting got so out of hand that the federal judge overseeing the litigation had to call a timeout.
Judge Lawrence King has issued an emergency injunction to stop a firm headed by Richard McCune from taking the dispute public in California state court. McCune had threatened to file a lawsuit divulging details of the feud unless the lawyers coordinating the case paid his firm $19.25 million. The attorneys coordinating the overdraft litigation appealed to Judge King to stop him.
The McCuneWright law firm's "threat to disclose ... settlement and strategy discussions with co-Lead Counsel violates the privilege and confidentiality accorded such conversations," King wrote in the order. "There can be no question that this constitutes irreparable injury to both the members of the classes and to Class Counsel."
The judge did not provide detail about McCune's unfiled suit beyond that it related to statements allegedly made to him about lawyers' fees. At the end of the order, a handwritten note states that "the court is available ... for an immediate hearing" if requested by McCune's firm.
At the heart of the underlying litigation is banks' past practice of "resequencing" its customers' debit card payments. By subtracting a customer's largest daily charges first, banks increased the speed at which customer accounts went into the red and began incurring overdraft fees. …