The Eastern District of New York recently held that a former class counsel’s spouse was an inadequate class representative due to the conflict of interest created by the relationship. The plaintiff, Dr. Eve Wexler, brought a putative class action against AT&T, alleging violations of the Telephone Consumer Protection Act. The case was originally filed by the plaintiff’s husband, Shimshon Wexler, who was later joined by another attorney, Mr. Giardina. AT&T argued that Shimshon must withdraw from the case and renounce any interest in the future award of attorney’s fees. Shimshon agreed and withdrew from the case; however, he stated that he planned to seek fees by a petition for quantum meruit for work performed prior to withdrawal. AT&T then moved to strike the plaintiff’s class allegations, arguing that the conflict of interest rendered the plaintiff an inadequate class representative.
The district court reiterated that the adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. The court recognized that often “the interests of class counsel inherently diverge from the interests of the class,” due to “the incentive of class counsel … to sell out the class by agreeing with the defendant to recommend that the judge approve a settlement involving a meager recovery for the class but generous compensation for the lawyers.” While the court noted that there “is no per se rule against relatives of class counsel serving as class representatives,” it stressed that “trial courts have found that, when the class plaintiff is so closely allied with the class attorney that he or she might have an interest in the legal fees that the attorney may ultimately seek, there is at least a potential conflict of interest.”
The court went on to illustrate that because Mr. Wexler intended to seek fees for his work, and because, as class representative, “Dr. Wexler should act to maximize [the] recovery and, by extension, minimize reductions to it,” the plaintiff’s undeniable interest in her husband’s fee award created the opposite incentive. As such, the plaintiff could not adequately represent the interests of absent class members. Therefore, the court granted AT&T’s motion to strike the plaintiff’s class allegations.