Smith et al v. Leichtman et al

Filing 274

ORDER by Judge Jeffrey S. White denying 270 Application for an Order to Show Cause re Civil Contempt. Signed by Judge Jeffrey S. White on 6/7/12. (jjoS, COURT STAFF) (Filed on 6/7/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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CHRISTINA SMITH, et al.,

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For the Northern District of California

United States District Court

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No. C 10-00010 JSW

Plaintiffs,

ORDER DENYING WITHOUT
PREJUDICE APPLICATION FOR
AN ORDER TO SHOW CAUSE RE
CIVIL CONTEMPT

v.
LEVINE LEICHTMAN CAPITAL
PARTNERS, INC., et al.,

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Defendants.
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/

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Now before the Court is the application brought by Defendant National Corrective

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Group, Inc. (“NCG”) for an order to show cause regarding civil contempt against Irv

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Ackelsberg (“Ackelsberg”). On March 9, 2011, this Court granted NCG’s motion to require

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Plaintiffs’ counsel, attorneys Arons, Ackelsberg, Gupta, Wilcox and Grogan, to withdraw as

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counsel from this action (“Disqualification Order”). In the Disqualification Order, the Court

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found that the interests of the members of the putative class in the above captioned matter, who

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may have claims in Del Campo v. American Corrective Counseling Services, Inc., et al., No.

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01-21151 JW (“Del Campo class action”) would be compromised by permitting Plaintiffs’

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counsel to continue with its concurrent representation of the Del Campo class and the putative

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Smith class.

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Since May 13, 2009, Ackelsberg has been representing the Del Campo class, among

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other classes, in In re SCH Corp., et al., United States Bankruptcy Court for the District Court

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of Delaware, Case No. 09-10198 (BLS) (“Bankruptcy Action”). (See Docket No. 434.) Based
on a motion Ackelesberg filed in the Bankruptcy Action on March 27, 2012, as well as a letter

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Ackelsberg wrote on behalf of the consumer class action creditors in the Bankruptcy Action to

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counsel in the above captioned matter, NCG now argues that Ackelsberg is violating this

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Court’s Disqualification Order by continuing to represent the Del Campo class, which includes

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some members of the putative Smith class.

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In light of the fact that the Disqualification Order only addressed Ackelsberg’s

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representation of class members in the above captioned matter, it is not clear why NCG is

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moving for an order of contempt, as opposed to moving in the Bankruptcy Action to disqualify

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Ackelsberg from representing class members in that case. Accordingly, the Court DENIES

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NCG’s application for an order to show cause regarding contempt. However, this Order is
without prejudice to NCG refling an application to show cause upon a showing Ackelsberg is

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For the Northern District of California

United States District Court

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violating specific language in the Disqualification Order by representing class members in

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another matter.

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IT IS SO ORDERED.

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Dated: June 7, 2012
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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