Smith et al v. Georgia Energy USA, LLC et al

Filing 240

ORDER directing Class Counsel to file a notice with the Court addressing its plan to resolve the conflict identified in this Order no later than 5:00pm on Monday, September 29, 2014. (Compliance due by 9/29/2014). Signed by Judge J. Randal Hall on 9/23/14. (cmr)

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF GEORGIA
BRUNSWICK DIVISION

JONATHAN SMITH,

et al.,

*
*

Plaintiffs,

*
*

v.

*

CV 208-020

*

GEORGIA ENERGY USA,
et al.,

LLC,

*
*
*

Defendants.

*

ORDER

This

to

matter

Disqualify

Defendants

beginning
Georgia,
Class

before

2005

at

to

226).

gas

two

class

entities

(the

Defendants'

this

stations

in

against

Georgia,
"Gowen

On

22,

conference

to

discuss

this

Court

Defendants'

Camden

held

in

a

motion

light

the

two noneither

stations.

telephonic
in

2010,

in

that

gas

pumps

County,

on behalf of

to or competed against Defendants'

2014,

action,

Defendants

entities")

Motion

fuel

In addition,

supplied fuel

September

class

miscalibrated

suits

Charlton County,

on

In

consumers.

State Court of
member

Court

have

three

defrauding

initiated

the

(Doc.

alleged

thereby

Counsel

now

Counsel.

are

in

is

status
of

the

advanced stage of this litigation and the substantially depleted

pool

of

funds

from

which

both

of

Class

Counsel's

clients

now

seek relief.

Georgia Rule

of

Professional

Conduct

1.7 mandates

that

"a

lawyer shall not represent or continue to represent a client if

there is a significant risk that the lawyer's own interests or
the

lawyer's

third

duties

person

representation

1.7.

to

will
of

another

client,

materially

the

client."

a

and

former

adversely

client,

or

affect

a

the

Georgia Rules of Prof'l Conduct R.

This rule applies with equal force to class actions, where

counsel must at

all times "fairly and adequately represent the

interests of the class."

Fed. R. Civ. P. 23 (g) (1) (A) (iv) ; William

B. Rubenstein, Newberg on Class Actions § 3.75 (5th ed.

2011).

Indeed,

especially in "limited fund situations" when the recovery of one
group inherently and directly conflicts with the recovery of the
other,

courts

have

found

that

class

represent two sets of claimants.

n.8

(listing cases);

859,

865

(N.D.

Ga.

representation of
defendant

the

did not

defendant

counsel

adequately

See Newberg on Class Actions § 3.75

but see Sheftelman v.
1987)

cannot

(holding

that

Jones,

counsel's

667

F. Supp.

simultaneous

two classes pursuing relief against the same
create

could

not

a

conflict

satisfy

when

the

judgments

in

possibility

both

that

cases

was

"very speculative").
The Court finds that Class Counsel's representation of the
Gowen

entities

Charlton

County

and

their

falls

shareholders

squarely within

in

the

the

State

Court

prohibition of

of

Rule

1.7 and may threaten the vigor with which it must pursue fair
and

full

Class

Counsel

matter
action,
with

relief

and

the

cannot

the

class.

continue

plaintiffs

in

As

the

Court

to

represent

the

Charlton

determines

the

class

County

that

in this

State

Court

the Court hereby DIRECTS Class Counsel to file a notice

the

Court

identified
SEPTEMBER
Counsel

for

in
29#

has

addressing
this

Order

2014.

its
no

Upon the

resolved

the

plan
later

to

resolve

than

5:00

Court's

identified

the
PM

on

conflict
MONDAY,

determination that
conflict,

the

Class

Court

will

terminate Defendants' Motion to Disqualify Counsel (Doc. 226).

ORDER
September,

ENTERED

at

Augusta,

Georgia

this

^B1^- day

of

2014.

HONORABLE

J.

RANDAL HALL

UNITED STATES DISTRICT JUDGE
'HERN DISTRICT

OF GEORGIA