SANTOS v. CARRINGTON MORTGAGE SERVICES, LLC. et al
OPINION/ORDER denying #147 Motion to Appoint Counsel. Signed by Judge William H. Walls on 1/17/17. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
PEDRO SANTOS, on behalf of himself and
all others similarly situated,
OPINION AND ORDER
No. 2:15-cv-864 (WHW-CLW)
CARRLNGTON MORTGAGE SERVICES,
LLC, AMERICAN MODERN INSURANCE
GROUP, AMERICAN MODERN HOME
INSURANCE COMPANY, MIDWEST
ENTERPRISES, iNC., d/b/a AMERITRAC
BUSINESS SOLUTIONS, and
Walls. Senior District Judge
In this putative class action, Plaintiff alleges that his mortgage servicer and several
insurers engaged in a kickback scheme involving force-placed hazard insurance. A full factual
background is detailed in the Court’s July 8, 2015 opinion denying Defendants’ motions to
dismiss and incorporated by reference here. ECF No. 53 at 1-4. The Court has not yet certified
this action as a class action. Plaintiff now moves, for the second time this year,’ to appoint his
counsel of record, the Law Offices of Roosevelt N. Nesmith, LLC and Giskan Solotaroff
Anderson & Stewart LLP, as interim co-class counsel. ECF No. 147. Defendants oppose the
motion. ECF Nos. 152—53. Decided without oral argument under Fed. R. Civ. P. 78, Plaintiffs
motion is denied.
also moved to appoint the Law Offices of Roosevelt N. Nesmith, LLC and Giskan Solotaroff Anderson &
Stewart LLP. as interim co-class counsel on January 8, 2016. ECF No. 82. The Court denied Plaintiffs motion on
March 15, 2016. ECF No. 97.
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Rule 23 of the Federal Rules of Civil Procedure provides that a court “may designate
interim counsel to act on behalf of a putative class before determining whether to certify the
action as a class action.” fed. R. Civ. P. 23(g)(3).
“Although neither the federal rules nor the Advisory Committee Notes expressly so state,
it appears to be generally accepted that the considerations set out in Rule 23(g)(1)(C), which
govern the appointment of class counsel once a class is certified, apply equally to the designation
of interim class counsel before certification.” Yaeger v. Subaru ofAmerica, Inc., 2014 WL
1 (D.N.J. Oct. 8,2014) (quoting In reAir Cargo Shipping Servs. Antitrust Litig.,
240 F.R.D. 56, 57 (E.D.N.Y.2006)); Waudby v. Verizon Wireless Services, Inc., 242 F.R.D. 173,
175—76 (D.N.J. 2008) (finding that courts choosing interim class counsel can apply the same
factors that apply in choosing class counsel at the time of certification of the class, i.e., the
standards set forth in Rule 23(g)(1)).
The factors to be considered are: (i) the work counsel has done in identifying or
investigating potential claims in the action; (ii) counsel’s experience in handling class actions,
other complex litigation, and the types of claims asserted in the action; (iii) counsel’s knowledge
of the applicable law; and (iv) the resources counsel will commit to representing the class.
Yaeger, 2014 WL 7883689, at *2 (citing Durso v. SamsungElecs. Am., Inc., 2013 WL 4084640,
at *3 (D.N.J. Aug. 7, 2013), Fed. R. Civ. P. 23(g)(1)(A)). The Court must decide which
candidate is best qualified, holding dispositive no single factor. fed. R. Civ. P. 23(g)(2)(B). The
Court also has the discretion to appoint more than one firm to act as co-lead counsel. See, e.g., In
re Air Cargo Shipping, 240 F.R.D. at 58—59 (appointing four law firms as co-lead counsel);
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Nowak v. ford Motor Co., 240 F.R.D. 355 (E.D.Mich.2006) (appointing two law firms as
interim co-lead counsel).
In addition to the mandatory factors enumerated in Rule 23(g)(l)(A), “the Court may also
consider any other matter pertinent to counsel’s ability to fairly and adequately represent the
interests of the class and may, if it deems it necessary, direct the proposed class counsel to
provide information on any subject pertinent to the appointment.” In re Terazosin
Hydrochloride, 220 F.R.D. 672, 701—02 (S.D. Fla. 2006); see Fed. R. Civ. P. 23(g)(1)(C) (ii)
(iii); Report: Third Circuit Task Force on Selection of Class Counsel, 20$ F.R.D. 340, 419—20
(3d Cir. 2002) (citing additional considerations regarding counsel’s motivation, experience, and
understanding of case and lead plaintiffs economic stake in litigation).
The Manual for Complex Litigation provides further guidance concerning the propriety
of interim class counsel appointment prior to class certification. The Manual states, in part, that:
Ifthe lcn4yer whofiled the suit is to be the only lal4yer seeking appointment as class
counsel, appointing interim class counsel may be unnecessary. If, however, there
are a number of overlapping, duplicative, or competing suits pending in other
courts, and some or all of those suits may be consolidated, a number of lawyers
may compete for class counsel appointment. In such cases, designation of interm
counsel clarifies responsibility for protecting the interest of the class during
precertification activities, such as making and responding to motions, conducting
any necessary discovery, moving for class certification, and negotiating settlement.
Manual for Complex Litigation
§ 21.11 at * 1 (federal Judicial Center 2004). “[T]hose cases
in which interim counsel is appointed are typically those in which a large number of putative
class actions have been consolidated or are otherwise pending before a single court.” White v.
Trans Union, LLC, 239 F.R.D. 681, 683 (C.D. Cal. 2006) (collecting cases).
Plaintiffs counsel of record argue that the Rule 23(g) factors now favor their
appointment as interim co-class counsel because an “overlapping, duplicative, and competing
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suit now pending in the Southern District of Florida” (the “Florida Action”)2 implicates the
concerns listed in the Manual for Complex Litigation. ECF No. 152 at 2—3. The Court disagrees.
Plaintiff claims that the complaint filed in the Florida Action “seeks certification of the
substantially same class” and “appears to be part of a strategy by the American Modern
Defendants in cooperation with the Florida attorneys.
to circumvent the jurisdiction of the
Court over the claims of Plaintiff and the putative class.” In support of this argument, Plaintiff
points to a Joint Report filed by counsel in the Florida Action on behalf of the plaintiffs in the
similar action Bowles, et al. v. fay Servicing, LLC et al., No. 16-cv-02714 (D.N.J. Dec. 12,
2016) (Cecchi, I.) and Defendant American Modern Home Insurance, which states that the
Florida Action and Bowles Plaintiffs reached an agreement in principle with American Modern
Home “to settle claims of borrowers under two other lender placed programs in which American
Modern or an affiliate were the issuing insurer.” Id. at 8—9 (quoting, Bowles, ECF No. 33-1 at 1))
Following the submission of this Joint Report, which notified the Bowles Court of the Parties’
intent to file a combined action and settlement in Florida, Mr. Nesmith and Ms. Anderson filed
the present motion, ECF No. 147, as well as a letter in this case and in Bowles stating that they
had not been present when the agreement in principle was reached and had not been provided the
terms of the agreement. ECF No. 150.
While Plaintiff has identified a potential conflict between his counsel and counsel in the
other actions, the motion fails to explain what the appointment of interim class counsel would
accomplish other than to disrupt settlement negotiations. There is no suggestion that the issues
raised in the Manual for Complex Litigation are sufficiently implicated here because there is no
Strickland v. Carrington Mortgage Servs., No. 16-cv-25237 (S.D.FL. Dec. 18, 2016).
The agreement in principle in Bowles and Strickland would not prevent Plaintiff from continuing to pursue his
individual claims against Defendants.
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indication that the potentially competing suits may be consolidated with this action, Manual for
at * 1, or that this case and the Florida Action are in similar
procedural postures. White v. TransUnion, LLC, 239 F.R.D. 681, 683 (C.D. Cal. 2006).
Additionally, there is no concern about the authority of Plaintiffs counsel to engage in a
settlement to resolve this action or a demonstrated need to protect the time and resources
expended in reaching a settlement. Cf Friedman v. Guthy-RenkerLLC, No. 14-CV-06009ODW(AGRx), 2016 WL 2758240, at *2 (C.D. Cal. May 12, 2016) (appointing interim class
counsel to prevent uncertainty as to the authority of plaintiffs counsel to finalize a settlement).
In his reply brief, ECF No. 155, Plaintiff further argues that the appointment of interim
class counsel is necessary for the efficient adjudication of this action. Id. at 1—6. Specifically,
Plaintiff contends that the facts and circumstances of the proposed settlement reached in Bowles
and Strickland demonstrate the need for interim class counsel. Id. While it is entirely possible
that the actions of the Florida attorneys have been inappropriate and resulted in an unsuitable
proposed settlement in Bowles and Strickland, this alone does not support an argument for
appointment of interim class counsel. White, LLC, 239 F.R.D. at 684. (“Appointment of interim
class counsel is not the proper vehicle by which to oppose
settlement.”). Instead, the timing of
Plaintiffs motion, the circumstances surrounding the motion, and the justification offered may
suggest that Plaintiff seeks appointment of interim class counsel to disrupt settlement discussions
taking place in overlapping cases and gain leverage in settlement negotiations.4 Plaintiffs
response to this charge—that this motion is “hardly an indirect attempt to interfere with
American Modern’s settlement” because he has already taken other measures in Strickland
“In his motion, Plaintiff stated that in addition to filing the present motion he intended to “seek permission to
intervene in the Florida Action and have that action transferred to this Court, or in the alternative, to have it stayed
or dismissed.” ECF No. 147-1 at 9.
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aimed at that purpose—is unconvincing. ECF No. 155 at 4. The only purpose the appointment of
interim class counsel would accomplish at this time is the disruption of the proposed Strickland
settlement. As Plaintiff has identified, there are a plethora of other appropriate ways that the
proposed settlement can be challenged. Id. at 3—4; ECF No. 147-1 at 3. Plaintiffs motion is
CONCLUSION AND ORDER
Because appointment of interim class counsel is not appropriate at this time, it is hereby
ORDERED that Plaintiff’s motion, ECF No. 147, is denied.
United $tates-enior District Judge
The Court does not question counsel’s qualification under Rule 23(g)(1) at this point.
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