Wexler v. AT&T Corp.
MEMORANDUM and ORDER: Because Dr. Wexler has an interest in a possible fee award to her husband, she cannot adequately represent the interests of absent class members. Therefore, AT&Ts motion 49 to strike the class allegations in her complaint is granted. Ordered by Judge Frederic Block on 2/7/2018. (Innelli, Michael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
EVE WEXLER, on behalf of herself and
all others similarly situated,
MEMORANDUM AND ORDER
Case No. 15-CV-0686 (FB) (PK)
For the Plaintiff:
JAMES S. GIARDINA, ESQ.
The Consumer Rights Law Group, PLLC
3104 West Waters Avenue, Suite 200
Tampa, Florida 33614
For the Defendant:
EVAN TAGER, ESQ.
Mayer Brown LLP
1999 K Street NW
Washington, DC 20006
BLOCK, Senior District Judge:
Eve Wexler (“Dr. Wexler”), on behalf of herself and a proposed class of
similarly situated individuals, has sued AT&T Corp. under the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. § 227. Pursuant to Federal Rule of Civil
Procedure 12(f), AT&T moves to strike the class allegations in Dr. Wexler’s
complaint on the ground that she is not an adequate representative of the class. For
the following reasons, the motion is granted.
“A motion to strike class allegations under Rule 12(f) is . . . disfavored because
it requires a reviewing court to preemptively terminate the class aspects of litigation,
solely on the basis of what is alleged in the complaint, and before plaintiffs are
permitted to complete the discovery to which they would otherwise be entitled on
questions relevant to class certification.” Belfiore v. Procter & Gamble Co., 94 F.
Supp. 3d 440, 447 (E.D.N.Y. 2015) (citations and internal quotation marks omitted).
Here, however, the lack of discovery is not a cause for concern because the following
facts, though not alleged in the complaint, are undisputed:
The lawsuit was filed on February 11, 2015, by Mrs. Wexler’s husband,
One month later, James Giardina joined Mr. Wexler as counsel for plaintiff.
After the Court denied AT&T’s motion to compel arbitration, see Wexler v.
AT&T Corp., 211 F. Supp. 3d 500 (E.D.N.Y. 2016), AT&T filed a letter
seeking a conference on its contemplated motion to strike. It took the position
that “unless and until Shimshon Wexler both withdraws as counsel and
renounces any interest in any future award of attorney’s fees in this case, Dr.
Wexler is an inadequate class representative as a matter of law, and the case
cannot proceed as a class action.” Letter from Evan M. Tager (Oct. 28, 2016)
In response, Mr. Giardina represented that “Mr. Shimshon Wexler will be
withdrawing as counsel for Plaintiff [and] a new firm will be joining the case.”
Letter from James S. Giardina (Nov. 9, 2016) 1. He further represented that
“Mr. Wexler will not be entitled to any share of any attorney fees recovered in
this case, but may seek to petition the Court for quantum meruit only for the
work done prior to his withdrawal.” Id.
Mr. Wexler withdrew as counsel for plaintiff on November 18, 2016. He was
replaced by Keith J. Keogh a few days later.
“The class action is ‘an exception to the usual rule that litigation is conducted
by and on behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338, 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 70001 (1979)). As a result, special rules are needed to protect non-party class members
who will be bound by the outcome of the litigation. See id. at 349. These rules,
rooted in concepts of due process, see Phillips Petroleum Co. v. Shutts, 472 U.S. 797,
811-12 (1985), are embodied in the four prerequisites of Federal Rule of Civil
Procedure 23(a)—numerosity, commonality, typicality, and adequacy of
At issue here is Dr. Wexler’s adequacy as a representative of the class. See Fed.
R. Civ. P. 23(a)(4). “The adequacy inquiry under Rule 23(a)(4) serves to uncover
conflicts of interest between named parties and the class they seek to represent.”
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997). Thus, “the proposed class
representative must have an interest in vigorously pursuing the claims of the class, and
must have no interests antagonistic to the interests of other class members.” Denney
v. Deutsche Bank AG, 443 F.3d 253, 268 (2d Cir. 2006).
“[T]here is no per se rule against relatives of class counsel serving as class
representatives.” Dupler v. Costco Wholesale Corp., 249 F.R.D. 29, 42 (E.D.N.Y.
2008). However, courts have long found that a familial (or any other) relationship
creates a conflict if it gives the class representative an interest in the fees class counsel
might recover. See Stull v. Baker, 410 F. Supp. 1326, 1337 (S.D.N.Y. 1976) (“[T]rial
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.”); Fischer v. Int’l Tel.
& Tel. Corp., 72 F.R.D. 170, 173 (E.D.N.Y. 1976) (calling class representative’s
interest in class counsel’s fee “the touchstone for denial of class action status”).
The problem stems from the class representative’s duty to monitor class
counsel. A class representative’s duties are generally nominal, but this one is
significant. As Judge Posner has explained, the interests of class counsel inherently
diverge from the interests of the class: “[T]he incentive of class counsel, in complicity
with the defendant’s counsel, [is] 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—the deal that promotes the
self-interest of both class counsel and the defendant and is therefore optimal from the
standpoint of their private interests.” Creative Montessori Learning Ctrs. v. Ashford
Gear LLC, 662 F.3d 913, 918 (7th Cir. 2011). A vigilant class representative will—at
least in theory—act as a foil to self-dealing by class counsel. Courts fear that an
interest in class counsel’s fee will dull that vigilance, especially if the fees are likely
to dwarf the class representative’s own recovery. See Spagnola v. Chubb Corp., 264
F.R.D. 76, 96 (S.D.N.Y. 2010); Stull v. Pool, 63 F.R.D. 702, 704 (S.D.N.Y. 1974).
Dr. Wexler concedes, as she must, that she would have had an interest in a
potential fee award to her husband, had he been appointed class counsel. She argues
that his withdrawal “mooted” the issue, Letter from James S. Giardina (Mar. 13, 2017)
2, but that is not correct. Notwithstanding his withdrawal, Mr. Wexler intends to seek
fees for his work based on quantum meruit. Since he is no longer in a position to
negotiate with the defendant, any fee award would come out of the class’s recovery.
As class representative, Dr. Wexler should act to maximize that recovery and, by
extension, minimize reductions to it. But her interest in the fee award supplies the
Dr. Wexler argues that her current counsel and the Court are adequate
safeguards against an unreasonable fee request. While it is true that a plaintiff’s
lawyer in a putative class action owes duties to the class, he or she also owes them to
the named plaintiff. See Restatement (Third) of the Law Governing Lawyers § 14
cmt. f (Am. Law Inst. 2000) (“Lawyers in class actions thus have duties to the class
as well as to the class representatives.”). If the interests of Dr. Wexler and the class
were to diverge over Mr. Wexler’s fee request, then so would counsel’s loyalties. And
while the Court has a role in approving both settlements and fee awards, see Fed. R.
Civ. P. 23(e, h), the Second Circuit has held that court approval does not supplant the
need for a conflict-free class representative. See In re Agent Orange Prod. Liab.
Litig., 818 F.2d 216, 224 (2d Cir. 1987) (“We also reject the district court’s finding
that its authority to approve settlement offers under Fed.R.Civ.P. 23(e) acts to limit
the threat to the class from a potential conflict of interest.”); see also Denny, 443 F.3d
at 268 (“Adequacy must be determined independently of the general fairness review
of the settlement[.]”).
The Court is aware that the importance of a vigilant class representative is
easily overstated. Even a conflict-free representative is unlikely to be much of a
watchdog. See Eubank v. Pella Corp., 753 F.3d 718, 719-20 (7th Cir. 2014) (“Class
actions are the brainchildren of the lawyers who specialize in prosecuting such
actions, and in picking class representatives they have no incentive to select persons
capable or desirous of monitoring the lawyers’ conduct of the litigation.”); Umbriac
v. Am. Snacks, Inc., 388 F. Supp. 265, 275 (E.D. Pa. 1975) (“[T]his interest [in class
counsel’s fee] does not in my opinion create substantially more of a risk that the suit
would be compromised unfairly as respects class interests than would exist if there
were no relationship between the representative parties and counsel for plaintiffs.”).
The very nature of a class action creates conflicts of interest between the class, class
counsel and the class representative. That is, to a large extent, the reason the
requirements of Federal Rule of Civil Procedure 23(a)—however fallible they may
be—must be scrupulously enforced.
Because Dr. Wexler has an interest in a possible fee award to her husband, she
cannot adequately represent the interests of absent class members. Therefore,
AT&T’s motion to strike the class allegations in her complaint is granted.
/S/ Frederic Block
Senior United States District Judge
February 5, 2018
Brooklyn, New York
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