Bolding et al v. Banner Bank

Filing 226

ORDER REGARDING DEFENDANT'S 189 MOTION TO COMPEL PRODUCTION OF FEE AGREEMENTS. Signed by Judge Robert S. Lasnik.(MW)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
_______________________________________
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KELLY BOLDING, et al.,
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Plaintiff,
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v.
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BANNER BANK,
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Defendants.
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_______________________________________)

Case No. C17-0601RSL
ORDER REGARDING DEFENDANT’S
MOTION TO COMPEL PRODUCTION
OF FEE AGREEMENTS

This matter comes before the Court on “Defendant Banner Bank’s Motion to Compel Fee

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Agreements.” Dkt. # 189. The Ninth Circuit has determined that certain types of incentive

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arrangements between the named plaintiffs and class counsel are relevant to the evaluation of the

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adequacy of the representation under Fed. R. Civ. P. 23. See Radcliffe v. Experian Info. Sols.

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Inc., 715 F.3d 1157, 1164 (9th Cir. 2013) (conditional incentive awards that require class

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representatives to support the proposed settlement make them inadequate representatives of the

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absent class members); Rodriguez v. West Publishing Corp., 563 F.3d 948, 959-60 (9th Cir.

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2009) (finding that a fee agreement in which counsel promised to request class representative

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awards on a sliding scale based on the amount recovered disjoined the financial interests of the

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representatives from the class, creating a disincentive for going to trial in favor of settling at the

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top end of the scale, a disincentive for pursing non-monetary remedies, the appearance of

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“shopping plaintiffships,” and the potential for ethical violations); In re Cavanaugh, 306 F.3d

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726, 732 (9th Cir. 2002) (“The presumptive lead plaintiff’s choice of counsel and fee
ORDER REGARDING DEFENDANT’S MOTION
TO COMPEL PRODUCTION OF FEE AGREEMENTS

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arrangements may be relevant in ensuring that the plaintiff is not receiving preferential treatment

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through some back-door financial arrangement with counsel, or proposing to employ a lawyer

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with a conflict of interest.”). The existence of such preferential arrangements or other conflicts

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with absent class members are therefore legitimate targets of discovery. Because the Court has

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an on-going obligation to ensure that class-wide adjudication or settlement of the claims is

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appropriate (see United Steel, Paper & Forestry, Rubber, Mfg. Energy, Allied Industrial & Serv.

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Workers Int’l Union v. ConocoPhillips Co., 593 F.3d 802, 809 (9th Cir. 2010)), the fee structure

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remains relevant even though the classes have already been certified. See also Radcliffe, 715

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F.3d at 1164 (“We once again reiterate that district courts must be vigilant in scrutinizing all

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incentive awards to determine whether they destroy the adequacy of the class representatives.”).

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Radcliffe, Rodriguez, and Cavanaugh arose in contexts other than a discovery dispute. In

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that context, a number of district courts within the Ninth Circuit have been unwilling to compel

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production of the written fee agreements in the absence of a reasonable basis for suspecting that

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an improper incentive agreement or conflict exists. See Larsen v. Coldwell Banker Real Estate

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Corp., 2011 WL 13131127, at *3 (C.D. Cal. Oct. 4, 2011) (where there is no evidence of a

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suspect relationship or conflict, the fee agreement was deemed irrelevant and not likely to lead to

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the discovery of admissible evidence); In re Google AdWords Litig., 2010 WL 4942516, at *4-5

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(N.D. Cal. Nov. 12, 2010) (noting that retainer agreements should not be discoverable in class

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actions where there is no evidence of a suspect incentive structure or conflict of interest). These

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courts implicitly or explicitly acknowledge, however, that defendants must be given some

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opportunity to obtain evidence regarding the fee arrangements, even if production of the

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agreement itself will not be compelled absent reasonable suspicion. Pappas v. Naked Juice Co.

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of Glendora, 2012 WL 12885109, at *6 (C.D. Cal. Dec. 5, 2012) (accepting plaintiffs’ assertions

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that retainer agreements are not relevant to class certification and that the depositions of the

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proposed class representatives would provide an adequate opportunity for defendant to explore

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issues of adequacy prior to class certification); Larsen, 2011 WL 13131127, at *3 (noting that
ORDER REGARDING DEFENDANT’S MOTION
TO COMPEL PRODUCTION OF FEE AGREEMENTS

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defendant would have the opportunity to test the veracity of plaintiff’s declarations regarding the

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fee provisions through depositions of the named plaintiffs).

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In this case, defendant attempted to question the class representatives at their depositions

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regarding the process by which they retained counsel, the terms of their fee agreements, and who

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controls the decisions regarding settlement or trial. Plaintiffs’ counsel objected, asserting that the

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information was privileged and instructing the witnesses not to answer. In the place of live

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witness testimony with the concomitant ability to ask follow-up questions, plaintiffs offer the

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static declaration of their counsel denying the existence of a conflict or improper incentive

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payments. Dkt. # 196 at ¶¶ 5-6. Counsel’s declaration is effectively unchallengeable, however,

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and defendant is not required to forego permissible methods of discovery simply because

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plaintiffs would prefer to provide factual evidence through a declaration.

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Having reviewed the submissions of the parties, the Court finds that plaintiffs cannot

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deprive defendant of the opportunity to gather relevant information regarding the incentive and

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decision-making structures that govern the class representatives’ relationships with counsel

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through depositions and then object to requests for the fee agreements on the ground that there is

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no reasonable basis to suspect the existence of a conflict or improper incentives. In the context

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presented here, plaintiffs’ relevance objection is overruled. Plaintiffs shall either supplement

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their responses to Requests for Production Nos. 25 and 29, including production of the fee

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agreement(s) between the named plaintiffs and their counsel,1 or make the named plaintiffs

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available for additional questioning. If plaintiffs opt not to produce their fee agreements, the

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renewed depositions shall be conducted by video and shall be limited to questions regarding

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plaintiffs’ fee arrangements and incentive/decision-making structures. Plaintiffs will be required

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to pay defendant’s attorney’s fees and bear the costs associated with the court reporter and the

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videographer.

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To the extent the Requests for Production encompass privileged materials (such as billing
records that reflect the advice or strategy of counsel), plaintiffs shall prepare a privilege log.
ORDER REGARDING DEFENDANT’S MOTION
TO COMPEL PRODUCTION OF FEE AGREEMENTS

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Dated this 6th day of July, 2020.

A
Robert S. Lasnik
United States District Judge

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ORDER REGARDING DEFENDANT’S MOTION
TO COMPEL PRODUCTION OF FEE AGREEMENTS

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