Turnabout is fair play as this Third Circuit decision holds that the plaintiffs in a settled asbestos class action can pursue a class action against their lawyers for breach of fiduciary duty. The theory of the plaintiffs’ case is that their former class action attorneys did not disclose to the plaintiffs fee arrangements that the lawyers routinely made with local counsel that allegedly led to lower settlement payments for the plaintiffs. Not the greatest theory in the world, but what the heck.
At any rate, a U.S. District Court declined to certify the class and granted summary judgment for the defendant plaintiff’s lawyers, but a divided Third Circuit panel reversed and remanded on the grounds that the District Court used the wrong standard in evaluating the plaintiffs’ claims. Thus, under applicable Texas law, the appellate court ruled that the plaintiffs’ are entitled to proceed with their claims. As a result, a legal theory based on Texas law that tort reformers probably oppose is being used to pursue taking money out of the pockets of plaintiff’s lawyers, which is certainly something that the tort reformers support. This is a great state, isn’t it?
Hat tip to Robert Loblaw for the link to the Third Circuit decision.