On October 14, 2010 Pope McGlamry, in conjunction with Taylor English Duma, P.C. and the Sterbcow Law Group, LLC, filed suit in a Federal Court in Gainesville, Georgia on behalf of buyers and sellers of residential real estate in metro Atlanta and north Georgia against First Multiple Listing Service, Inc. (“FMLS”), its member real estate brokers, the agents who handled the transactions of the named Plaintiffs, and three boards of REALTORS®. The lawsuit alleges that members of FMLS, which include virtually every residential real estate broker and agent in north Georgia, are engaged in the practice of charging buyers and sellers of residential real estate unearned hidden settlement fees at the close of a real estate transaction. The lawsuit also alleges that brokers receive a kickback of all or substantially all of those fees from FMLS, and share in the transaction fees paid on other closings.

After the lawsuit was filed, FMLS and other Defendants filed a motion to have the lawsuit dismissed. FMLS and the other Defendants claimed that their conduct did not violate the Real Estate Settlement Practices Act of 1974 (“RESPA”), and that the Plaintiffs could not prove various other claims made against them. On January 18, 2012, the U.S. District Court for the Northern District of Georgia stood with the Plaintiffs and ruled that buyers and sellers of residential real estate can sue FMLS (the dominant FMLS in Georgia) and member brokerage firms under RESPA to recover undisclosed fees and kickbacks. The Court decided that Plaintiffs can recover damages if, as they allege, brokers and agents refer consumers to FMLS and pay FMLS unearned hidden settlement fees from real estate commissions or if FMLS pays kickbacks to productive brokers. The Court’s Order denying the Defendants motion to dismiss can be seen here.

The Plaintiffs do not plan to bring their claims alone. They hope to establish a class action law suit that will permit them to seek damages on behalf of all purchasers and sellers of residential real estate in Georgia during at least the four years preceding the day on which their lawsuit was filed. If the class action lawsuit is successful, it will send a message to those who benefit from consumers that purchase and sell residential real estate that the regulations put in place to protect the consumers cannot be ignored.

Lawyers at Pope, McGlamry, Kilpatrick, Morrison, & Norwood P.C., have helped settle a national class-action lawsuit on behalf of consumers who purchased the products SLIMQUICK, NV and Liquid Hoodia Extreme and several other products manufactured by Wellnx.

Around the winter of 2007, several Plaintiffs filed a series of sixteen class action lawsuits in various states against Wellnx alleging violations of various states’ consumer protection laws. Specifically, Plaintiffs alleged that Wellnx made false and misleading statements in the labeling and advertising of its products. The lawsuits were ultimately consolidated and the parties have now reached a proposed settlement agreement. The consumer class action is an efficient and effective mechanism of protecting the rights of innocent consumers. Continue reading “Class Action Settlement Reached in Consumer Class Action against Wellnx” »

On September 1, 2011, consumers attained a significant victory when U.S. District Judge James Lawrence King denied renewed motions to compel arbitration by Branch Banking & Trust Company (“BB&T”), M&T Bank Corporation, Regions Financial Corporation (“Regions”), and SunTrust Banks in the multidistrict bank overdraft fee litigation. In Re: Checking Account Overdraft Litigation, MDL No. 2036, Case No. 09-MD-02036-JLK. (S.D. Fla. September 1, 2011).  

Arbitration agreements for BB&T, M&T Bank Corporation, Regions, and SunTrust Banks are “unconscionable” and cannot be enforced, Judge King stated in the Order.  Judge King ruled that the Supreme Court ruling in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), did not require arbitration in every case.  Judge King held that:

“As an initial matter, Concepcion did not completely do away with unconscionability as a defense to the enforcement of arbitration agreements under the FAA.  Rather, Concepcion expressly recognized that unconscionability is a defense contemplated by the Savings Clause of the FAA.  Accordingly, this Court does not read Concepcion to preclude consideration of all unconscionability defenses; rather, it simply narrows the permissible factors for consideration in the unconscionability analysis.”  In Re: Checking Account Overdraft Litigation, MDL No. 2036, Case No. 09-MD-02036-JLK. (S.D. Fla. September 1, 2011).   

The litigation before Judge King involves customers of more than 30 banks who sued their banks over the overdraft-fee policies.  The customers allege that the banks reorder debit-card transactions in their computers to maximize overdraft fees.  The undisputed facts show that such fees are processed from highest dollar amount to lowest, rather than in chronological order of purchases.  The banks filed motions to compel arbitration on May 10, 2010, which were denied by Judge King and the banks appealed.  The Eleventh Circuit Court of Appeals remanded the case for consideration in light of the U.S. Supreme Court opinion in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011).  In Concepcion, by a 5 to 4 decision, the Supreme Court enforced a clause in an arbitration agreement prohibiting consumers from seeking to vindicate their rights through class actions. Lower courts had rejected AT&T Mobility’s request, holding that the class-action ban was unconscionable under California law because it would exculpate the company from accountability for wrongdoing.

In reviewing the impact of Concepcion in the present litigation, Judge King found that “Concepcion has not relieved courts from their obligation to securitize arbitration agreements for enforceability on a case-by-case basis where one party resists arbitration; rather Concepcion provides guidance as to what courts may consider when fulfilling that obligation.”  In Re: Checking Account Overdraft Litigation, MDL No. 2036, Case No. 09-MD-02036-JLK. (S.D. Fla. September 1, 2011).  

Judge King challenged the increased risks placed on bank customers throughout the Order and seemed to place great weight on the differences between the arbitration agreement in Concepcion and the banks’ arbitration agreements.  While the Concepcion arbitration agreement was consumer friendly, the banks’ arbitration agreements placed nearly all the risks of engaging in dispute resolution on the customers.  For instance, if SunTrust, Regions, or BB&T were to win in arbitration, they would be entitled to an award of costs and attorney’s fees and they would be allowed to take their awards directly from the customer’s account at any time, without notice.  Judge King held that “this is the type of greatly increased risk found unacceptable in Concepcion.  Just as defendants are willing to accept the risk of “errors in arbitration since their impact is limited to the size of individual disputes,” Concepcion, 131 S.Ct. at 1752, plaintiffs are willing to accept these risks because they can seek judicial redress under the FAA.”   

The Court analyzed the relevant arbitration agreements under Georgia, North Carolina, South Carolina, and Maryland law and found the agreements were unconscionable, and would not be enforced.  The Court’s order represents a tremendous victory for consumers in litigation of national significance and at a time when the ability of consumers to stop corporate misconduct has been placed in question by the Concepcion decision.

On March 30, 2011, the Georgia Court of Appeals affirmed the trial court’s holding in Brenntag Mid South, Inc. v. Smart et al., 710 S.E. 2d 569, 2011 WL 1168563 (Ga. 2011) and entered an order certifying a class of neighbors who were forced to evacuate their homes because of the negligent release of acetic acid into the plaintiffs’ neighborhood. 

The class action, filed by Louise Smart, Emma Lou Stokes, Turista Elmore, and others similarly situated, arose out of the negligent release of a cloud of glacial acetic acid from a chemical storage tank at the Defendant’s facility in East Point, Georgia.  The named plaintiffs and others similarly situated had to evacuate their homes as a result of the glacial acetic acid being released into the atmosphere.  The Plaintiffs estimated that approximately 8,000 residents lived within the area that had to be evacuated. 

The Plaintiffs originally filed their action in federal court seeking class certification for the evacuees.  However, the parties entered into a letter agreement in which the Plaintiffs agreed to dismiss the federal action and refile their action in state court “seeking class certification as to the inconvenience/evacuation class only.” Id.  The Defendant agreed to stipulate certification of a class of individuals who suffered inconvenience damages associated with being evacuated by order of any fire or law enforcement agency. 

On December 12, 2006, the Plaintiffs refiled in state court and sought certification of three separate classes.  The Defendant moved for partial summary judgment on the Plaintiff’s class certification claims because they were barred by the previous agreement.  Subsequently, the parties presented argument at a class certification hearing before Special Master Carey Ichter, who entered a recommendation and report as to findings of fact and conclusions of law regarding class certification and concluded that the Plaintiffs met the requirements for class certification.  The trial court subsequently entered an order adopting the report and granted the motion for class certification.  The Defendant appealed.      

The Georgia Court of Appeals held, in order to certify a class action in Georgia, the plaintiff must prove that: (1) numerosity-that the class is so numerous as to make it impracticable to bring all members before the court; (2) commonality-that there are questions of law and fact common to the class members which predominate over any individual questions; (3) typicality-that the claim of the named plaintiff is typical of the claims of the class members; (4) adequacy of representation-that the named plaintiff will adequately represent the interest of the class; and (5) superiority-that a class action is superior to other methods of fairly and efficiently adjudicating the controversy. West’s Ga. Code Ann. § 9–11–23.  The Georgia Court of Appeals held that the claims arose from one single occurrence, and class adjudication provided the most efficient method for resolving factual and legal issues surrounding the events leading to the release of the acetic acid and the resulting evacuation. 

The Court further held that the damages involved for each class member were likely to be relatively small making it unlikely that other class member would have a strong interest in in brining individual actions.  And that it was unlikely that counsel could be found to pursue such relatively minor claims on an individualized basis so that economic reality dictates that the Plaintiffs’ suit proceed as a class action or not at all.