Tuesday, December 22, 2015

Federal judge wants John Goodson to explain class action maneuvering

Posted By on Tue, Dec 22, 2015 at 11:04 AM

click to enlarge JOHN GOODSON: A judge has questions for him.
  • JOHN GOODSON: A judge has questions for him.
A show-cause order filed Monday by federal Judge P.K. Holmes of Fort Smith indicates class action attorney John Goodson has some explaining to do about the move of a class action complaint against an insurance company from federal to state court with an instant pre-packaged settlement that has been criticized as a windfall for Goodson.

Arkansas Business has the details of the order, which follows a report by AB's Mark Friedman on the legal funny business involving Goodson. We noted late last week sharp criticism of the deal by another lawyer in the case, Robert Trammel of Little Rock. Trammel said the proposed $3.4 million settlement of claims by holders of homeowners insurance with USAA is illusory because it will be hard for people with claims to make them. Meanwhile, Goodson and legal allies will get a big payday, up to $1.85 million. The theory among critics is that the insurance company settles to limit its exposure.

Here's AB on Holmes' order:

The order suggests that the report by Senior Editor Mark Friedman was the first time the court realized that the case the parties jointly dismissed from Holmes' court on June 22 was refiled the next day, with a proposed settlement attached, in Polk County Circuit Court.

"Notably, although his matter was pending in this [federal] Court until June 22, the stipulation was signed by counsel on June 16, 2015, and specifically defines 'Court' as 'the Circuit Court of Polk County, Arkansas,'" Holmes noted in his order.

"The clear inference," Holmes wrote later in the order, "to be drawn from the fact that counsel filed a stipulation of settlement in Polk County the day after dismissing the case that had been pending with this Court for over 17 months is that counsel wished to evade the federally-mandated review of the class and the proposed settlement by this Court in particular."

Apart from the general odor  — a continuation, it should be noted, of past reporting on Goodson's alleged ability to land home-cooked deals for lucrative class action settlements in other Arkansas courts — the continued publicity comes at a sensitive political time.

Goodson is a UA trustee and major political player. He's been a significant source of support for multiple members of the elected Arkansas Supreme Court and his wife, Justice Courtney Goodson, is currently running against Judge Dan Kemp for chief justice. Among the 14 lawyers representing the class in the proposed USAA settlement is W.H. Taylor, who provided a $50,000 Italian vacation on poultry magnate John Tyson's yacht not long after Courtney Goodson dropped an earlier husband and married Goodson. Goodson recuses from Tyson poultry related cases, but the depth of Goodson's associations with multiple lawyers isn't always fully known.

Complications arise with some regularity. Two weeks ago, Justice Goodson didn't participate in another insurance case out of her husband's home base of Miller County on whether Shelter Insurance could depreciate labor in paying homeowner claims. Her husband's law firm was on the case, along with W. H. Taylor and a Little Rock lawyer, Stephen Engstrom, who recently threw a fund-raiser for Justice Goodson. A number of such insurance depreciation claim cases are pending. Justices Robin Wynne and Jo Hart also recused. 

Goodson's influence is, unavoidably, an issue in the Supreme Court race and not because he's a lawyer. He's too deeply involved in court politics and money-raising for it to be otherwise.

Judge Holmes is no push-over, by the way.



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