8th Circuit reverses punishment of John Goodson, other lawyers in Fort Smith class action case | Arkansas Blog

Tuesday, July 25, 2017

8th Circuit reverses punishment of John Goodson, other lawyers in Fort Smith class action case

Posted By on Tue, Jul 25, 2017 at 11:12 AM

click to enlarge CLEARED: John Goodson cleared of punishment by judge in class action case. - ARKANSAS BUSINESS
  • Arkansas Business
  • CLEARED: John Goodson cleared of punishment by judge in class action case.
Huge legal news from the 8th U.S. Circuit Court of Appeals on the highly publicized case in which federal Judge P.K. Holmes disciplined lawyers for working out a class action settlement in a lawsuit against an insurance company that involved dropping long-running litigation in his court for a settlement in state court.

The 8th Circuit said the lawyers had not abused the judicial process or broken a rule when they dismissed the federal action. As a result, the appeals court reversed the disciplinary action against the lawyers.

Some have argued the settlement was more favorable to class action lawyers and the insurance company than to members of the class that sued over payments on auto claims.

The case drew huge attention in part because of the high-powered class action lawyers involved in the settlement. They included John Goodson of Texarkana, a politcal player, UA trustee and husband of Supreme Court Justice Courtney Goodson.

Holmes' discipline of offending lawyers was a reprimand, but it was a negative brand that affected their ability to handle similar cases in the future.

The 8th Circuit said it understood Holmes "frustration," but said the lawyers had a "colorable" argument that a voluntary dismissal of the case was outside rules he could enforce and that he'd abused discretion in punishing the lawyers.

Holmes has broad authority to discipline lawyers on his own volition, but this case didn't meet the standard, the 8th Circuit held. Holmes found that the attorneys were looking for a more favorable forum. But the 8th Circuit said rules allow parties to ask dismiss for "any reason" and other cases had overturned sanctions in similar cases where a different forum was being sought.

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