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Class Action Lawsuit Filed in Polk County in Center of Controversy

BY MELANIE BUCK –

What began as a federal lawsuit case that was eventually filed in Polk County Circuit Court has raised eyebrows across the judicial system and has been frowned upon specifically by U.S. District Judge P.K. Holmes, whose court the case was first filed.

The lawsuit involves a team of lawyers who represent plaintiffs in a controversial class-action lawsuit against USAA, an insurance company that covers veterans and their families.

The original case was filed in federal court, in Fort Smith by several attorneys that include John Goodson of Texarkana, W.H. Taylor of Fayetteville, and Steve Engstrom of Little Rock for the plaintiffs and Lyn Pruitt of Little Rock for the defendants (USAA). The class action suit claims that USAA improperly applied depreciation to lost or damaged structures that claims were made during January 1, 2006 and December 31, 2014.

According to other published reports, the case sat in federal court for over a year and a half, under Judge Holmes, lawyers of both the plaintiffs and defendants asked to dismiss the case and filed it in Polk County Circuit Court the following day. Polk County Circuit Court Judge Jerry Ryan heard the case in December 2015 and approved a class-action settlement between both parties.

However, after Holmes was made aware of the change of venue, he was quoted as accusing the attorneys of ‘forum shopping’ and is considering imposing sanctions on them at an upcoming court hearing.

The case has drawn the attention of national and state publications that said Goodson, who is the husband of Arkansas Supreme Court Justice Courtney Goodson, and his firm Keil & Goodson of Texarkana, have been in class-action controversy for several years with some accusing them of using smaller courts, such as Miller County, Arkansas, to file large class action cases, which were then drug out so long in court that defendants settled rather than being stuck in legal limbo for years. Lawyers for the defense say no legal merit was considered in the cases, yet each case cost some defendants millions in fees, before payments for settlements were considered.

An article published in Fortune in 2013 cited Keil & Goodson, along with two Texas firms, Nix Patterson & Roach, and Crowley Norman, LLP, together took in more than $420 million in attorney’s fees from 23 settlements filed in Miller County Court between 2005 and 2012. In March 2013, the U.S. Supreme Court put a halt to the law firms’ strategy of “trapping defendants in front of friendly and slow-moving elected judges in state courts.” Critics now believe the firms have changed their strategy and have moved beyond Miller County court to rope in other smaller courts.

Little Rock attorney Robert Trammell is challenging the current suit saying the settlement is unfair to class members and favors the law firms that represent them. The settlement, if approved, would pay $1.85 million in attorney fees and expenses, while $3.4 million dollars would be reserved by USAA to pay potential claims.

A hearing in Holmes’ court has been set for 10 a.m. on February 19th, 2016 at the Federal Courthouse in Fort Smith. Arkansas Business reported Holmes as saying that he learned from a December 2015 article they published that the case had been re-filed “under terms that Holmes said the parties knew he wouldn’t approve.”

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