Lawyers Avoid Federal Sanctions in Forum Shopping Case

FindLaw covers CEI’s amicus brief in Adams v. USAA Casualty Insurance Company.

Usually, judges like to see cases settled.

But Judge P.K. Holmes was not one of those judges in Adams v. USAA Casualty Insurance Company. He found out that the parties in one of his former cases had settled in another court, and he wanted to know why he shouldn’t sanction the lawyers for forum shopping.

One sanctions order and an appeal later, the U.S. Eighth Circuit Court of Appeals gave the lawyers a reprieve because the federal rules allowed it.

The appellate decision did not reveal terms of the settlement agreement, but the plaintiffs’ attorneys reportedly received $1.85 million in the state-court settlement.

If the class had been certified, the results might have been different. The Competitive Enterprise Institute, as amicus, argued the Class Action Fairness Act protects absent class members from litigation tactics that benefits lawyers at the class members’ expense.

But the Eighth Circuit said nothing in the CAFA or the federal rules prohibited the parties from agreeing to dismiss and re-file in state court.

Read the full article at FindLaw.