(Reuters) - U.S. District Judge Jose Martinez of Miami has done the right thing.
On Thursday morning, Judge Martinez unsealed a controversial document in a $9.5 million class action against Walmart, ruling that Walmart and class counsel from Morgan & Morgan failed to rebut the presumption of public access to court records. In a nationwide class action, Judge Martinez wrote, the public interest weighs strongly against secrecy. “Class members,” he wrote, “are entitled to a full and fair understanding of the case.”
Amen to that!
The disputed document, as I’ve previously told you, is a Sept. 22 letter to the judge from Vassilios Kukorinis, the lead plaintiff in the class action. It’s important, as you’ll see, because it raises questions about whether the lead plaintiff and his lawyers are fulfilling their obligations to represent the interests of all class members.
In the letter, Kukorinis renounced the proposed settlement of the case, which alleges that Walmart overcharged customers for certain items whose price was based on their weight, and alleged that his lawyers at Morgan & Morgan did not tell him about the deal or obtain his consent before moving for preliminary approval in August. In fact, Kukorinis said in the letter, he had not heard from Morgan & Morgan since last January, more than six months before the firm asked the judge to grant preliminary approval of the Walmart settlement.
“I don’t want to participate in this fiasco/cover up and betrayal to all class action members, orchestrated without my knowledge,” Kukorinis told Judge Martinez.
Kukorinis’ letter was docketed on Sept. 25 but struck from the docket a few days later because the filing broke a local rule that precludes parties who are represented by counsel from appearing on their own behalf without an order of substitution. Judge Martinez called for a status conference to figure out what to do.
Before the scheduled conference, Morgan & Morgan filed a second declaration from Kukorinis in which he withdrew his opposition to the proposed settlement. Kukorinis said he was now satisfied, after discussion with Morgan & Morgan, that the settlement’s releases were not overly broad. He did not address his initial assertion that his lawyers did not obtain his consent before agreeing to the proposed deal. John Yanchunis of Morgan & Morgan told me last month that Kukorinis “was always informed of the progress and status” of the case and that “of course” Morgan & Morgan obtained the lead plaintiff’s consent before moving for preliminary approval of the settlement with Walmart.
The second declaration did not end the matter of Kukorinis’ original letter, though. A Walmart class member named Steven Helfand informed Judge Martinez that he wanted to participate in the status conference to decide whether the letter would remain struck from the docket. Walmart and Morgan & Morgan filed a joint brief arguing that Helfand should not be privy to information about the Kukorinis letter because the letter divulged information shielded by attorney-client privilege, as well as details about confidential mediation.
Judge Martinez allowed Helfand to attend the Oct. 7 conference. I subsequently heard about the dispute over the Kukorinis letter. I obtained the document from the docket service Docketbird, where it was still publicly available, and included a link to the letter in my Oct. 27 story about the case.
Last week, with no ruling yet from Judge Martinez on formal public access to the Kukorinis letter, Helfand took matters into his own hands. He filed a declaration arguing that the dispute was moot because the letter was already circulating publicly. Helfand attached a copy of the Kukorinis letter to his declaration. Helfand’s key point: The dispute between Kukorinis and Morgan & Morgan means that either the lead plaintiff or class counsel is not adequately representing the interests of class members. If Morgan & Morgan sought approval of the settlement without Kukorinis’ consent, Helfand said, it breached its obligations to Kukorinis, and, by extension, the other class members. On the other hand, if Kukorinis was mistaken about his communications with his lawyers, his fitness as a class representative is in question, according to Helfand.
Walmart and Morgan & Morgan moved jointly to seal Helfand’s declaration. They accused Helfand – a recently-disbarred California lawyer – of violating Judge Martinez’s order striking the letter from the case record. They also repeated their previous arguments that the Kukorinis letter must remain confidential because it contains privileged and improperly disclosed information.
In Thursday’s order, Judge Martinez criticized Helfand for disclosing the Kukorinis letter before the judge decided whether to make it public. “As a previously-licensed attorney engaged in federal class action litigation, Mr. Helfand’s filing of the still-under-seal document was both inappropriate and in violation of this court’s order,” the judge wrote. “And, while certain underhanded litigation tactics may be employed by parties engaged in adversarial proceedings, they will not be entertained by this court.”
But Helfand’s conduct, Judge Martinez said, was distinct from the issue of public access to the Kukorinis letter. The judge rejected privacy arguments by Walmart and Morgan & Morgan. Attorney-client privilege, he said, belongs to the client, Kukorinis, not his lawyers. And Kukorinis waived the privilege when he divulged his communications with Morgan & Morgan to the court, Judge Martinez said. And even though his letter disclosed a single, confidential statement from the mediator who helped Walmart and class counsel reach a resolution, the judge said, that revelation was relatively insignificant when weighed against the public interest in the document.
“Though a named plaintiff’s assent is not required for final approval of a class settlement, it is indeed a factor to be considered by the court,” Judge Martinez wrote. “And class members, including potential objectors, should be privy to those objections — even if they have been since withdrawn — to ensure that the fairness hearing is indeed fair.”
Walmart, which denies liability for the overcharging, said in an email statement that it “respects the court’s decision on the issue.” Class counsel Yanchunis did not respond to my email.
Helfand said he’s “ecstatic” about the decision, despite the judge’s criticism of his conduct. “Objectors are not popular with either class counsel or courts,” he said via email. “Regardless of any criticism leveled at me by either class counsel or the court, the access to documents in a class action, required by the First Amendment, is far more important.”
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