Robinhood hits class-action marketing firm with subpoena in spam text case
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(Reuters) - (The opinions expressed here are those of the author, a columnist for Reuters.)
Class action and mass tort critics have been griping for years about television advertising by plaintiffs' lawyers who spend hundreds of millions of dollars a year on TV ads exhorting purported victims to sign up and file lawsuits.
I haven’t seen similarly intense criticism from groups like the American Tort Reform Association and the U.S. Chamber’s Institute for Legal Reform to a newer – and, arguably, more sophisticated – form of trial lawyer advertising: internet sites that aggregate information about class actions and mass torts, allowing plaintiffs' lawyers to reach out to prospective plaintiffs via webpages describing “investigations” of potential claims.
That’s why I was so intrigued by a filing from the plaintiffs' firm Berger Montague on Tuesday in federal court in Manhattan. Berger Montague is trying to quash Robinhood Financial LLC’s subpoena demanding information from the parent company of the website ClassAction.org.
The website, as the quash brief makes clear, facilitated Berger Montague’s selection of lead plaintiffs for a Seattle federal court class action accusing Robinhood of breaching Washington state consumer law by sending unsolicited text messages to contacts of the trading platform’s customers.
Both of the lead plaintiffs in the class action have said in declarations that they heard about the case from a webpage announcement at ClassAction.org. The online notice, which said that Robinhood text recipients in Washington state could be eligible for $500 or more, invited consumers to fill out an online form.
The information they supplied, the ad said, would “be forwarded to Berger Montague, who has sponsored this investigation.” Both lead plaintiffs said they signed retainer agreements with the firm after making contact through the ClassAction.org ad.
Robinhood is now demanding to know, via a subpoena to ClassAction.org parent Season 4 LLC, who else responded to the online ad. The subpoena also calls for Season 4 to disclose its communications about the ad with Berger Montague.
Robinhood lawyers Kenneth Payson and Lauren Rainwater of Davis Wright Tremaine did not respond to my email query on the subpoena but they are presumably looking for information related to class certification in the spam text case. U.S. District Judge Barbara Rothstein of Seattle denied the company’s dismissal motion last August. Berger Montague’s class certification brief is due in September.
Berger Montague’s Michelle Drake also didn’t respond to my query. The firm argues in its motion to quash that Robinhood’s subpoena demands information shielded by attorney-client or work-product privilege, citing a promise on the ClassAction.org page that consumers’ responses would remain confidential.
The two lead plaintiffs filed a separate motion to quash, also asserting that Robinhood’s subpoena seeks privileged information. Berger Montague, which is handling both quash bids, has asked for the cases to be consolidated before U.S. District Judge John Cronan of Manhattan, who called for Robinhood to respond to the law firm’s motion by April 7.
If Robinhood prevails, I suspect lots of other defendants will try to squeeze information from the website. (I’m assuming, because I haven’t seen quash motions from other plaintiffs' firms, that Robinhood is blazing this particular trail.)
ClassAction.org, after all, has webpages promoting dozens of class actions and mass tort cases, some already settled, some in litigation and some in preliminary investigative stages, like the Robinhood text case when Berger Montague ran its ad.
Berger Montague described the site as providing “technical expertise and infrastructure” that connects law firms with potential plaintiffs who have "experienced potential corporate misconduct and are seeking legal advice.” Berger Montague has sponsored at least 10 ClassAction.org webpages calling on prospective plaintiffs to send contact information to the firm, based on my search of the site’s pages for different cases.
But it's not the only firm making use of the site to connect with prospective clients. Among the other shops listed as sponsors of ClassAction.org webpages describing various ongoing and prospective cases are Simmons Hanly Conroy; Cohen, Placitella & Roth; and Milberg Coleman Bryson Phillips Grossman.
The main ClassAction.org website says that the site's professionals, who are not themselves lawyers, have relationships with plaintiffs' lawyers across the country. Parent company Season 4 said on its separate website that the company’s founders spun off their marketing and tech business from plaintiffs’ megafirm Morgan & Morgan in 2015.
Season 4 founders Tara Voss and Patrick Hanan, who are also listed as ClassAction.org leaders, did not respond to my email.
I did notice one other recent hint that defendants are beginning to realize the important role of sites like ClassAction.org. It came in last month’s report from the U.S. Chamber’s Institute for Legal Reform on the rise of mass arbitration.
The report described how plaintiffs firms now use websites, including ClassAction.org, to come up with long rosters of clients, in addition to the traditional methods of television and radio advertising. As you might expect, the report expresses concerns about whether prospective clients actually know that law firms are sponsoring these recruitment webpages. (For what it’s worth, I didn’t have any trouble finding sponsorship information on the ClassAction.org pages I checked – but I was specifically looking for it.)
I’ll be interested to see how Robinhood justifies its demand for information from the site when it responds next month to Berger Montague’s quash motion.
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