Attorneys say acted 'properly' in lawsuit

Didn’t venue shop, judge told in filing

Texarkana attorney John Goodson and a dozen more plaintiffs' lawyers say they acted "properly and ethically at all times" in a class-action lawsuit in which a federal judge has ordered them to explain why they shouldn't be sanctioned.

U.S. Chief District Judge P.K. Holmes III suggested in his order last month that the lawyers shopped between state and federal courts for venues to boost their own interests, at the expense of the plaintiffs class.

In their written response filed Thursday in federal court in Fort Smith, the lawyers denied what the judge called forum shopping.

"Counsel's conduct was appropriate," they said, and "does not warrant the harsh imposition of sanctions."

Holmes' Dec. 21 order required attorneys on both sides of the multimillion-dollar lawsuit, Adams v. United Services Automobile Association, to "show cause as to why a non-monetary sanction should not be imposed."

After the case sat in Holmes' court for 17 months, attorneys asked him to dismiss the lawsuit, which the federal judge did last June. The lawyers then refiled the suit in Polk County Circuit Court, where it had begun in 2013, and settled it last month for more than $5 million.

Responding to Holmes' show-cause order, the attorneys said their actions "were not to the detriment of the class."

The case settlement approved by the court in Polk County was "at least as beneficial to the class as ... other class settlements approved by federal courts in this district as being 'fair, reasonable and adequate,'" the lawyers said.

"At the time they dismissed the case" in federal court, the lawyers "believed their conduct was appropriate and within the bounds of acceptable litigation strategy," Thursday's filing said.

The plaintiffs' attorneys and their lawyers could not be reached late Thursday for comment about their response.

In a different filing Thursday, Holmes reset the date for the show-cause hearing to 10 a.m. Feb. 18 at the federal courthouse in Fort Smith.

The Adams case originated in Polk County Circuit Court in Mena on Dec. 5, 2013.

The case revolved around whether the insurer -- United Services Automobile Association -- illegally depreciated the cost of labor in claims for a type of property insurance known as "actual cash value," according to federal court records.

It was one of about 20 similar class-action suits over the issue filed against insurance companies in state and federal courts in Arkansas by Goodson's Keil & Goodson firm and others.

Goodson, a University of Arkansas trustee, is known as one of the state's most successful practitioners of class-action lawsuits, where plaintiffs' attorneys seek to represent a larger group of people called a "class."

Husband of Arkansas Supreme Court Associate Justice Courtney Goodson, he also is a high-profile donor to national, state and local political races, campaign contribution records show.

The federal judge also has ordered defense attorneys in Little Rock and Connecticut law firms to show why they shouldn't be sanctioned, as well.

Earlier this week, United Services Automobile Association defense attorney Lyn Pruitt of Little Rock's Mitchell, Williams, Selig, Gates & Woodyard said in an email that the defense side also plans to respond to Holmes' show-cause order.

Holmes apparently learned of the settlement via a Dec. 14 article in Arkansas Business that reported that Little Rock attorney Robert Trammell had challenged the settlement in a filing that claimed it was unfair to class members.

Metro on 01/15/2016

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