BancorpSouth seeks cheap settlement by cooperating in filing of copycat case in Arkansas

Posted on: March 29th, 2012 by Steve Larson
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This blog has previously covered the numerous class actions pending against banks in the Southern District of Florida involving allegations of excessive overdraft fees resulting from a reordering of debit transactions from highest to lowest.  According to documents filed on March 29, 2012, by the Plaintiff’s executive committee in the case pending in Florida, Defendant BancorpSouth and its counsel have engineered a scheme in an attempt to circumvent Judge King’s governance of the litigation which the Judicial Panel on Multidistrict Litigation (“JPML”) entrusted to the Southern District of Florida. Long after the case against BancorpSouth was transferred to Judge King in the Southern District of Florida, and after a considerable amount of litigation over an 18-month period, including several instances of BancorpSouth seeking rulings consuming time and resources of this Court – and on the eve of a ruling on Plaintiff’s fully briefed Motion for Class Certification – BancorpSouth entered into a collusive class action settlement in another case encompassing the same claims at issue in the case in the Southern District of Florida.

The Plaintiff’s executive committee said BancorpSouth had a “reverse auction” settlement, where the defendant runs to the lowest bidder to secure friendly settlement terms for a settlement.  BancorpSouth allegedly cooperated in the re-filing of another case against it one month ago in the Western District of Arkansas, only to announce a class action settlement in that on March 27, 2012.  BancorpSouth’s counsel failed to notify the Court or the Plaintiff’s executive committee of the pendency of the copycat Arkansas action, nor of the proposed settlement, until after they appeared before the Arkansas court to secure preliminary approval of their collusive settlement.

Even worse, over the past weeks, BancorpSouth’s counsel affirmatively misled Plaintiff’s counsel in delaying pending discovery matters in this case under the guise of scheduling conflicts, all the while secretly negotiating to settle the other case and thereby scuttle the case pending in Florida before it could be certified as a class action.

The Plaintiff’s executive committee has asked Judge King to enjoin the Arkansas action under the All Writs Act, and grant the pending Motion for Class Certification in the Southern District of Florida.  Plaintiff’s executive committee says that if the proposed settlement were to proceed it would establish a dangerous precedent in MDL 2036, as it would tacitly authorize other defendants to “shop around” for the most favorable settlement terms.  The settlement was for $1.75 million.

Counsel for plaintiffs in the copycat case in Arkansas is Scott Poynter of Emerson Poynter in Little Rock, Arkansas.  Counsel for defendant BancorpSouth is John Holley from Parker, Hudson, Rainier and Dobbs in Atlanta.  These boys might have some explaining to do.