Class Action News

Notorious ‘Serial Objector’ May Have Filed His Last Objection (1)

March 12, 2019, 8:51 AMUpdated: March 12, 2019, 3:42 PM

Texas attorney Christopher Bandas has made a name for himself in the legal community, and not in a good way. Regarded as the most prolific “serial objector” in the country, Bandas routinely objects to class action settlements, hoping to leverage a payment from the settling attorneys to simply “go away.”

The business model, seen as a form of legal “extortion” among critics, has paid Bandas handsomely over the years. But two recent court rulings and revisions to the rules of civil procedure may signal an end to this much-maligned practice.

The first whiff of trouble for Bandas came on Nov. 20 last year, when an Illinois appeals court found Bandas had engaged in an unethical pattern of “rent-seeking behavior.” The appeals court judges also found Bandas had “engaged in a fraud on the court” worthy of discipline by the state.

The ruling responded to Bandas’ efforts to object to a class settlement involving the media company Gannett Co., which was accused of placing millions of robocalls to consumers in violation of federal telephone marketing statutes.

The news for Bandas got worse Dec. 1, when new class action requirements became effective under Federal Rule of Civil Procedure 23. The new rules require side payments to class settlement objectors – transactions characterized as “greenmail” – to be approved by a district court. The new requirements seek to deter boilerplate and frivolous petitions, potentially extinguishing Bandas’ business model.

And on Jan. 17 U.S. District Court Judge Rebecca Pallmeyer issued an attention-getting order finding that Bandas had engaged in the unauthorized practice of law. The order responded to Bandas’ own admission of responsibility in a lawsuit in federal court in Chicago that alleged professional misconduct. The lawsuit followed the fact pattern in the Gannett case, but portrayed it as a single chapter in an illegal racketeering scheme being replicated in jurisdictions across the country.

Pallmeyer also issued a permanent injunction that placed new limits on Bandas’ ability to object in any state or federal jurisdiction in the country.

To be fair, the opportunity to object is viewed by legal scholars as a critical feature of the class settlement process. Earnest objectors, including injured parties and consumer advocates, serve as important checks against exorbitant attorneys’ fees and collusion between the settling attorneys.

But scholars have a less generous view of a small number of attorneys who routinely appear in court at the eleventh hour of a settlement to object with no meaningful justification.

And it’s no surprise such objections come in major cases. An analysis by Bloomberg Law of class actions filed in California federal courts revealed objections by Bandas in cases against Facebook, Apple, Bank of America, and Netflix, with settlement values reaching up to $100 million.

Major Blow for Objectors

Several class action players see this series of events as the last gasps of a crooked business model – a model that has likely earned Bandas tens of millions of dollars over the last decade.

“We think this is the biggest blow to the objectors bar ever,” said Jay Edelson, founder of the Chicago class action firm Edelson PC and the plaintiff in the racketeering and misconduct suit that culminated in Judge Pallmeyer’s order.

“This was the first ever injunction prohibiting an objector from a lot of behavior we believe is unethical – ghost writing complaints, not seeking to be admitted pro hac vice but still having a major role in objecting – so there is a whole host of things he’s not allowed to do,” Edelson told Bloomberg Law in an interview.

Class action attorney Ross Good, who has documented Bandas’ objections in dozens of cases in federal courts for the website www.serialobjector.com, expressed similar optimism.

“We are encouraged by the order from Judge Pallmeyer,” said Good, who is affiliated with Anderson + Wanca in Rolling Meadows, Ill. “We hope it sends a strong message to anyone considering filing an objection in bad faith. They should be wary.”

But other Bandas watchers aren’t so sure the greenmail rules and Judge Pallmeyer’s order will send this serial objector on a soul-searching hiatus to consider another line of work.

“It’s a serious move against Bandas, but it seemed limited in scope and it seemed much too late in the ball game to scare anybody,” said Brian T. Fitzpatrick, a professor at Vanderbilt Law School in Nashville, Tenn. “This has a lot of bark, but not much bite.”

A Personal Epiphany?

Bandas declined to be interviewed for this story, but he acknowledged “unethical, improper, and misleading conduct in filing or causing to be filed objections to proposed class action settlements” in the brief triggering Judge Pallmeyer’s order. He further acknowledged his reputation in courts across the country had been “gravely but justifiably tarnished.”

Robert Cummins, who represented Bandas in the professional misconduct case and drafted the “mea culpa brief,” insisted his client has experienced a personal epiphany equivalent to “St. Paul’s conversion on the road to Damascus.”

“Everything in that motion is 100 percent solid. Chris’ issuance of a mea culpa was sincere and remains sincere,” said Cummins, who is affiliated with Norman, Hanson & DeTroy LLC in Portland, Maine. “Mr. Bandas’ posture now is to put all this stuff behind him.”

Slip-and-Fall Accidents

At first glance, Bandas seems an unlikely professional objector.

A quick review of the website for Bandas Law Firm P.C. in Corpus Christi, Texas portrays Bandas as a personal injury attorney trolling for business from victims of slip-and-fall accidents, animal bites, and nursing home neglect. Online advertisements tout Bandas’ ability to win big judgments for people injured in truck smashups and maritime mishaps.

In one commercial segment, Bandas stands atop an 18 wheeler parked in the middle of a freeway and screams into the camera, “Big trucks rule the road. They’re dangerous and they can cause big, bad injuries. Let me fight for you!”

But a review of court dockets reveals Bandas has been jetting across the country for at least a decade objecting to class action settlements. Rulings from various courts further reveal Bandas engages in a particular brand of objection that offers few benefits to the class, but millions of dollars to the slip-and-fall attorney from Corpus Christi.

‘The Business Is Extortion’

“The business of professional objectors is to make insubstantial objections to class settlements on behalf of non-named class members, then threaten to appeal the judgment approving the settlement unless paid to desist,” said John E. Lopatka, a law professor at Pennsylvania State University. “The business is extortion, and it is profitable because class counsel have a powerful incentive to avoid the costs that an appeal would impose.”

The Illinois appeals court outlined the Bandas strategy in its November 2018 ruling, pointing to 15 lawsuits since 2009 in which he had “repeated this same basic pattern—frivolously object, appeal its denial, settle out of court, and withdraw.”

Attorney Ross Good’s Serial Objector Index places Bandas at the top of the class, pointing to objections in 76 cases in federal courts -- well ahead of any of the more than 500 attorneys listed. The index, however, vastly understates the scope of Bandas’ objections because it does not examine appearances in state courts, Good said.

It’s difficult to tally Bandas’ earnings from this scheme because greenmail payments are rarely disclosed in court, Lopatka said. Anecdotal evidence, however, suggests per-case payments of between $200,000 and $500,000 are not uncommon.

Bandas’ recent conduct in Clark v. Gannett in Cook County Circuit Court is a strong example of this business model. The Gannett case served as the foundation for both the November Illinois appeals court’s referral for sanctions and Pallmeyer’s order.

In 2016 Edelson filed a class action against Gannett under the federal Telephone Consumer Protection Act. The suit alleged Gannett placed automated calls to 2.6 million consumers without their consent, hoping to sell newspaper subscriptions. The parties settled later that year, with Gannett agreeing to pay the class $13.8 million. The court later granted Edelson attorney’s fees of 39 percent of the settlement pool, $5.3 million.

According to court Iocuments filed by Edelson, Bandas filed a “frivolous” objection together with disbarred California attorney Darrell Palmer, the number two objector on the serial objector index, and Illinois attorney C. Jeffrey Thut, who served as local counsel.

After the objection was overruled in circuit court, Bandas contacted Edelson and threatened to appeal, possibly delaying the settlement for months if not years. At a mediation conference, Bandas sought no modifications to the settlement, but demanded a side payment of between $225,000 and $445,000 to withdraw. Edelson ultimately agreed to pay Bandas $225,000 to “go away.”

Practice Common, Judges Losing Patience

This conduct has been repeated in courtrooms across the country for years, but the game is getting wearisome in some jurisdictions.

On Feb. 27, 2017, a federal judge in the Southern District of New York declined to impose sanctions on Bandas in a case against Major League Baseball, but found his conduct “at best, unprofessional, and at worst, an unseemly effort to extract fees from class counsel in exchange for the withdrawal of a meritless objection to the proposed class settlement.”

This pattern might have continued undisturbed in the Gannett case, but for one condition Edelson placed on Bandas’ payment. Edelson stipulated that the greenmail payment be disclosed for the circuit court’s approval, causing Bandas to back away. Edelson then sought sanctions against Bandas and Thut. And, in an extraordinary assault on Bandas and the objectors bar, Edelson filed a civil action alleging professional misconduct and violations of the Racketeer Influenced and Corrupt Organizations Act in federal court.

A federal judge declined to issue sanctions against Bandas after he objected to a class action settlement in a lawsuit against Major League Baseball. The lawsuit challenged baseball’s system for granting exclusive broadcast rights to regional networks and barring teams from broadcasting or streaming games outside their home territories.
Photographer: Bruce Bennett/Getty Images

Both legal strategies have yielded outcomes in the last three months that could impact Bandas’ ability to continue.

Edelson’s petition for sanctions bore fruit in the November 2018 Illinois appeals court ruling that found Bandas and Thut had “engaged in a fraud on the court.” The court then took the unusual step of referring both attorneys to the Illinois Attorney Registration & Disciplinary Commission (ARDC) for potential sanctions.

The lawsuit in federal court yielded a more interesting result. Judge Pallmeyer dismissed the RICO charge but permitted the misconduct lawsuit to continue. Edelson pursued discovery, demanding Bandas release extensive financial records. Bandas returned fire last December, countersuing Edelson for fraud and conspiracy.

Mea Culpa Petition

One month later, however, Bandas stunned lawyers watching the case by filing his mea culpa petition. Bandas not only withdrew his counterclaim, he admitted to the unauthorized practice of law in Illinois and conceded to Edelson’s demand for injunctive relief.

Bandas acknowledged his reputation before the court had been “tarnished.” On behalf of Bandas, Cummins wrote “should Defendants continue to practice class litigation, they will carry the tattoo of these orders with them and they greatly regret the circumstances that bring them before this Court.”

The mea culpa was followed by Judge Pallmeyer’s injunction, which permanently bars Bandas from appearing in any state or federal court in Illinois unless he gains admission to the state bar or receives permission to appear pro hac vice, a special designation granted when attorneys seek to appear in a jurisdiction where they are not licensed.

Bandas was further barred from soliciting Illinois attorneys to represent his interests without disclosure of his misconduct to the court. He also agreed to withdraw any active objections in cases in Illinois, including the Gannett case. The Gannett case has since settled, without a side payment for Bandas and without sanctions.

Finally, Bandas agreed to refrain from future objections in class settlements in any court without complying with the new civil procedure requirements. The court specified Bandas can’t object unless he states viable grounds for his objection, and he must seek court approval for any side payments.

Cummins said the requirements mark a new beginning for Bandas and a sincere commitment to good faith objections going forward, “whether in Illinois or on the moon.”

“If he files an objection, he will do so in good faith,” Cummins said. “Nothing will be done without court approval. No objection will be dismissed or withdrawn without court approval. There won’t be any side deals. There won’t be any fees.”

‘This Guy’s Got Such Chutzpah’

Several legal scholars, however, expressed doubts about Bandas’ resemblance to St. Paul on the back of a horse on the road to Damascus.

“Does this order deter Chris Bandas? Probably not,” said Robert Klonoff, a professor at the Lewis & Clark Law School in Portland, Ore., and an authority on class action law. “There are so many orders either sanctioning Bandas or condemning him, going back many years. As long as he can make money, he will just move around to every court that hasn’t sanctioned him or barred him from appearing. It’s truly an extraordinary thing. This guy’s got such chutzpah.”

Klonoff said Bandas’ future conduct -- and the conduct of other objectors -- would likely depend on the degree to which judges and the class action bar actively enforce the modifications to Rule 23. In particular, he pointed to the requirement for court approval of objector side payments.

“The idea is that having to be public about the payment and the nature of the objection will deter Christopher Bandas types from doing this because judges aren’t going to go along,” said Klonoff, who served on the advisory committee that drafted the new requirements.

Vanderbilt’s Fitzpatrick expressed the same doubts about Judge Pallmeyer’s order. And while the revisions to Rule 23 addressing greenmail are a well-intended, Fitzpatrick said they don’t go far enough.

“The only way to stop this is to prohibit all side deals – all side deals,” Fitzpatrick said. “If the objectors know they can’t get a side deal, they won’t try to blackmail class counsel. This way the only people objecting are people who have a real beef with the settlement.”

A Showdown With Regulators?

Potential sanctions by attorney discipline bodies in Illinois, where Bandas is not licensed, and Texas, where Bandas is licensed, might prove a more potent curb on the nation’s top serial objector.

“That would be an extraordinary thing, but it’s possible,” Fitzpatrick said. “That could put him out of business almost entirely.”

Neither the Illinois ARDC nor the State Bar of Texas would confirm Bandas is under investigation. A spokesperson for the Texas bar’s Office of the Chief Disciplinary Counsel said Bandas remains a member in good standing and there has been no past discipline by the state bar.

Bloomberg Law filed freedom of information requests with the ARDC and the Texas bar seeking disciplinary records pertaining to Bandas. Both bar regulators declined, stating investigative records are confidential.

However, the former chief of the ARDC told Bloomberg Law Bandas is undoubtedly under investigation by her former agency.

Two Devastating Strikes

Mary Robinson, who served as ARDC’s chief administrator between 1992 and 2007, pointed to two potentially devastating strikes against Bandas: The appeals court’s finding of fraud and its referral to the ARDC are extremely rare and would be taken very seriously by the agency; and, Bandas’ admissions before Judge Pallmeyer leave him with no wiggle room for mercy.

“The Illinois authorities are paying close attention to both Judge Pallmeyer’s order and the order of the appellate court,” said Robinson, of Robinson Law Group LLC in Chicago. “It’s my best guess that the Illinois authorities would be able to use the admissions made in the pleading before Judge Pallmeyer as definitive proof of misconduct.”

While Bandas is not licensed in Illinois, Robinson said the ARDC nonetheless holds jurisdiction, particularly because he admitted to the unauthorized practice of law. Any potential recommendations for suspension or sanctions would surely be referred to the Texas bar for investigation and reciprocal discipline.

Claire Reynolds, a spokesperson for the Texas bar’s Office of the Chief Disciplinary Counsel, declined comment on Bandas. At the same time, she said any order from Illinois sanctioning a Texas attorney would be taken very seriously.

“If Illinois has the ability under their rules to impose discipline on a non-Illinois attorney practicing in federal court in Illinois and also imposes that discipline, we could seek reciprocal discipline,” Reynolds said.

-- With reporting and writing assistance from Perry Cooper

(Updated with information on California cases in tenth paragraph.)

To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bloomberglaw.com

To contact the editors responsible for this story: John Dunbar at jdunbar@bloomberglaw.com; Pamela Atkins at patkins@bloomberglaw.com

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