Law 360 February 22, 2016

Atty Calls Groupon Class Outcry Over Husband’s Fee Baseless
By Kali Hays

Law360, New York (February 22, 2016, 5:46 PM ET) -- An attorney claiming she aided an $8.5 million
deal ending multidistrict litigation between consumers and Groupon Inc. over short-dated online
vouchers on Friday urged a California federal court to ignore the consumers outcry over paying her
part of the settlement, saying attacks on her counsel and husband are unwarranted.

Represented by her husband Paul R. Hansmeier, attorney Padraigin Browne told the court class
opposition to her application for a $7,500 service award and a 10 percent cut of the recent
settlement deal with Groupon is improperly based on “reputational attacks” against her husband over
his involvement with an alleged “porno trolling collective.”

Hansmeier is one of a trio of lawyers that founded Prenda Law, a nonpracticing entity that bought up
rights to adult films through shell companies and then threatened to sue thousands of individuals
that downloaded them online, regularly resulting in out-of-court settlement deals. Hansmeier has been
sanctioned by multiple courts and Prenda’s bankruptcy was converted in December to Chapter 7.

Despite the damaged reputation of her husband however, Browne argued that the class has failed
entirely to “identify or even allege misconduct in this case” and that objections she made on the class’s
behalf at the Ninth Circuit resulted in a settlement that provides “significantly greater benefit” to the
class, according to the motion.

“Objections play an important role, as this case demonstrates, and we hope that the district court
recognizes the valuable role that my client played,” Hansmeier told Law360 Monday.
In her brief, Browne said that “even if the court were to find that [Hansmeier] has the worst reputation
of any attorney in the United States” it would be an abuse of discretion to use that as reason to deny
her fee.

Moreover, Browne said if the court were to strike her fee application based on the allegedly bad faith
arguments made by the class, it would lead to an impermissible interference with her right to retain
counsel of her choice, according to the motion.

Browne also asked that class counsel be ordered to “personally satisfy” the costs and fees she’s uncured
by opposing arguments against her fee application.

When it came out against Browne’s move to gain part of the settlement last week, the class not only
argued Hansmeier’s more recent history as an attorney tainted such a money grab, but that he was
actually prohibited from participating in the case at the Ninth Circuit, meaning he has “no legitimate
claim” to fees, according to the class.

The class added that Hansmeier cannot even prove that he is allowed to be practicing law in California
considering his “long record” of sanctions and an allegedly looming possibility of disbarment, nor can he
show that Browne’s objections improved the $8.5 million settlement, the value of which has not
changed since it was first rejected by the appellate court last year.

The new version of the settlement purportedly fixes some problems highlighted by the Ninth Circuit,
including findings on the proposed settlement fund’s size, scope and impact, namely by issuing class
members a Groupon credit instead of a replacement voucher for the original deal they purchased.
The parties estimated each of the class members will receive 80 percent of the value of their initial
purchase, which they called a considerable value especially given Groupon's threat to enforce an
arbitration clause in its terms of service.

The MDL, consolidated in June 2011 from 16 suits, claimed Groupon and several of its merchant
partners violated the Electronic Funds Transfer Act, as amended by the Credit Card Accountability
Responsibility and Disclosure Act, which prohibits the sale of gift certificates with expiration periods of less than five years.

It also alleged Groupon had breached various states' consumer protection statutes and other state laws
by selling vouchers with illegal expiration dates and other illegal terms of use and failing to sufficiently
disclose the conditions of use for the vouchers.

Counsel for the class could not be reached Monday for comment.

The class is represented by John J. Stoia Jr., Rachel L. Jensen and Phong L. Tran of Robbins Geller
Rudman & Dowd LLP.

Groupon is represented by Shirli Fabbri Weiss, Christopher M. Young and Katherine J. Page of DLA
Piper LLP.

Padraigin Browne is represented by Paul R. Hansmeier of Class Justice PLLC.

The case is In re: Groupon Inc. Marketing and Sales Practices Litigation, case number 3:11-md-02238, in the U.S. District Court for the Southern District of California.

— Additional reporting by Jody Godoy, Bill Donahue, Kat Greene and Emily Field. Editing by Ben
Guilfoy.

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