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  1. Law 360 February 22, 2016
  3. Atty Calls Groupon Class Outcry Over Husband’s Fee Baseless
  4. By Kali Hays
  6. Law360, New York (February 22, 2016, 5:46 PM ET) -- An attorney claiming she aided an $8.5 million
  7. deal ending multidistrict litigation between consumers and Groupon Inc. over short-dated online
  8. vouchers on Friday urged a California federal court to ignore the consumers outcry over paying her
  9. part of the settlement, saying attacks on her counsel and husband are unwarranted.
  11. Represented by her husband Paul R. Hansmeier, attorney Padraigin Browne told the court class
  12. opposition to her application for a $7,500 service award and a 10 percent cut of the recent
  13. settlement deal with Groupon is improperly based on “reputational attacks” against her husband over
  14. his involvement with an alleged “porno trolling collective.”
  16. Hansmeier is one of a trio of lawyers that founded Prenda Law, a nonpracticing entity that bought up
  17. rights to adult films through shell companies and then threatened to sue thousands of individuals
  18. that downloaded them online, regularly resulting in out-of-court settlement deals. Hansmeier has been
  19. sanctioned by multiple courts and Prenda’s bankruptcy was converted in December to Chapter 7.
  21. Despite the damaged reputation of her husband however, Browne argued that the class has failed
  22. entirely to “identify or even allege misconduct in this case” and that objections she made on the class’s
  23. behalf at the Ninth Circuit resulted in a settlement that provides “significantly greater benefit” to the
  24. class, according to the motion.
  26. “Objections play an important role, as this case demonstrates, and we hope that the district court
  27. recognizes the valuable role that my client played,” Hansmeier told Law360 Monday.
  28. In her brief, Browne said that “even if the court were to find that [Hansmeier] has the worst reputation
  29. of any attorney in the United States” it would be an abuse of discretion to use that as reason to deny
  30. her fee.
  32. Moreover, Browne said if the court were to strike her fee application based on the allegedly bad faith
  33. arguments made by the class, it would lead to an impermissible interference with her right to retain
  34. counsel of her choice, according to the motion.
  36. Browne also asked that class counsel be ordered to “personally satisfy” the costs and fees she’s uncured
  37. by opposing arguments against her fee application.
  39. When it came out against Browne’s move to gain part of the settlement last week, the class not only
  40. argued Hansmeier’s more recent history as an attorney tainted such a money grab, but that he was
  41. actually prohibited from participating in the case at the Ninth Circuit, meaning he has “no legitimate
  42. claim” to fees, according to the class.
  44. The class added that Hansmeier cannot even prove that he is allowed to be practicing law in California
  45. considering his “long record” of sanctions and an allegedly looming possibility of disbarment, nor can he
  46. show that Browne’s objections improved the $8.5 million settlement, the value of which has not
  47. changed since it was first rejected by the appellate court last year.
  49. The new version of the settlement purportedly fixes some problems highlighted by the Ninth Circuit,
  50. including findings on the proposed settlement fund’s size, scope and impact, namely by issuing class
  51. members a Groupon credit instead of a replacement voucher for the original deal they purchased.
  52. The parties estimated each of the class members will receive 80 percent of the value of their initial
  53. purchase, which they called a considerable value especially given Groupon's threat to enforce an
  54. arbitration clause in its terms of service.
  56. The MDL, consolidated in June 2011 from 16 suits, claimed Groupon and several of its merchant
  57. partners violated the Electronic Funds Transfer Act, as amended by the Credit Card Accountability
  58. Responsibility and Disclosure Act, which prohibits the sale of gift certificates with expiration periods of less than five years.
  60. It also alleged Groupon had breached various states' consumer protection statutes and other state laws
  61. by selling vouchers with illegal expiration dates and other illegal terms of use and failing to sufficiently
  62. disclose the conditions of use for the vouchers.
  64. Counsel for the class could not be reached Monday for comment.
  66. The class is represented by John J. Stoia Jr., Rachel L. Jensen and Phong L. Tran of Robbins Geller
  67. Rudman & Dowd LLP.
  69. Groupon is represented by Shirli Fabbri Weiss, Christopher M. Young and Katherine J. Page of DLA
  70. Piper LLP.
  72. Padraigin Browne is represented by Paul R. Hansmeier of Class Justice PLLC.
  74. 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.
  76. — Additional reporting by Jody Godoy, Bill Donahue, Kat Greene and Emily Field. Editing by Ben
  77. Guilfoy.
  79. All Content © 2003-2016, Portfolio Media, Inc
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