Class actions don’t necessarily look like emotional contests from afar, but they can be. Plaintiffs’ counsel is risking work and capital with no certain return on their investment. The defendant has been placed in high-stakes litigation based on what appear (to it) to be baseless allegations. As a result, it can be hard for each side not to take things personally. But how hard should a defendant hit back against unscrupulous plaintiffs’ counsel? Especially if – from the defendant’s standpoint – they all look unscrupulous?

I can’t think of another question that begs so much for the answer "it depends." But there is at least one clear set of circumstances out there.

In Hamm v. TBC Corp., the defendant sought sanctions against plaintiff’s counsel for soliciting plaintiff’s counsel for a collective action under the Fair Labor Standards Act. (The FLSA, 29 U.S.C. § 216(b), authorizes “collective actions.” They’re similar to Rule 23 class actions, but plaintiffs opt in instead of opting out, and the process favors certification more than Rule 23.)

According to the Magistrate Judge’s summary of the sanctions hearing, an employee of a tire company got a call on his cell phone. The woman on the other end of the line identified herself as working for plaintiff’s counsel, said she got his number from another employee, and explained that her firm was suing the tire company for unpaid overtime earned when employees worked through their lunch breaks, and asked if he’d like to join the lawsuit. The employee declined the offer. (According to the court, he said the allegations were “bull****.”)

That was when the defendant filed its motion for sanctions. The court took the charges seriously enough to hold two hearings, one of which included live testimony from a number of witnesses. The defendants put on four employees, each of whom claimed he was called by the same woman, who turned out to be a paralegal at the plaintiff’s firm. Plaintiffs tried to explain the calls away as a misunderstanding. They assured the court that they had a strict no-solicitation policy, and said that the calls were really just their attempt to investigate the class claims before filing.

The court believed the defendants. It pointed out several inconsistencies in testimony, and noted that the Southern District of Florida accounted for 28.7% of all FLSA cases, which it considered powerful circumstantial evidence that the volume was attorney-driven. As a result, it ordered sanctions against the plaintiff’s firm.

Despite its success, this is not a tactic every defendant should try. The defendant here was fighting on extremely favorable terrain. Florida has a strict no-solicitation rule. Plaintiff’s counsel made some serious tactical blunders when briefing the case. And there was compelling circumstantial evidence that plaintiff’s counsel had violated this rule before.

So what’s the lesson here?

  1. If you’re going to attack opposing counsel, make sure you are flawless on the law and the facts
  2. If you are flawless on the law and the facts — don’t shy away from holding your opponent to the rules of the game