Attorneys who specialize in representing the underdog in lawsuits against large corporations received a taste of their own medicine when a jury found in favor of small private software company Cataphora, in a lawsuit brought by the company against a group of the nation’s leading plaintiffs’ bar attorneys. The trial jury found that, in failing to pay Cataphora money they owed, the attorneys had breached a signed contract.
The case casts a rather unusual light on the debate for tort reform, and the manner in which frivolous lawsuits benefit the legal industry more than the injured party. “These attorneys claim they represent the ‘little guy,’” commented Cataphora Internal Counsel Roger Chadderdon, “although most people agree that the main beneficiaries in their cases seem inevitably to be the lawyers themselves. In this case the little guy – employee-owned Cataphora – took them on and won.”
San Francisco attorney William Webb Farrer presented Cataphora’s case in Cataphora, Inc. v. Jerrold Seth Parker, et al. before the United States District Court, Northern Division, and Judge Bernard Zimmerman signed the judgment in favor of Cataphora. In addition to Mr. Parker, other defendants included Dawn M. Barrios, Russ Herman, Gerald E. Meunier, and Hugh P. Lambert, all of New Orleans, LA; Daniel E. Becnel, Jr. of Laplace, LA; Victor Manuel Diaz of Miami, FL; Ervin Amanda Gonzalez of Cora Gables, FL; Ben Gordon of Pensacola, FL; Arnold Levin of Philadelphia, PA; James Robert Reeves of Biloxi, MS; Christopher Seeger of New York, NY; Bruce William Steckler of Dallas, TX; and Scott Weinstein of Ft. Meyers, FL.
The case arose when a group of leading plaintiffs’ bar attorneys hired Cataphora and then refused to pay the company in accordance with the terms of the contract they had signed. After repeated unsuccessful efforts to collect the money due to it, Cataphora was left with the choice of forgoing the money or bringing costly legal action.
“The attitude of the defendants seemed to be that a small company like Cataphora wouldn’t dare to bring suit against a group of such prominent and experienced litigation attorneys, so they could get away with simply not paying us,” Chadderdon added. “It seems that they felt that they had the deep pockets and could afford the cost of the action much more readily than Cataphora, and hoped to win by attrition. As a small company, we have tried to minimize our legal fees, but they have nevertheless mounted up to hundreds of thousands of dollars, around three times the amount of money we were originally owed. We are pleased that the jury clearly and quickly saw who is in the right in this matter, finding for Cataphora and awarding the company the monies owed, plus costs.”
High-profile plaintiffs’ bar attorneys often specialize in representing large numbers of individuals in lawsuits against large corporate defendants. This is commonly done under the umbrella of a class action lawsuit. In these lawsuits, attorneys sue organizations – typically corporations – on behalf of large groups of individuals. The represented individuals frequently receive minimal compensation, if any, to the extent that the term “coupon settlement” is commonly used, meaning that the compensation comes in the form of a low-value gift certificate. By contrast, in many cases, attorneys’ fees and administrative expenses amount to more than 50 percent of the settlement costs. As such, this is a lucrative money-making business for the attorneys.
The defendants in this case were all members of the Plaintiffs’ Steering Committee, spearheading litigation related to the import of drywall from China. Many homeowners suffered significantly from the effects of sulfurous emissions emanating from this material. Cataphora was originally engaged by the defendants to assist with the technically challenging task of analyzing the data relating to this case.
Public statements by counsel for the defendants suggest that they are considering an appeal. Cataphora CEO Elizabeth Charnock commented: “The issue was very simple in our view, and the jury clearly agreed, finding for us on all counts. These attorneys signed a contract with Cataphora and I hope they will, at long last, do the right thing and abide by its terms. We simply want them to accept the unequivocal judgment of the trial jury and pay Cataphora the monies the jury has determined are due to us.”
About Cataphora, Inc.
Cataphora develops innovative software technologies for finding patterns and anomalies in digital communications. It has honed these technologies over the course of nearly a decade of analyzing huge volumes of data for large organizations. The technology provides the intelligence necessary to tackle the challenges associated with Big Data, discerning context across multiple sources of electronic data such as emails, documents, IM, phone logs, text messages and social networks. Founded in 2002, Cataphora has been awarded several patents and is headquartered in Menlo Park, California. For more information please visit www.cataphora.com.
Cataphora divested its successful legal market business to Ernst & Young in May, 2011.
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