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A pair of Southern California firms were disqualified from a class action Thursday for a striking conflict of interest: the named plaintiff in the suit was an attorney with one of the firms. Westrup Klick & Associates and its longtime co-counsel, Law Offices of Allan A. Sigel, lost their chance to press suit against Apple Computer Inc. when the Second District Court of Appeal balked at the class representative, Westrup attorney Lawrence Cagney. “We conclude that the trial court abused its discretion in denying the motion to disqualify the firms,” Justice Robert Mallano wrote, “because an insurmountable conflict of interest exists between the class representative and class counsel, on one hand, and the putative class, on the other hand.” As class representative, Cagney was obligated to seek the highest recovery for the putative class, but he and the firms may have had a clashing interest in maximizing their attorneys fees, Mallano wrote. Justice Vaino Spencer and L.A. County Superior Court Judge Steven Suzukawa, assigned to the case, concurred. Richard Ruben, who represents Apple in the case, expressed delight in the decision. “It’s obviously the right result,” said the partner in Pillsbury Winthrop’s Costa Mesa office. “These law firms have filed an awful lot of these cases in which they are naming one of their own lawyers as the plaintiffs, and we didn’t think that was appropriate.” Cagney is the named plaintiff in a class action alleging that Apple Computer collected excess sales tax from consumers in connection with a rebate program. The suit claims Apple violated the state’s unfair competition law and seeks attorneys fees under a state statute that permits them if the prevailing party’s action “resulted in the enforcement of an important right affecting the public interest.” In support of its motion to disqualify the firms, Apple Computer established that from 2003 to 2004, the two firms jointly filed 10 other class actions under the UCL in which an attorney for Westrup Klick or a relative was the named plaintiff, the court noted. From 2000 to 2002, there were three such cases, including one whose named plaintiffs were three Westrup Klick attorneys and a spouse. “Here, we are dealing with more than speculative conflicts and the appearance of impropriety,” Justice Mallano wrote. “Cagney and Westrup Klick have placed themselves in a position of divided loyalties — their own financial interest in recovering attorneys fees versus their obligation to the putative class to maximize the recovery of damages and other relief.” Apple Computer had estimated that if it was found liable, each consumer would be entitled to only $8. The appeal court noted that the Long Beach-based Westrup firm’s interests — as well as those of the L.A.-based Sigel firm — “reach beyond this case to the 13 other actions in which Westrup Klick and the Sigel firm serve or served as co-counsel; six are still active.” The court also dismissed Cagney from the case. “Because Cagney, as an attorney at Westrup Klick, may benefit from attorneys fees recovered in the other litigation,” the court held, “he is not sufficiently independent to serve as the class representative in this one.” Ruben noted that the decision could lead to disqualification motions by other companies facing similar tactics. Neither Cagney nor Sigel could be reached for comment. The case is Apple Computer Inc. v. Superior Court ( Cagney), B177857. The full text of the ruling will appear in Tuesday’s California Daily Opinion Service.

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