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A single phone call changed the face of the employee discrimination suit against Coca-Cola Co. It was the catalyst that prompted lawyers to jettison three lead plaintiffs from the potential class action case. It’s why others are now suing Coke for $1.5 billion and promising more such suits. It is why, now that Coke has announced a tentative settlement, some employees who will be asked to sign on as part of a class remain skeptical. And it’s why Coke’s legal problems are far from over. The March 29 conference call that resulted in these far-reaching but unintended consequences was arranged for the Rev. Jesse Jackson. With mediation less than two weeks away, the civil rights leader wanted to bring together the eight plaintiffs and their lawyers to talk about the case. It was Jackson who first raised the question of what the attorneys’ cut would be if Coke agreed to settle the case as a class action, Coke security guard Gregory A. Clark recalls. Clark, who still works at Coke, was one of the first to join the suit, which was filed in 1998. Cyrus Mehri, of the Washington firm of Mehri, Malkin & Ross — one of at least five lawyers on the line — told Jackson he anticipated a 25 percent contingency fee. The lawyer’s answer surprised Clark, who had signed a contract in which the lawyers retained a third of any settlement. In an affidavit filed with the suit, Clark would later ask why Mehri “lied about the legal fees specified in the contract when asked by the Rev. Jesse Jackson.” A CONVERSATION OVERHEARD Jackson and the other plaintiffs hung up when the conference call ended, while the lawyers remained on the line. But Clark remained on the phone while they continued what they thought was a private conversation. Besides Mehri, other lawyers on the call included Jeffrey O. Bramlett, Joshua F. Thorpe and Steven J. Rosenwasser, all of Bondurant, Mixson & Elmore; and James E. Voyles of the Marietta firm DeVille, Milhollin & Voyles, Clark says. Clark recalls that after Jackson and the other seven plaintiffs hung up, his attorneys discussed $250 million as an acceptable class action settlement. No one connected with the suit has ever publicly mentioned a settlement amount. Of that $250 million, the eight named plaintiffs, including Clark, were expected to split one percent — an estimated $2.5 million, Clark recalls the lawyers saying. The lawyers, on the other hand, would take one-third of the settlement, or an estimated $87 million. The remaining $160 million would be divided among some 2,000 current and former black employees attached to Coke’s U.S. offices — an estimated $80,000 each. “Hey, I’ve got it all worked out,” Clark recalls Mehri saying. He would first tell the lead plaintiffs that their individual claims were worth no more than $20,000 each. Later, he would ask U.S. District Judge Robert W. Story to set aside $2.5 million for them as class representatives, Clark says. While that might be less than they expected, the revised amount would look much better to the plaintiffs, Clark recalls Mehri saying. Mehri acknowledged that the lead plaintiffs “won’t be pleased with that,” Clark recalls. “But what can they do?” he recalls Mehri saying. “The case will be over.” Clark’s affidavit also notes that the attorneys made “various derogatory comments” about their clients. “It was not just what they said,” Clark says. “It was almost as if they had taken us for granted � I can tell this story 10 years from now, word for word, the conversation I heard. “It was the arrogance with which they laughed and chuckled about the seriousness of our lives,” he says. “No one was looking out for those of us who put their lives on the line. No one was doing that. All they were concerned about was getting theirs and running. They were not concerned about the people in the company left to deal with its policies, left to deal with whites angry about the lawsuit who had the ability to retaliate. All they were concerned about was the money they were getting.” Asked about Clark’s recollection of the conference call he overheard, Mehri will say only, “Either he misunderstood or has chosen to misrepresent what was said on the call.” Any discussion of a 33 percent fee was “flat out not true,” Mehri says. “It was never discussed.” But he says he did talk with Jackson about a 25 percent contingency fee once the case was settled. The Fulton County Daily Report reviewed a copy of the legal contract with the lead plaintiffs, which sets aside a 33 1/3 percent contingency fee “for the clients’ individual claims” as well as the litigation expenses. But the contract also notes: “Counsel’s work for the class will be compensated, if at all, with the approval and at the direction of the court.” Mehri declined to comment on the fee discussion or on the contract, citing attorney-client privilege. He says, “Attorney-client privileges, work product privileges and mediation ground rules handicap our ability to address some of the misinformation being peddled to the class.” Other attorneys who were part of the conference call declined to comment. Enraged and hurt by what he says he had overheard, Clark promptly called the other plaintiffs that night to warn them that their lawyers could no longer be trusted. “It was a very emotional time for all of us,” says New York resident Kimberly Gray Orton, a former Coke marketing director, who remains one of the lead plaintiffs and participated in the mediation talks with the company. “We were about to start mediation. We had fought the good fight � Greg incited a riot.” CALL ‘NEVER CLEARLY ARTICULATED’ But, she adds, “He [Greg] never actually said what was said. � We spent a lot of time talking to each other, understanding what the situation was, all for something nobody heard but Greg, and he never clearly articulated.” Still, she says all of the plaintiffs were upset. As a result, two days later, on March 31, Orton wrote a letter to Mehri on behalf of the plaintiffs. “We believe we now have a major credibility gap,” the letter states. “This gap has created a sincere lack of trust; an emotional outpour[ing] and a wake [up] call for us as plaintiffs. We now believe it is imperative that we take charge of this case as if it were our business.” And because the case was yet to be certified as a class, the attorneys “are accountable to us,” the letter said. It then asked for a list of all legal expenses, a calendar of court hearings, meetings and press conferences as well as telephone logs. Orton says that although she wrote the letter, she never stopped trusting the lawyers. “The letter was written, quite frankly, because we had a hysterical Greg on our hands,” she says. That same day, Mehri attempted to mollify his rattled clients in a letter. “It is imperative that we bridge any communication or credibility gap that may exist and regain the unity and focus that has been the hallmark of our team.” But, he warned, “None of us can favor ourselves over the interests of the class, even though there is not one yet.” In that letter, now on file in federal court, Mehri also offered some confidential observations from the mediator, who had been overseeing talks between Coke and the plaintiffs’ lawyers. After meeting with Coke officials, the mediator “said they are in no hurry to settle the case,” Mehri wrote. “He also said that they had an adverse reaction to some of our cultural initiatives. Another source said that the Company’s decision-making process is so slow that [it] could take months for the case to resolve and their people are ‘shockingly out of touch with reality’ to their current overall situation. Based on that, it is our speculation that the Company will lowball us and that no settlement will be achieved anytime soon. “The mediator also said that the case would not settle unless both sides are flexible and able to compromise.” In his letter, Mehri also firmly laid out the realities of class litigation, something he said he and his co-counsel had intended to do before mediation talks with Coke began April 10. The attorneys, he said, intended to secure as much money for their clients as the law permits. But those damages were limited by “the law, the restrictions that apply to a class action case and the facts of each individual claim,” he said. “Generally the courts will not approve individual recoveries to representative plaintiffs that are unreasonably large compared to similar settlements and recoveries by class members or by individual plaintiffs in other cases,” the letter continued. “Most importantly, we cannot risk having the interests of the class jeopardized or even to appear to seek a recovery for individual claims that could be viewed as unreasonable. That could lead to disqualification.” Then he reminded his clients of the substantial financial investment that the lawyers had made, banking that they would win the case and secure a generous contingency fee. “As you can imagine, the lawyers have already invested millions of dollars of their own time and hundreds of thousands of dollars of their own money in this case,” Mehri wrote. “It now looks like more will be required of us. The details of this investment are available at any time to any plaintiffs.” Orton says Clark had trouble accepting the legal premise that any class settlement had to be fairly distributed. “It was not new news to Greg,” Orton says. “Everybody joked we were not going to get rich. I think that was unacceptable to him.” Clark, she says, hoped to realize at least $15 million. “His quote,” she says, “was, ‘I don’t care about the class.’” CLARK TURNS TO GARY Mehri’s letter did little to allay Clark’s feeling of betrayal. Certain that his lawyers were now treating him much as Coke had, Clark called Florida attorney Willie E. Gary. Jackson had earlier recommended to the plaintiffs’ lawyers that they add Gary to the team to help cut a deal with Coke. Unlike the other lawyers then involved in the case, Gary was black. Clark asked him to join the litigation. After investing two years in litigation, with mediation talks finally set to begin, Mehri and other plaintiffs’ lawyers didn’t feel they needed Gary. In a motion filed in federal court, plaintiffs’ attorneys claimed that Gary’s attempt to enter the case “was no accident; it occurred ‘[o]n the eve of mediation’ after reports that Coca-Cola was interested in reaching a financial settlement in the case.” Negotiations among the lawyers quickly broke down. Gary and Clark say those negotiations ended after Mehri told four of the plaintiffs that Gary intended to take charge of the pending negotiations. “That wasn’t true,” Gary insists. “I never said I wanted to be lead counsel.” Gary says the lawyers also couldn’t agree on fees. He says he proposed reducing the contingency fees specified in Mehri’s contracts with the plaintiffs from one-third to 25 percent. Gary says he also objected to contract clauses that made it virtually impossible for a plaintiff to drop out of the suit and make a separate settlement without the lawyers’ permission. Under terms of Mehri’s contract, plaintiffs who drop out of the suit and settle separately with Coke must turn over 25 percent of their settlement to the attorneys and pay 150 percent of their legal fees. “Cyrus boasted to me his hours alone were over $1 million,” Gary says. ‘One of two of the other lawyers said they had over $1 million, too.” It was, Gary says, “a slave contract.” H. Lamar Mixson, Mehri’s co-counsel, says the clause levies a financial penalty only if a plaintiff settles his or her own claim against the lawyers’ advice and prejudices the class litigation. Orton says she had no problems with the penalty clause after Mehri flew to New York and explained to her that Coke lawyers would probably approach each plaintiff privately and attempt to settle out of court, thus fracturing the plaintiffs’ united front. “Everybody was in agreement there ought to be some penalty for that,” she says. “This is one thing Coca-Cola has tried to do is get us not to have a consensus.” In a court brief, the plaintiffs’ lawyers voiced their own concerns about a possible hidden conflict of interest. Gary had failed to disclose that he was a major investor in a cable network that was then negotiating a substantial advertising deal with Coke. The potential conflict of interest apparently didn’t bother the plaintiffs, according to Gary, although four of them later raised concerns in sworn affidavits. On April 6, they told Mehri they wanted Gary to join the legal team. The next day, Mehri responded by telling Clark and two other plaintiffs — Motisola Malikha Abdallah and Ajibola “Tai” Laosebikan — that he was removing them from the suit. He advised them to seek other counsel. Says Mehri: “Class representatives cannot pursue narrow agendas at the expense of the class. Here the narrow agendas of a few became paramount. Fortunately, other named plaintiffs — Elvenyia Barton-Gibson, George Eddings Jr., Linda Ingram and Kimberly Gray Orton — stayed true to their duties to the class.” That opened the door for Gary, who quickly hired on as the jettisoned plaintiffs’ attorney. Banned by the court from participating in the mediation talks, Gary announced his intention to avoid class action litigation in favor of individual damage suits seeking punitive as well as actual damages. On June 14, Coca-Cola announced it had reached a previously secret settlement in principle with the four remaining plaintiffs in which the company’s American black employees would share. But everyone involved has, so far, refused to release any details of the agreement. That same day, Gary and Los Angeles lawyer Johnnie E. Cochran Jr. filed a $1.5 billion damage suit against Coke in Fulton County State Court on behalf of four African-American women. Gary insists the timing was a coincidence. (Coke last week asked to move this suit to U.S. District Court.) The potential class was now in danger of eroding. Employees who would otherwise have waited for a class settlement to become final, began calling Gary. Says Gary: “The road to final resolution is going to have to come through Willie Gary and Johnnie Cochran.”

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