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When a unique $10 million class action settlement with Southwestern Bell Telephone was announced on May 4 in Brownsville, Texas, it seemed that everyone involved in the case walked away happy — almost everyone, that is. The case involves about 7 million class members who alleged they were overcharged by the telecommunications giant. Southwestern Bell denied that the overcharge occurred. All of the settlement money goes to a state agency — the Telecommunications Infrastructure Fund — in lieu of individual payments to each class member. The settlement money due each member is roughly equal to what it would cost to mail each person the check. The unusual part of the settlement came when the parties agreed that the agency could donate a portion of the money to improve telecommunications for legal services organizations that serve the poor. But at least one of those 7 million or so class members isn’t sure he likes the settlement in Jose Mireles, et al. v. Southwestern Bell Telephone. His name is Michael Northrup, and he also happens to be a senior staff attorney at Dallas’ Cowles & Thompson, primarily a defense firm. When Northrup got his settlement notice in the mail early last year, he says it didn’t adequately explain the resolution of the case. And when he felt he couldn’t get satisfactory answers about the case, he did what attorneys do best — he filed an appeal contesting the settlement. Since June 20, the settlement in the case has been held up while Northrup pursues his appeal. On Dec. 21, Corpus Christi’s 13th Court of Appeals dismissed Northrup’s appeal and that of another pro se non-attorney whose status as a class member is questioned by all of the parties. In response, Northrup filed a motion for rehearing on Jan. 8 with the 13th Court. “I could not tell by looking at the notice of the settlement what was going on. It was very vague and confusing,” says Northrup, who adds that he filed the appeal on his own as a class member and that the appeal has nothing to do with his firm. “From what I could tell, there seemed to be some improprieties that I felt like someone needed to look at,” alleges Northrup, who says he has represented plaintiffs and defendants in class actions before. “And one of those was the attorneys’ fees.” Northrup insists he doesn’t want a cut of the plaintiffs’ legal fees — one of the most common reasons class action settlements are held up, usually by late intervenors. He says he hasn’t even made up his mind whether the settlement is good or bad. His overriding concern, he says, is that lawyers in the case did not explain the settlement well enough to the class members. He just wants answers. But the lead plaintiffs’ lawyer who spent four months reaching a settlement with Southwestern Bell attorneys — including dealing with a last-minute intervention by legal services agencies — is not happy with Northrup’s appeal. Even though he’s spoken with Northrup several times and tried to ease his concerns, he says he doesn’t know how to satisfy him. “He just wants to torpedo a settlement, and it’s unclear why,” alleges Jeffrey M. Tillotson, a partner in Dallas’ Lynn Tillotson & Pinker. “And the best I can tell, he’s just mad, and he doesn’t want anyone to get any of it.” “I’ve done lots of class actions and I’ve seen lots of objectors. But this is the first one who has chosen to injure the class without regard for what he’s doing,” says Tillotson, who adds that he’s offered repeatedly to meet with Northrup and explain the settlement to him. “His goal seems to be to derail the entire settlement.” Northrup’s allegation that the plaintiffs’ lawyers’ $2 million fee is out of line is just that, Tillotson says — out of line. Tillotson says his firm took a 20 percent cut of the settlement when they could have taken up to 33 percent. “Everyone told me I was nuts,” Tillotson says. “The testimony at the [fairness] hearing said, ‘These guys are shooting low.’ “ While Cowles & Thompson is not involved in the appeal, Northrup’s actions don’t concern partner Jim Cowles. “He’s just exercising his rights,” says Cowles, who notes that Northrup has spent his own money pursuing the appeal. “I admire somebody like that.” Northrup says he has spent thousands of dollars on the appeal. While Cowles admires Northrup, Tillotson remains perplexed by the class member’s actions. “Is he a plant by Southwestern Bell? No. Is Cowles & Thompson interested in objecting to the class action? No, because they’ve settled many of them,” Tillotson says. “I just think it’s a personal deal for him.” NO SHOW If Northrup wants his settlement appeal heard, he’s going to have to put up a $1 million bond, according to a Dec. 11 order by 357th District Judge Rogelio Valdez of Brownsville. As part of the bond order, Valdez noted that Northrup has not appeared in the case or contacted the court to explain his non-appearance. Valdez also ordered Northrup to answer the plaintiffs’ discovery requests. “Normally, we all accept all of these pleadings in good faith,” Valdez says of Northrup’s appeal. “I won’t say that I was frustrated. But if you want a hearing and you don’t show up, it leads us to believe they’re really not serious.” However, Northrup also appealed Valdez’s order. The 13th Court ruled that because Northrup did not formally intervene in the case — much less make an appearance — he has no right to appeal the settlement. “He did not intervene in the class prior to the fairness hearing on the settlement, nor did he appear at the hearing or opt out of the class,” the court wrote in a per curiam opinion. “This court also holds that an unnamed class member may not appeal because he is not — technically — a party to the suit unless he has filed a formal intervention prior to approval of the settlement.” But that decision doesn’t deter Northrup. He says he will appeal to the Texas Supreme Court if necessary. The 13th Court’s opinion addressed one question all of the parties asked: Why hasn’t Northrup appeared in the Brownsville court to assert his claims? “That’s what the fairness hearing is about. And if he did file an objection, he did know when the fairness hearing was, and he didn’t appear,” says David Brown, in-house counsel for Southwestern Bell. “He’s put in a lot of work. We just don’t understand why … . It’s been our goal since we determined to settle the case that we get it finalized. And this is one more hurdle that was unexpected.” Northrup says he shouldn’t have to appear. “Ordinarily, the right to object to a settlement in a class action lawsuit is not contingent on being in court,” Northrup says. “The whole idea of a class action is the claims of the class members are so small that none of them bring their actions individually.” Meanwhile, attorneys with legal aid organizations are anxiously awaiting a resolution to the case. Legal aid organizations intervened in the case last year and succeeded in having the settlement money be paid directly to the Telecommunications Infrastructure Fund, a state agency that is responsible for high-speed telecommunications and Internet services for libraries of higher education institutions and certain medical facilities. According to the settlement, TIF is encouraged to spend 20 percent of the $10 million on improving telecommunications for legal services. “We’re anxious to see the whole matter resolved,” says Randy Chapman, executive director of Austin’s Texas Legal Services Center, a nonfederally funded legal services organization that intervened in the case. Adds Chapman, “In the meantime, we’re thrilled at the prospect of technology improvements for legal aid and pro bono programs when this matter is finally resolved.”

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