A lawyer representing class members in the NFL concussion settlement told a Philadelphia federal judge Tuesday that he would urge her to refer litigation funding and settlement management companies to criminal investigators if discovery into allegedly deceptive conduct turns up evidence of fraud.
Seeger Weiss attorney Christopher Seeger, who, along with Sol Weiss of Anapol Weiss, is class counsel in the litigation, said during an exploratory hearing before U.S. District Judge Anita Brody of the Eastern District of Pennsylvania that recent discovery into allegedly misleading practices indicated that some attorneys and litigation funding or management agencies may be falsifying documents, or coaching former players on how to make it appear they suffer from neurological conditions to get favorable assessments in the claims process.
Toward the end of the hour-long hearing, he told the packed courtroom that he may seek court sanctions, or even ask the court to refer issues to prosecutors.
“Some of the conduct may involve a referral to a criminal investigation,” Seeger said. “It’s very serious if these bog down the settlement with things we don’t need to be dealing with.”
However, Seeger ultimately asked the court only for the ability to conduct more discovery on the issue, and said that, although the discovery so far seems problematic, the companies may have some valid explanations for the conduct.
“This is just what we’re seeing and there may be another side to it,” he said.
The hearing focused on what discovery has revealed so far about agreements hundreds of ex-players have entered into with companies promising cash advances, or help wading through the settlement claims process in exchange for what Seeger said were allegedly usurious percentages of the retired players’ overall recovery.
Brody said she called the hearing to get more information about what she said was a matter of “great concern” regarding the allegedly deceptive practices that plaintiffs have raised. The hearing, Brody said, was purely exploratory and for class counsel to discuss their concerns.
Lawyers representing the litigation funding and settlement management companies at issue were in attendance at the hearing, but they did not make any counter-presentation to the court Tuesday.
For most of the hearing, Seeger Weiss attorney TerriAnne Benedetto outlined the discovery class counsel has obtained recently regarding 36 companies, including law firms, litigation funding companies, agencies offering settlement management services, and companies that recruit former players to be engaged by those entities.
According to the presentation, at least one of the companies offering cash advances for stakes in the former players’ overall recovery was charging close to a 100 percent fee, where one former player had been advanced $84,000 in exchange for $161,000 of that player’s eventual recovery. Another agreement Benedetto mentioned included a former player agreeing to give up $665,000 in exchange for a $343,000 cash advancement.
Benedetto said at least 200 class members have entered into agreements to assign a portion of their recovery to a company, and most of these agreements were struck in 2016—after Brody approve the $1 billion settlement agreement that is intended to compensate about 20,000 former NFL players now suffering from concussion-related brain injuries.
Benedetto also said some funders and management companies have entered into agreements with law firms to refer former players to those firms.
According to Benedetto, some texts revealed through the discovery indicates that some lawyers or members of the funding agencies might be coaching players on how to “beat the test,” so they appear to have neurocognitive issues even if they do not.
Class counsel said several times that the settlement language specifically prohibits claimants from assigning their recoveries to a third party, so any of these agreements should be voided by the court. However, Benedetto said discovery efforts have hit some roadblocks with some companies, as they claim they are third parties in the litigation and can only be compelled to turn over discovery through the subpoena process.
Litigation funding is just one of several high-profile disputes to have flared up in recent months. Some players have said claims administrators are not sticking to the settlement requirements, and numerous attorneys have begun to dispute the timing and process for dividing up $112 million that has been set aside for attorney fees.
However, near the outset of the hearing, Seeger told Brody that, when it comes to the players’ recoveries, the claims process has been running smoothly.
“Nothing is holding up the claims,” he said, saying that, so far, $130 million worth of recovery has been approved. “It’s working perfectly.”