Class Actions Brief Blog

In order to meet the requirements of due process, a class representative must be “adequate” and able to represent the class of individuals that may be bound by the judgment rendered in a class action. And class counsel, in turn, must not suffer from conflicts and must demonstrate that he or she is capable of adequately representing the class. Because fee agreements are not typically subject to the attorney-client privilege, does that mean that defendants – in a class action – can obtain in discovery a copy of the fee agreement between the putative class representative and class counsel? Judge Bledsoe, in a case of first impression in the North Carolina court system, held “maybe,” but not immediately and not without a good reason. This is not an easily answered question. As one court concluded: “There is nothing magical or privileged about a fee agreement in class action litigation.” And because the question arose in the Business Court on a motion to compel, the “relevance” inquiry is not an evidential one but is watered down by the breadth of Rule 26’s scope. But – relying on considerable federal authority – the Business Court held that, absent the articulation by defendants of a good reason to see the fee agreement with plaintiffs’ counsel, they could not simply indulge their curiosity. The ruling was not absolute, though – Judge Bledsoe denied the motion to compel without prejudice to later renewal. The lesson is this: If you want to see the fee agreement with class counsel, be prepared to make a showing of what issues in the case it relates to beyond simply “the adequacy of counsel.” Judge Bledsoe’s ruling contains a number of other points relevant to business litigation generally, each of which is covered by Mack Sperling’s excellent post in the North Carolina Business Litigation Report.