Junk Fax lawsuit May Proceed Despite Attorney Misconduct

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Date: Tuesday January 15, 2013 07:47:53 am
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    <p><font size=”5″><strong>Junk Fax Class Action May Proceed Despite Attorney Misconduct </strong></font><br />
    <font size=”4″><span class=”fullContentDisplay”> </span></font></p>
    <p><font size=”4″>By <a href=”http://newsandinsight.thomsonreuters.com/Legal/SearchResults.aspx?folder_id=0&search_text=%22casey+sullivan%22&#8243; title=”Casey Sullivan”>Casey Sullivan</a></font></p>
    <p><font size=”4″>
    <p>Jan 2013 A federal appeals court ruled on Wednesday that a class action accusing a magazine and book wholesaler of sending junk faxes can proceed, even though the wholesaler has accused some of the plaintiffs’ attorneys of misconduct.</p>
    <p>The 7th Circuit Court of Appeals ruled that the lawsuit, brought by two Chicago law firms, Anderson & Wanca and Bock & Hatch, can proceed against Pittsburgh-based magazine wholesaler McKnight Sales Co.</p>
    <p>Anderson & Wanca and Bock & Hatch filed the case in 2010 on behalf of a group of plaintiffs led by a Milwaukee-based financial services company, Reliable Money Order, Inc.</p>
    <p>The lawsuit accused McKnight of sending unsolicited faxes advertising its services. The faxes, said the plaintiffs, wasted their employee’s time, as well as paper and toner.</p>
    <p>The Telephone Consumer Protection Act imposes damages of $500 per fax on anyone who sends an unsolicited fax advertisement and up to $1,500 per fax if the transmission is intentional. Under the class action allegations, McKnight’s exposure is nearly $5 million, according to court papers.</p>
    <p>Last year, however, McKnight asked the 7th Circuit to dismiss the lawsuit because of the way Anderson & Wanca attorneys had recruited clients and found companies to sue.</p>
    <p>According to McKnight, the attorneys approached Caroline Abraham, the owner of a faxing service that transmits advertisements on behalf of advertisers. The attorneys offered Abraham confidentiality and used her fax transmission report to gather the names of fax senders to sue and fax recipients to serve as clients, said McKnight.</p>
    <p>Subsequently, Abraham’s lawyer, Eric Ruben, received a $5,000 check from Anthony Wanca, a partner with Anderson & Wanca, in August 2009 after his clients had provided the firm with documents it had requested, according to McKnight.</p>
    <p>In testimony, Ruben said he thought the check was a “payoff” of “questionable propriety” for the documents, according to the ruling, since producing the documents cost much less than $5,000.</p>
    <p>The three-judge panel of the 7th Circuit found that the conduct of the Anderson & Wanca attorneys gave them “serious pause,” according to the 29-page decision. But the judges said that the class action could move forward because the alleged “lapses in professionalism” by the Anderson & Wanca attorneys would not “undermine the district court’s ability to decide the case.”</p>
    <p>The panel, which included 7th Circuit Judges Joel Flaum and John Tinder and Illinois district court Judge John Tharp, also suggested that McKnight could raise the allegations with state bar authorities.</p>
    <p>If the court had declined to certify the class action, McKnight’s exposure would have been reduced to a single-claim $1,500 lawsuit, according to court papers.</p>
    <p>Lead plaintiffs’ lawyers with Anderson & Wanca and Bock and Hatch did not respond to request for comment. Eric Samore, a lawyer for McKnight, declined to comment.</p>
    <p>The lawsuit against McKnight is one of at least three other junk fax class actions, according to court papers.</p>
    <p>The case is Reliable Money Order, Inc v. McKnight Sales Company, Inc, U.S. Court of Appeals for the 7th Circuit, No. 12-2599.</p>
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