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JSH&G listed as ‘Highly Recommended’

By tbartlett on January 4, 2012

Legal Media Group’s Benchmark Litigation publication has long compiled a consensus recommendation, by state, of “Recommended” and “Highly Recommended” law firms, as well as an identification of “Litigation Stars” in each market. Recently, LMG published a Benchmark Plaintiff listing of consensus recommendations for firms providing predominantly plaintiff-oriented legal services. In Louisiana, Jones, Swanson, Huddell & Garrison was one of only four firms to receive the “Highly Recommended” designation. Additionally, two of JSH&G’s partners, Gladstone Jones and Lynn Swanson, were named to the listing of “Litigation Stars” in Louisiana.

The publication quotes a firm competitor as characterizing JSH&G: “They take on the challenges and fight the fight.” In another quote from a competitor, Benchmark Plaintiff reports the assessment that “Jones Swanson has done some big plaintiffs work in the last couple years. … Gladstone Jones is the star.”

In addition to the new accolade in Benchmark Plaintiff, JSH&G also maintains its “Recommended” label in the general Benchmark Litigation listing.

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New Orleans Bankruptcy Judge Takes Wells Fargo to Task for “Highly Reprehensible” Conduct

By klasky on May 1, 2012

Elizabeth Magner, a Bankruptcy Judge in New Orleans’ Eastern District, ordered Wells Fargo to pay a homeowner more than $3.1 million in punitive damages in a scathing opinion issued in early April.  Michael L. Jones v. Wells Fargo Home Mortgage, Inc., 06-1093, United States Bankruptcy Court for the Eastern District of Louisiana.  This ruling was the culmination of more than five years of litigation with Mr. Jones, but more broadly the Court found that Wells Fargo had “taken advantage of borrowers who rely on it to accurately apply payments and calculate the amounts owed;” refused “to voluntarily correct its errors” and “when exposed, it revealed its true corporate character by denying any obligation to correct its past transgressions and mounting a legal assault [to] ensure it never had to.”

The evidence established that Wells Fargo violated the Bankruptcy Court’s orders by misapplying payments made by the debtor homeowner to “undisclosed postpetition fees and costs not authorized by the Court.”  Furthermore, it was Wells Fargo’s standard practice for every loan in its portfolio to apply payments first to fees and costs assessed on mortgage loans and then to outstanding principal, accrued interest and escrowed costs which was “directly contrary to the terms of…Wells Fargo’s standard form mortgages and notes.”  This improper application “resulted in the assessment of additional interest, default fees and costs against the loan.”

Even more galling to Judge Magner was the fact that Wells Fargo had done nothing to correct this practice and found that Wells Fargo’s conduct with regard to Mr. Jones was willful and egregious.  “Wells Fargo admitted that these actions were part of its normal course of conduct, practiced in perhaps thousands of cases.”  The Court also found that Wells Fargo’s “conduct is clandestine.  Rather than provide Jones with a complete history of his debt on an ongoing basis, Wells Fargo simply stopped communicating with Jones once it deemed him in default…Only through litigation was this practice discovered.  Wells Fargo admitted to the same practices for all other loans in bankruptcy or default.  As a result, it is unlikely that most debtors will be able to discern problems with their accounts…”.

Judge Magner took Wells Fargo to task for its stubbornness and willful refusal to change its practices or correct its mistakes without the significant time and expense of a lengthy court battle.  The attorneys at Jones, Swanson, Huddell & Garrison are committed to fighting battles like these for our clients, and are eager to confront companies like Wells Fargo for similar misconduct.

In particular, if your mortgage company foreclosed on your house while you had a loan modification application pending, please contact Katie Lasky at (504) 523-2500 to discuss your possible remedies and how JSHG might be able to help you.

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JSHG Partner Gladstone Jones Quoted in New York Times Article on BP Oil Spill Settlement

By klasky on March 20, 2012

Gladstone Jones, a founding partner of Jones, Swanson, Huddell & Garrison, was quoted in a March 19th New York Times article about the proposed BP settlement and its exclusion of moratorium claims.

“It is time for BP to pay these companies or it is time for the court to let me try my cases,” said Gladstone N. Jones III, a New Orleans lawyer representing many businesses that suffered a financial sting from the moratorium.

A full text of the article is available here:   BP Settlement, Milestone for Some Victims, a Setback for Others

More information about Jones Swanson’s work on behalf of its clients damaged by the BP oil spill is also available at www.BPvictims.com or from Lisa Rodriguez at (504) 523-2500.

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Update on BP Settlement and Treatment of “Moratorium Claims”

By klasky on March 13, 2012

On March 2, 2012, BP and the Court announced a class-wide settlement in principle for two plaintiffs’ classes with regard to the BP oil spill.  Of special interest to our clients and friends is the class of plaintiffs claiming economic damages as a result of the spill.  The settlement will provide a mechanism to pay claims to businesses and individuals who suffered economic losses after the oil spill.  The new class settlement facility will have a lower threshold to show economic damages causation related to the oil spill as well as more generous terms for calculating economic damages than that used by the Gulf Coast Claims Facility (“GCCF”) overseen by Kenneth Feinberg.  The new facility will also have what has been termed a Risk Transfer Premium (“RTP”), which will be a multiplier of actual damages shown for final payment.  The new facility will also be administered locally, and transparency is promised with regard to its calculations.

The new facility will be open soon, and claims may be made with the new facility even if a prior claim was not made with the GCCF.  We will continue to work closely with our contacts at the GCCF until its work is transitioned to the new facility. 

Since the April 20, 2010 explosion aboard the Deepwater Horizon and the ensuing oil spill, we have worked partners to spearhead the first litigation efforts in Louisiana with the results of:  (1) securing an important Order from the Honorable Judge Ginger Berrigan voiding objectionable release language for the fishermen, (2) obtaining stipulations regarding BP’s clean-up procedures and (3) requesting that a local judge exercise jurisdiction over these matters or, alternatively, appoint a special master pending a decision regarding a multi-district litigation venue.  That last effort led to direct discussions with counsel for BP, which resulted in important compromises for all claimants in the earliest days of the Oil Spill litigation. 

Since the transfer to and consolidation of the litigation against BP in the United States District Court for the Eastern District of Louisiana in New Orleans, we and the members of our group have continued to serve in leadership roles in the litigation, chairing and contributing to several working groups appointed by the Plaintiffs’ Steering Committee.  Among those groups is the GCCF Working Group, a group charged with and aimed specifically at monitoring the Gulf Coast Claims Facility and its processing of administrative claims against BP. As a result of that work, our group gained information regarding the claims process that uniquely situated us in assisting our clients in filing claims with that facility.  In addition, we have teamed with economists, both locally and nationally, to assist us in collecting damage information, analyzing that information, composing the most effective claims possible, and expediting those claims through the Deepwater Horizon Oil Spill Gulf Coast Claims Facility.  We have no doubt that we will be just as adept at navigating the Court-supervised claims process.

Of import to many of our clients, we will also assist claimants who do not fall in the currently proposed class definition, including those with so-called “moratorium claims.”  To date, those who suffered economic losses resulting from the temporary moratorium of all deepwater drilling in the wake of the oil spill have been excluded from recovering damages from BP.  Also excluded are some of the claims of those who work in the shallow-water Gulf of Mexico, where a moratorium was not imposed, and who suffered economic damages as a result of the chill in activity in the Gulf.  We remain committed to pursuing a remedy for all of our clients and friends who suffered damage as a result of the Deepwater Horizon Drilling Rig Oil Spill Disaster, whether through the claims process or in court.

Please call (504) 523-2500 to learn more about our efforts assisting those affected by the BP Oil Spill.

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BP Settlement in Principle Promises Better Claims Process for Victims of the 2010 Oil Spill

By klasky on March 7, 2012

Following extensive negotiation, the Plaintiffs’ Steering Committee (PSC) for the multi-district litigation arising out of the Deepwater Horizon disaster has reached a settlement in principle with BP that, if approved by the court, would compensate hundreds of thousands of individuals and businesses. The settlement promises a more transparent and claimant-friendly process that will replace the Gulf Coast Claims Facility (“GCCF”) in as soon as 45 days. According to a press release from the PSC, “[u]nder the new program, eligible claimants will generally be paid greater benefits than under the GCCF.”

The settlement in principle is fully funded by BP and provides no cap on the amount that BP will ultimately pay. The settlement will be supervised by the Honorable Carl Barbier from the Eastern District of Louisiana, who has overseen the extensive litigation to date. The settlement provides for two separate classes- one for businesses and individuals who have suffered economic loss, including lost profits and property damage; and one to compensate those with medical claims which includes 21 years of regular medical consultation. Under the settlement in principle, claimants may participate in one or both settlement programs.

Claimants who have already submitted claims to the GCCF need not resubmit new claims to the settlement program, as all data will be transferred to the new claims facility. In fact, those who have received a final offer from the GCCF, but have not yet signed a release, are able to receive 60% of their award immediately and then participate in the new claims process wherein they can choose to accept the remainder of their GCCF award or request additional compensation through the settlement program. The expectation is that the settlement claims process will provide claimants with more generous and fair offers than those given by the GCCF.

The attorneys of Jones, Swanson, Huddell & Garrison, L.L.C. have been actively pursuing economic loss claims for their clients, in association with two of the premier law firms in the Gulf South- Fishman Haygood Phelps Walmsley Willis & Swanson, L.L.P and Sher Garner Cahill Richter Klein & Hilbert, L.L.C- and will continue to guide their clients through the claims process ultimately established through the settlement if approved. Lynn Swanson, a founding partner of Jones Swanson, Huddell & Garrison, who has served as a Work Group Coordinator for the GCCF Outreach work group of the PSC, said: “We are optimistic that this settlement will increase our clients’ odds of being justly compensated for the damages they have suffered as a result of BP’s actions and are anxious to review the full details. As always, we will continue to work to achieve justice for our clients both through the claims process and litigation if necessary.”

If you need assistance with a BP claim, please contact Lisa Rodriguez at (504) 523-2500.

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Life Partner Holdings subject of SEC complaint

By klasky on January 26, 2012

Texas-based Life Partner Holdings Inc., one of the industry leaders in the secondary life insurance market, along with several of its senior executives, is facing charges of improper accounting, disclosure violations, and insider trading in a complaint recently filed by the Securities and Exchange Commission in federal court in Waco, Texas. The SEC alleges that the fraud, dating back to 2006, artificially inflated the company’s revenues and profit margins and misled shareholders about the sustainability of the company’s financials as well as the “consumer demand for the life settlement investments that the Company brokers.”

Life Partners is a publicly traded company listed on the Nasdaq Stock Market and topped Fortune magazine’s 2009 list of fastest-growing small companies in the United States. According to Life Partners’ website, a “life settlement is simply the sale of an existing life insurance policy by a terminally ill or elderly person to another party. The price of the policy is negotiated and sold by the owner at a discount to the face amount. The purchaser then collects the full amount paid out under the policy.” According to the SEC, in a typical life settlement transaction, Life Partners identified “a number of investors who purchase fractional interests in a given policy. Included in the purchase price that investors pay are funds sufficient to cover future premium payments necessary to maintain the policy during the insured’s estimated life expectancy” which is placed into an escrow account. This unique investment market nearly doubled between 2006 and 2007, yet was significantly weakened by the general economic downturn in 2009.

Criticism of Life Partners and the secondary life insurance market is not new. Critics decry the market as effectively “betting on death.” The market is also virtually unregulated, which can lead to the potential for abuse of both policy sellers and buyers. For example, insurance companies have vigorously prosecuted individuals who were alleged to have purchased life insurance policies solely for the purpose of selling them on the secondary market, the third parties who brokered the transactions, and even the good faith third party purchasers, seeking to void those policies. Furthermore, without regulation, elderly or terminally ill policy holders may be pressured into selling their policies for woefully low prices while buyers may be duped into paying too much for policies based upon inflated valuations.

In December 2010, alleged problems with Life Partners’ life-expectancy estimates were explored in a front page article in The Wall Street Journal. In its examination of policies Life Partners brokered in 2002, the Journal found that 95% of the insured people were still living after the life-expectancy period estimated by Life Partners’ physician. As a result, the Journal reported, owners of those policies weren’t likely to enjoy the 10% to 15% annual returns promised by Life Partners.

Similar to the Wall Street Journal exposé, the SEC alleges that Life Partners, and specifically its chairman and CEO, general counsel and chief financial officer “misled shareholders by failing to disclose a significant risk to Life Partners’ business: the company was systematically and materially underestimating the life expectancy estimates it used to price transactions.” Life expectancy estimates are a critical factor in the life settlement transaction and “in determining the purchase price that investors are willing to pay” because the longer an insured’s life expectancy, the more investors will have to pay in premiums to keep the policies in good standing. As the SEC explained in its complaint, investors “will pay more to acquire life settlements that have shorter life expectancies, as they receive their fractional interest in the death benefit sooner, and the anticipated period of time during which they have to make premium payments to maintain the policy is shorter.” As a result, by underestimating life expectancies, Life Partners was able to artificially inflate the prices that investors were willing to pay for the policies.

“Life Partners duped its shareholders by employing an unqualified medical doctor to assign baseless life expectancy estimates to the underlying insurance policies,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “This deception misled shareholders into thinking that the company’s revenue model was sustainable when in fact it was illusory.”

Life Partners and its officers are emphatically denying the SEC’s allegations. Life Partners’ Chairman, Brian Pardo, who was named in the SEC’s complaint, stated, “It is very disappointing that the SEC has chosen to pursue litigation over issues that we believe have no merit and financial presentation issues that we do not believe are material. We have always done our best to deliver value to our shareholders and to run an honest and transparent company. We intend to vigorously defend ourselves against these meritless claims.”

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