The relationship between Friedman (who now heads the Friedman Law Group) and Ravelo, who had been at Willkie Farr & Gallagher, stretches back several years when the pair worked together at another firm.
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The stakes in the Visa and MasterCard case may be significantly higher as it resulted in a $6 billion settlement, already under final approval.
The judge said Friedman’s co-counsel, Reinhardt Wendorf & Blanchfield and Read McCaffrey, showed their own questionable judgment by sticking with Friedman in a brief attempting to rescue the settlement, rather than acknowledging his wrongdoing.
“NRF vigorously opposed this settlement as did many major merchants”, Duncan said in the email.
Garaufis’ opinion is full of surprising revelations, like Friedman and Ravelo’s plan to jointly represent merchants in arbitrations against American Express or to buy a Gulfstream jet and start an air charter business. Ms. Ravelo wasn’t part of the AmEx case but sat across the table from Mr. Friedman in the Visa-MasterCard suit, which is in the same court but in front of a different judge.
The blatant conflict of interest led Friedman to tell Ravelo in his emails to “burn after reading” confidential details of the negotiations and legal discovery.
Judge Garaufis described Mr. Friedman’s conduct as “egregious”.
Garaufis’ opinion should help them hone their theory.
Two lawyers who represent Friedman could not immediately be reached for comment.
“As proposed, the settlement would pay merchants nothing for alleged prior bad acts by Amex; would give merchants an extremely limited right to surcharge Amex cards … would prevent merchants from ever suing Amex again for similar antirust claims;” and would have paid attorney Friedman and other counsel $75 million for their settlement work.
Friedman was in constant touch with Ravelo during MasterCard’s settlement negotiations, according to Garaufis, providing her with the plaintiffs’ strategy memos and even volunteering to draft a paragraph on the level playing field provision for Ravelo to present to MasterCard.
Her lawyer, Steve Sadow, said in a statement Tuesday that “we will not be in a position to comment publicly until there is a ruling on the Visa/MasterCard settlement”.
Amex said it was “disappointed” by the judge’s ruling and said it would continue to fight the case.
In his decision, Judge Garaufis said that he didn’t need to consider other objections to the proposed settlement that were raised by some merchants because “the procedural unfairness and failure of adequate representation revealed by the Friedman/Ravelo communications requires disapproval of the settlement”. The class was represented by lead counsel from Robins Kaplan; Robbins Geller Rudman & Dowd; and Berger & Montague, with Friedman just in a supporting role.
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Judge Garaufis did not, however, rule on the fairness of the terms of the settlement itself.
