Cases alleging class action racketeering scheme land in DC court

By Mike Scarcella

WASHINGTON, Dec 12 (Reuters) - A U.S. federal judge in Washington was appointed on Friday to oversee at least five lawsuits accusing major class action settlement administrators of running a kickback scheme with banks that distribute settlement funds.

In an order , the federal Judicial Panel on Multidistrict Litigation selected U.S. District Judge John Bates to preside over the cases, which the panel said presented similar antitrust and racketeering claims.

Many of the suits allege that service providers Epiq Systems, Angeion Group and JND Legal Administration took illegal payments from Huntington National Bank and Western Alliance Bank to maintain dominance in the settlement administration market.

Epiq, Angeion, JND, Huntington and Western Alliance did not immediately respond to requests for comment, and neither did two lead attorneys who filed lawsuits in recent months.

One of the lead lawyers, David Boies, had urged the panel to consolidate the lawsuits in the Northern District of California, where his firm has filed cases. The firm also brought cases in federal courts in New York and Florida. Boies argued most defendants are based on the West Coast.

Another group, led by plaintiffs’ lawyer Christopher Seeger, sought to centralize the litigation in the Eastern District of Pennsylvania.

The lawsuits focus on a key part of class action litigation: the administration and distribution of settlement funds to thousands and sometimes millions of class members.

Some major administrators have diverted settlement deposits to Huntington and Western Alliance for years, according to the lawsuits, and in exchange received a cut of profits from them. The lawsuits claimed the settlement administrators reaped hundreds of millions of dollars in undisclosed kickbacks and compensation from the bank defendants, eroding payouts to class members.

Bates has served on the D.C. federal bench since 2001. A former assistant U.S. attorney in Washington and past partner at law firm Miller & Chevalier, he served as deputy independent counsel under Kenneth Starr from 1995 to 1997.

(Reporting by Mike Scarcella)