Pickup Games

How a giant lawsuit against General Motors could leave lawyers with millions - and Texas truck owners breathing fumes

Leggat refused to permit the Dallas lawyers to question Baxter or the GM lawyers under oath about the settlement. "We would like to talk with them about what was on the table, what was rejected, what was offered, how vigorously they fought," Stanley told the judge. It got him nowhere.

Gardner offered this view of Baxter's proposed settlement: "The only way to get rid of a car, as class counsel has told them, is to...go back to the folks that sold them the dangerous pickup to start with and pay them some more money that they are not ready to pay and in many instances that they simply cannot afford."

At times, Judge Leggat even joined in with Baxter to suggest the Dallas lawyers had pecuniary motives. "Mr. Stanley," she asked at one point from the bench, "isn't it true--you say you filed this pro bono, but you have also filed on behalf of all those that you are representing pro bono, a class action in Dallas, have you not?"

Lawyers for the cities of Dallas and Austin were also opposing the settlement at the September hearing. Dallas has about 300 GM trucks in its fleets, Austin about 190. For the cities, GM's $1,000 coupons were of limited value, particularly since the discounts were only valid for 15 months. That was too short a time, the city attorneys told the court, for any fleet owner to replace all the trucks and thus take full advantage of the coupons.

Ron Stutes, an assistant city attorney for the city of Dallas, expressed dismay at Baxter's fees. "Imagine if your lawyer came to you and said, 'I negotiated the best I could for you. You get nothing. I get $9 million dollars.' Would you feel fairly treated?

"I don't think so."
Judge Leggat took just four working days to give her blessing to the Baxter-GM agreement--$9.5 million in attorney fees and all.

It was then, as they prepared to appeal Leggat's ruling, that Stanley and Gardner contend the "hometowning" in Marshall really commenced.

Shortly after Leggat's ruling, Baxter, the Dallas lawyers, and a Marshall court reporter got into a major squabble over how large a bond the objectors had to buy to cover the copying costs for appealing the judge's decision.

The court reporter insisted the Dallas lawyers needed $38,000 to cover the copying charges for appeal--nearly 40 times the amount the Texas Rules of Civil Procedure normally require.

Stanley and Gardner argued that Baxter and Crowley had stuffed 74,000 pages of exhibits into the court record just hours before the final settlement hearing--just to ratchet up the costs of appeal. The Dallas lawyers claimed the court reporter was working on Baxter's behalf to make an appeal prohibitively expensive--a charge she denied.

"If you're going to play with the big boys," the court reporter told Texas Lawyer, which closely covered the conflict, "you'd better bring your wallet."

The Dallas lawyers wanted the charge cut to $965; Judge Leggat would only reduce it to $23,000. Stanley and Gardner took the matter to the Texarkana court of appeals. On March 9, they cut the bond to $7,500.

But the prospect of high appeal costs had already thinned the ranks of objectors. The city of Dallas pulled out of the case in January 1994. Austin followed two months later.

Stanley contends the cities pulled out partly because the Dallas law firm of Strasburger & Price, representing GM, lobbied councilmembers of both cities.

Dallas assistant city attorney Stutes says he advised his council to drop out because he didn't expect the bond to be reduced. Concedes Stutes: "I incorrectly judged the chance of winning."

That misjudgment became apparent in June, when the Texarkana appeals court overturned Judge Leggat, throwing out the Baxter-GM settlement.

The appeals court embraced Gardner and Stanley's position that Baxter had struck a lousy deal for owners of the GM trucks. "It is questionable whether a certificate that requires a person to spend from $7,000 to $33,000 for a discretionary, nonessential purchase in order to receive a $1,000 discount on that purchase has any value at all," the order stated.

The panel also cited Baxter's failure to disclose his fee in the settlement notice he sent to Texas truck owners. "We find that the notice is deficient and that it should have been disclosed to the class members in clear and certain terms the amount of the attorneys' fees agreed to or proposed as part of the settlement," the order stated. "Attorneys' fees, even though they may not be technically deducted from the amount paid to the litigants, represent an integral part of the overall amount that the settling party is willing to pay, and as such, they have a direct effect on the net amount that will ultimately be paid to the litigants."

As expected, Baxter and GM--temporarily allies--have asked the Texas Supreme Court to overturn the appeals court decision.

They have found support in a surprisingly wide variety of legal circles: whatever side of the fence they're on, it seems, lawyers don't like other lawyers meddling in their negotiations with an opposing party.

For only the second time ever, the Texas Trial Lawyers Association and the Texas Association of Defense Counsel have filed a joint brief in the appeal. They are backing GM and Baxter. Strasburger & Price attorney Michael Jung, whose firm represents GM, hopefully suggests it may prove influential. "When you get groups of lawyers who are usually battling each other on the same side," he says, "that catches the court's attention."

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