In a recent U.S. District Court, an emergency injunction was issued in a CVS Class Action lawsuit against two Proposed class-action lawsuit funding entities for improperly collecting fees from eligible Class Members. On June 4, the court found that the Proposed defendants had engaged in unlawful conduct by pursuing the lawsuit without providing sufficient evidence to demonstrate that they were either legally justified or eligible for the lawsuit. The Proposed defendants had previously sued the Plaintiffs in the past for failure to repay litigation funding and this case was no different. Further, the court noted that these claims were not even legally plausible on the facts of this case. Accordingly, the court issued an injunction to prevent the Proposed defendants from attempting to recover these monies from Class Members.

These claims are part of a Proposed Class Action lawsuit (ECF), which is part of an ongoing dispute between plaintiffs’ counsel and Proposed class-action lawsuit funding entities. According to the Proposed lawsuit funding entities, these claims are without merit and reflect a lack of due diligence on their part. Plaintiffs argue that such arguments are irrelevant to whether or not such allegations are legally valid. The Proposed defendants counter that plaintiffs’ counsel has provided a “mixed bag of false and frivolous comments.” Thus, these comments of both parties are relevant to the merits of this case.

CVs of Class Action Lawsuit

One of the complaints underlying this lawsuit involves billing and collection practices. The Proposed class action lawsuit funding entity maintained that it was not responsible for the billing because it only collected a percentage of the “unlimited” fee which was allocated to the Proposed Class and thus was not liable for the “billing and collection.” Plaintiffs filed a demurrer and obtained an injunction. On appeal, the Eleventh Circuit Court of Appeals affirmed the demurrer and vacated the preliminary injunction.

The Eleventh Circuit Court of Appeals also found that plaintiffs’ counsel had not provided a proper Class Certification to support the class action lawsuit. The Proposed Class Action lawsuit funding entity maintained that plaintiffs had not provided a sufficient showing of a relationship between the Proposed class and a causal connection between the Proposed and post-ulated causes of action. Plaintiffs argue that the trial court should have allowed them to present this evidence at trial as a matter of court instruction. However, the Eleventh Circuit Court of Appeals found that plaintiffs failed to make a reasonable showing of a causal relationship between the Proposed Settlement Deal and post-ulated causes of action.

In addition to this issue of causation, there was another contention between the Proposed Settlement Process Parties and the U.S. district court, namely, that the class action lawsuit was improper because it was not initiated by a properly formed class. The Proposed Settlement Process Parties argue that plaintiffs improperly brought this lawsuit as an unincorporated third party, which was not allowed by the FDA as an exception to the general rule that only third parties may institute class actions. Plaintiffs argue that this FDA rule is designed to prevent corporations from directly participating in class actions. Additionally, they contend that the FDA itself indicated that the ruling did not apply retroactively and was intended to allow class actions to continue after the waiver is terminated. However, the FDA indicated that, in the case of its decision, there is nothing preventing a corporation from instituting a class-action lawsuit in connection with a product liability claim.

On a final note, one major difference between the CVs of plaintiffs’ and defendants’ Proposed Class Action lawsuit funding entities is that the CVs of plaintiffs’ are often certified by Certified Public Accountants or attorneys. Plaintiffs’ attorneys are typically former trial lawyers. They are usually well-versed in contract, foreclosure laws, and the underlying facts of their case. Conversely, the Proposed Settlement Processes Parties’ attorneys are usually former mortgage brokers. Often, the Proposed Settlement Process Parties have little to no experience in litigating consumer lawsuits. This is likely one reason that they are typically paid by the Proposed Settlement Process Parties in the Class Action lawsuit funding arrangements.

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