In 2021, Edie Golikov bought avocado oil from Walmart. For most people, buying groceries like that is an act they do rather frequently with no larger implications. But Golikov became a plaintiff in a class action suit against the big-box retailer, alleging that the store sold "adulterated" avocado oil in violation of false-advertising and consumer laws.
There was just one problem: the suit was based on the assertion that Golikov bought the oil at a brick-and-mortar store. In fact, the plaintiffs' complaint and the first amended complaint said she did. In reality, Golikov bought the avocado oil online. That means she had agreed to Walmart's arbitration agreement and class action waiver — so she couldn't pursue a class action suit in court at all.
It turns out judges don't like that. Instead of treating the failure to disclose the arbitration agreement and the false claim as a sloppy filing, a judge declared it a frivolous litigation position.
In Golikov, Plaintiff’s Complaint alleged that the plaintiff purchased a product from a brick-and-mortar store instead of truthfully disclosing that the purchase was made on the defendant’s website. The Complaint did not reveal that to make a website purchase, Plaintiff was required to enter into a binding arbitration agreement and waive the right to pursue a class action.
The Court did not agree that Plaintiff’s counsel’s efforts to point to subordinates for the “error” amounted to inadvertence, holding “recklessness can be established when a leading attorney fails to check a subordinate’s work and independently verify the facts and law.” Plaintiff’s counsel also argued that the error was inconsequential because Plaintiff made both in-store and online purchases. The Court was not persuaded stating “Plaintiff’s in-store purchases still do not change the fact that the Complaint and the FAC make a claim that Plaintiff purchased a bottle ... on November 14, 2021 from a … store, when she actually did not do so. Accordingly, the action was based on an argument advanced without factual merit.” (emphasis added.)
Moreover, the Court also concluded that Plaintiff’s counsel failed to correct the error and continued to advance their frivolous position in opposition to both a Motion to Compel Arbitration and a Motion to Decertify the Class, unreasonably multiplying proceedings in violation of the duty to “correct or withdraw litigation positions after it becomes obvious that they are meritless.”
Not only was the case thrown out as frivolous, but U.S. District Judge R. Gary Klausner also sanctioned Dovel & Luner partners Christin Cho and Rick Lyon for engaging the class action suit "in bad faith."
According to Law360, that sanction is an eye-watering $623,000, and related to the attorney fees Walmart had to pay to defend against the baseless class action suit.
Now the Alliance for Consumers (AFC) is pointing to this case, and others, as signs that courts are finally willing to punish lawyers who fail to verify basic facts as part of lawsuits. AFC has repeatedly documented that trial lawyers will engage in such questionable practices in order to score large payouts from companies and advance political agendas. In their "Shady Trial Lawyer Pipeline Update," they note that "politicians handing out lucrative public contracts to trial lawyers who give millions of dollars to liberal political campaigns. This is often done under the guise of consumer protection. But, while the Shady Trial Lawyer Pipeline helps politicians funnel public money toward left-wing politics, it leaves everyday consumers and taxpayers with a horrible deal."
Attorneys Cho and Lyon weren't the only ones to face the consequences of their actions. Hagens Berman, another trial law firm, was sanctioned and fined for using AI in court filings related to a suit against OnlyFans. According to Reuters, U.S. District Judge Fred Slaughter sanctioned Hagens Berman and partner Robert Carey $10,000 and imposed a $3,000 fine on co-counsel Celeste Boyd. Judge Slaughter found that the law firm and Carey filed "four briefs that included material 'hallucinated' by AI," in violation of rules that require legal arguments to be "warranted by existing law" and that Boyd "failed to verify the AI-generated material.
In September of last year, the Southern District of New York sanctioned class action lawyer Spencer Sheehan for KLM Airlines after continuing a suit against the airline despite fals allegations in the claim. Judge Ronnie Abrams found Sheehan's actions were sanctionable "under 28 U.S.C. § 1927 and Federal Rule of Civil Procedure 11."
AFC was sounding the alarm bells on the "shady trial lawyer pipeline" back in April, too. Politicians are handing out public contracts to trial lawyers who turn around and contribute millions to Democrat political campaigns, including the Harris-Walz campaign last year, as well as Senator Ruben Gallego (D-AZ) and former Senators Sherrod Brown (D-OH), Bob Casey (D-PA), and John Tester (D-MT), also received contributions.
AFC Executive Director O.H. Skinner released a statement on these developments, saying, "These cases are examples of how woke trial lawyers operate and fund their political agenda. Lawsuits like these should have never gotten off the ground and have nothing to do with what real consumers care about. And yet, these activist trial lawyers push these cases with false claims forward as full‑blown class action lawsuits. It is encouraging to see courts put a stop to these lawsuits and take money out of the pockets of the trial lawyers. It is cases built like this that flood the zone and fuel woke trial lawyers and their political allies as they use the courts as a platform for their broader political and ideological goals, while consumers pay the price. Fortunately, the courts have called out these cases for what they are and dropped the hammer on the woke trial lawyers pushing them."