Excessive Tax Collection Fee Class Action

Youngblood v. Linebarger, Goggan, Blair & Sampson, LLP, Case No. 10-cv-2304 SHM-tmp (W.D. Tenn. 2010)

Linebarger, Goggan, Blair & Sampson, LLP is a national law firm that specializes in the collection of delinquent property taxes and other debts owed to governmental entities.  In 2004, Linebarger took over the collection of delinquent real property taxes for the City of Memphis. In doing so, Linebarger included a 10% attorney fee to be collected from delinquent tax payers which the plaintiff alleged was not authorized by Tennessee law. See, First Amended Complaint.

As is usual in class actions, the Defendant took every conceivable step to derail the case. First, Linebarger moved to dismiss the case. Among other things, Linebager argued that it was immune from suit under the Tax Injunction Act, that plaintiff add failed to add indispensable parties to the suit, that the court had no jurisdiction under the Class Action Fairness Act and that the class claims were not properly pled. It even sought to deny plaintiff’s request to substitute a real party in interest.  The district court denied each of these arguments. Wright v. Linebarger, Goggan, Blair & Sampson, LLP, 782 F. Supp. 2d 593 (W.D. Tenn. 2011)(order denying Defendant’s motion to dismiss under the Tax Injunction Act). (11)

Next, Linebarger sought to appeal the denial of its motion to dismiss to the Sixth Circuit Court of Appeals. The district court denied this request as well. Wright v. Linebarger, Goggan, Blair & Sampson, LLP, Case No. 10-cv-2304 SHM-tmp, 2012 U.S. Dist. LEXIS 40948 (W.D. Tenn. Mar. 26, 2012)(order denying motion for interlocutory appeal of order denying motion to dismiss under 28 U.S.C. § 1292(b)).

After class discovery was completed – which showed that Linebager had collected millions of dollars in fees from delinquent taxpayers – we were able to obtain class certification for our clients. Youngblood v. Linebarger, Goggan, Blair & Sampson, LLP, Case No. 10-cv-2304 SHM-tmp, 2012 U.S. Dist. LEXIS 142792 (W.D. Tenn. Sept. 30, 2012)(order granting class certification under Rule 23(b)(3)). (13) Undaunted, Linebarger sought permission to appeal the district court’s certification decision to the Sixth Circuit Court of Appeals, which was promptly denied. In re Linebarger Goggan Blair & Sampson, LLP, No. 12-0511 (6th Cir. Nov. 27, 2012).

Thereafter,Watson Burns engaged in extensive merits discovery of Linebarger; given the class’ allegations that Linebarger knew its fees were not authorized by law, we were able to obtain documents that would otherwise be prevented from disclosure under the attorney-client privilege. With these documents in hand, we were able to negotiate a $7.4 million recovery for the class. 

For more information concerning this case, please go to the settlement website www.memphisattorneyfeeclasssettlement.com