The order comes in a proposed class action brought by Richard L. Mehlberg and Angela R. Deibel against Compass Group USA, Inc., the multinational foodservice company. While the specific claims against Compass Group are not detailed in the court's order, the case appears to involve employee benefit plan issues, as the plaintiffs are suing both individually and 'on behalf of the Plan.'
Judge Bough emphasized the need for transparency in complex litigation, writing that 'the unique nature of multidistrict litigation and class actions warrant transparency, the highest regard for professional conduct, and confidence in leadership and class counsel.' The judge cited concerns about whether outside interests could compromise attorneys' ability to adequately represent the class, noting that such interests could have 'undue influence or control over the underlying litigation.'
The court's most pointed language focused on attorneys' fiduciary duties to class members. 'It is leadership and class counsel's responsibility to oversee and manage certain vendors, including but not limited to banks, claims and settlement administrators and ensure that both counsel and claimants are credited with interest at the maximum available rate,' Judge Bough wrote, adding that costs must be 'for work actually performed and done so at commercially reasonable rates.'
The 11-question disclosure requirement covers a broad range of potential conflicts, from litigation financing arrangements to personal relationships with parties or vendors. Attorneys must disclose any financial relationships with litigation funders, settlement administrators, banks, or other entities involved in the case. They must also reveal any gifts exceeding $250 from potential service providers and any personal relationships with parties, counsel, or vendors.
The order places particular scrutiny on litigation financing arrangements, requiring attorneys to explain whether funders have any control over litigation strategy or settlement decisions. Judge Bough specifically asked whether such financing 'create[s] any conflict of interest for counsel' or 'undermine[s] counsel's obligation of vigorous advocacy.' Attorneys with such arrangements must submit financing documentation to the court or a special master.
The disclosure requirements extend beyond direct financial relationships to cover indirect ties through law firm partners, employees, and co-counsel. Attorneys must also reveal whether they represent any parties in other matters and whether they have financial interests in similar lawsuits. The court emphasized that lawyers have 'a continuing obligation to supplement these responses' as circumstances change.
Judge Bough's order reflects growing judicial concern about potential conflicts in class action litigation, particularly involving third-party litigation funding and vendor relationships. Courts have increasingly required such disclosures as the litigation finance industry has expanded and questions have arisen about whether outside funding affects lawyers' independence and loyalty to class members.
The case is still in its early stages, with attorneys likely to submit their leadership applications and conflict disclosures in the coming weeks. The court's detailed scrutiny of potential conflicts suggests Judge Bough intends to closely monitor the selection of leadership counsel to ensure adequate representation of the class.