By Robin Sidel
A federal judge rejected a proposed $79 million class-action
settlement between American Express Co. and a group of merchants,
citing a recent discovery that two opposing lawyers in the case had
exchanged confidential documents.
In a 44-page decision released Tuesday morning, U.S. District
Judge Nicholas Garaufis also removed from the case Gary Friedman, a
lawyer who had represented some of the merchants. Mr. Friedman had
exchanged documents with rival lawyer Keila Ravelo, who was
representing MasterCard Inc. in a case that involved many of the
same merchants.
The court "concludes that the improper and disappointing conduct
of Co-Lead Class Counsel Gary B. Friedman has fatally tainted the
settlement process," wrote Judge Garaufis.
The judge's ruling was unusual because he had granted
preliminary approval to the pact last year.
An AmEx spokesman couldn't immediately be reached for comment. A
lawyer representing Mr. Friedman couldn't immediately be reached
for comment.
Write to Robin Sidel at robin.sidel@wsj.com
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