The New York Court of Appeals today upheld denial of a demand by an "absent class member" for access to class counsel's work product. Wyly v. Milberg Weiss Bershad & Schulman LLP, No. 62 (N.Y. May 7, 2009).
Sam Wyly, who owned almost a million shares of Computer Associates stock, filed suit in New York Supreme Court to get the work product. He said he needed it to help him prove that class counsel in a pair of federal securities cases against CA settled the class claims for too little. The trial court granted Wyly's request, but the Appellate Divison reversed.
The Court of Appeals affirmed. It held that an absent class member doesn't have a traditional attorney-client relationship with class counsel and thus lacks a "presumptive" right to see class counsel's files.
The Court also concluded that the Appellate Division didn't abuse its discretion. It explained:
In this case, the Appellate Division decided that Wyly had not made an adequate showing to compel the law firms to produce their files; in particular, the law firms' work product and analysis relating to the class actions. Wyly sought these documents to support the Wyly movants' Rule 60(b) motion and his malpractice action against the law firms, allegedly for settling the class actions too cheaply. As the Appellate Division observed, however, the District Court long ago granted Wyly access to the 23 boxes that apparently triggered his suspicions in the first place. When Wyly was unable to convince the District Court that anything in the 23 boxes, in fact, suggested fraud, the Judge declined to order further discovery or to reopen the 2003 settlement. The District Court, which supervised the class actions and has retained jurisdiction, is responsible for protecting the interests of absent class members, which includes monitoring the adequacy of class counsel's performance. We cannot say that the Appellate Division abused its discretion by, in effect, declining to second-guess the District Court's judgments.
Id., slip op. at 18.