The judge reserved the right to issue sanctions if deemed necessary after further investigation
US Magistrate Judge Joseph Marutollo decided not to impose immediate sanctions on the plaintiffs' law firm Milberg Coleman Bryson Phillips Grossman in connection with fake claims submitted as part of a US$ 5.6 billion antitrust settlement involving Visa and Mastercard.
Reuters reported that the judge's decision came after the firm agreed to pay US$ 25,000 to cover the additional work required by the claims administrator due to the false submissions.
Judge Marutollo emphasized the importance of maintaining the integrity of the claims process, stating, "The integrity of the claims process in this matter remains essential. Indeed, throughout this litigation, efforts have been made to proactively protect class members from deception."
The settlement agreed upon in 2018, aimed to resolve claims from over 12 million merchants who alleged they had overpaid credit and debit card fees. Visa and Mastercard, however, denied any wrongdoing.
Milberg, which was not involved in crafting the settlement but was seeking a portion of the fund for a group of class members, found itself in hot water after submitting dozens of "proofs of authorization" that were later found to be fraudulent. According to attorneys representing the class, some submissions purportedly came from well-known multinational companies, yet even a cursory review revealed them to be false.
In their defense, Milberg argued that they had not acted in bad faith and requested the court refrain from imposing sanctions. The firm admitted that it "could have done a better job of screening the would-be clients’ information—and will do so in the future."
Class attorneys from Robbins Geller Rudman & Dowd and Robins Kaplan had urged the Brooklyn court to consider sanctions against Milberg. According to court records, they highlighted that Milberg had submitted more than 115 fake client papers to claims administrator Epiq.
Milberg attributed the fraudulent submissions to a third-party referral source and expressed its willingness to cooperate with any US Justice Department investigation. The firm also noted in a recent filing that other parties had submitted fraudulent material in the case, although it did not provide specific details.
Judge Marutollo stated he "reserves the right to issue sanctions should it be deemed necessary following further investigation." This leaves the door open for potential future penalties depending on the outcome of ongoing inquiries.
