• Here’s what happened: McClenny Moseley & Associates, the Houston law firm facing disciplinary actions in federal and state court for its deceptive practices in Louisiana hurricane lawsuits, has committed to not using the fees earned from those cases and others.
• Tell me more: The temporary injunction agreement is part of a lawsuit against MMA filed by two litigation funders, who accuse the law firm of defaulting on at least $25 million in litigation funding loans.
  • The firm’s fees were a result of the Louisiana hurricane litigtion, as well as mass torts involving a variety of products, including the Roundup weed killer, heartburn drug Zantac and baby formula.
  • The funders filing says the fees were supposed to be collateral for the loans.
• Remind me: Judges began noticing that many of MMA’s lawsuits were filed against the wrong insurance company, duplicated lawsuits that had been filed by other law firms, or sought damages for claims that had already been settled. MMA paid a marketing firm millions to generate clients, in some cases, representing homeowners without their knowledge
  
• What about Texas? This lawsuit mill is reminiscent of the lucrative scheme storm-chasing lawyers used to exploit natural disasters in Texas before the Texas Legislature passed a common-sense fix in 2017.
• TLR Thoughts: Litigation funding is playing an increasingly visible role in major lawsuits. But this case is an example of what happens when unscrupulous players attempt to take advantage of the system for their own gain.

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