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On The Case

Judge in $36 million Prevagen class action bars ‘rude, threatening, and problematic’ objector

(Reuters) - It was only last week that Steven Helfand, a disbarred lawyer who frequently objects to class action settlements, was featured as a champion of public access in my stories about a troubling document in a class action against Walmart.

Walmart and class counsel from Morgan & Morgan wanted to seal a declaration in which the lead plaintiff renounced the proposed $9.5 million settlement. (The plaintiff has since rescinded the declaration.) Helfand pushed for U.S. District Judge Jose Martinez of Miami to unseal the declaration. And though Judge Martinez criticized Helfand’s tactics, he did end up deciding that the controversial declaration must be a part of the public record.

This week has gone less well for Helfand, to put it mildly. On Monday, U.S. Magistrate Judge Jonathan Goodman of Miami struck Helfand’s objection to a proposed $36 million settlement to resolve nationwide class action claims that the memory supplement Prevagen is falsely advertised. Judge Goodman reviewed the transcript of Helfand’s Nov. 5 deposition by class counsel Jack Scarola of Searcy, Denney, Scarola, Barnhart & Shipley. The deposition failed to establish that Helfand even bought Prevagen, or, if he had, that he could claim to have been deceived by ads for the product since Helfand testified that he could “vouch for” it. Helfand, the judge said, claimed not to understand straightforward questions about his employment history, living arrangements and disbarment earlier this year by the California state bar. He said he didn’t know what a W-2 tax form was, Judge Goodman said. He claimed not to know the definition of “income.”

Judge Goodman’s conclusion: “Helfand demonstrated that he is one of the most uncooperative, evasive, vague, confrontational, difficult, inconsistent, rude, threatening, and problematic deponents I have ever encountered in more than 37 years of practicing law.” (The magistrate was authorized by U.S. District Judge Marcia Cooke to oversee the Prevagen case.)

Helfand responded to Monday’s order from Judge Goodman with a flurry of phone calls and emails, some of which have been entered in the case docket. “Your conduct is highly inappropriate, and I want you to know this,” he said in one email to the judge. In another, Helfand vowed, “If I have a valid objection; I shall tender it, without your unlawful threats of contempt, without having heard from me. Your attempt to vitiate due process is an outrage; and I take exception to it.”

Judge Goodman’s response, via an order in the docket: “Mr. Helfand may not speak at the hearing at all. Period. End of discussion.”

The judge granted final approval to the settlement on Thursday.

Helfand told me by email that he decided not even to appear at Wednesday’s Zoom hearing because he wasn’t sure if he would be held in contempt for just showing up. Helfand said Judge Goodman had denied him due process by refusing to allow him an opportunity to respond to class counsel’s motion to strike his objection. Class counsel, Helfand said, had asked him “improper and harassing” questions in his deposition, including questions about his physical and mental health. The transcript, he said, shows him attempting to cooperate. On Wednesday, Helfand moved to unseal an unredacted transcript of the deposition, which would make public the questions he was asked about his health, because he said the full transcript will show he was not evasive.

“Judge Goodman’s commentary was unfounded and wrong,” Helfand said in an email. “Judge Goodman has done a disservice to the class; and has forced me to appeal his decision, potentially tying up this settlement and final judgment.”

Helfand also said in an email that the judge was wrong about his use of Prevagen, which Helfand said he took to offset the side effects of prescribed medication. He said he stopped taking the supplement more than a year ago so no longer has packaging for it. “And even if I were not aggrieved, why refuse (me) the opportunity to speak?” he said. “The procedural irregularities by Judge Goodman are glaring.”

Class counsel Adam Moskowitz of The Moskowitz Firm, meanwhile, said he’s trying to make sure that Helfand can’t keep filing objections. Moskowitz’s motion to strike Helfand’s objection in the Prevagen case alleged that Helfand has a long history of falsely claiming to have bought products at issue in consumer class actions, only to fall short when he’s asked to provide proof. His whole purpose, the brief said, is to file baseless objections and then appeal rulings against him, delaying recovery for class members until class counsel either defeat him in the appellate court or pay Helfand to drop his appeal. (As you know, recent amendments to Rule 23 were intended to curb such payments to objectors.)

“I want to put Steve Helfand out of business,” said Moskowitz, who called Helfand’s deposition testimony “illogical and concerning.” Moskowitz said he’s hoping that Judge Goodman’s order is filed in every case in which Helfand objects to a proposed settlement.

Defense counsel for Quincy Bioscience, the company that sells Prevagen, did not respond to my email request for comment on the Helfand objection or the underlying case. Quincy’s lawyers from Kelley Drye & Warren argued in a summary judgment motion last May (2020 WL 6688452) that the allegedly deceptive marketing statements were, in fact, backed by “a double-blinded, placebo controlled, randomized clinical trial.”

No class member other than Helfand objected to the deal, which includes a $36 million cash fund for class members and attorneys’ fees and costs of $4.2 million. A non-profit group called Truth in Advertising filed an amicus brief opposing the settlement, arguing that it provided inadequate notice to 3 million class members and will not end Quincy’s allegedly deceptive marketing, but the group did not make an appearance at the final approval hearing, Moskowitz said.

Quincy has faced years of litigation over its Prevagen marketing, including consumer class actions in California, New York, New Jersey, Texas and Missouri. The company is also defending a Prevagen marketing enforcement action by the Federal Trade Commission and the New York Attorney General in Manhattan federal court.

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