Texas Law Firm to Pay $3.4 million – Settling Class Action Matter Alleging Unauthorized Practice of Law in California

On January 8, 2016 a Federal Judge in California approved a settlement in the matter of 4EC Holdings v. Linebarger Goggan Blair & Sampson (Case No 3-14-cv-01944, N.D. California) whereby the defendant law firm will pay $3.4 million dollars to resolve claims made in a class action proceeding that the firm violated the California Unfair Competition Law by engaging in the illegal practice of law in California by sending letters into California attempting to collect debts owed to various California governmental agencies.  The complaint also alleged that the letters were misleading, constituted false advertising and/or otherwise constituted unfair business practices.

The Texas based law firm of Linebarger Goggan Blair & Sampson (Linebarger) is highly regarded as one of the larger collection law firms in the United States, with a significant specialty practice in collection of government debt. This may include almost any sort of debt owing to a government entity, from unpaid taxes, tolls or fines to fees for services rendered (for example, court costs or fees for services at a public hospital).

The case began in May, 2013 and has been vigorously litigated (there were over 100 separate documents filed with the court). Per the amended complaint, Linebarger had no lawyers in California until September 2013, and that lawyer wasn’t properly supervised. Linebarger had denied the allegations in the complaint.

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