SAVANNAH, Ga. (CN) - A law firm persuaded more than 200 plaintiffs it represented in the Vioxx class action to take out high-interest loans from a company run by the firm's lawyers and/or relatives, a former client claims in a RICO class action.
Verie Poole filed the federal complaint against the Eichholz Law Firm and its lending arm, Pacific Legal Funding LLC. Poole estimates the class contains about 200 former clients of the Eichholz Law Firm.
Poole was a claimant in the multidistrict litigation arising from injuries or death from Vioxx (Rofecoxib), a non-steroid anti-inflammatory drug that was withdrawn after concerns arose that it increased the risk of heart attacks and strokes. Merck paid $4.85 billion in settlements to the families of 3,468 people who died after taking the drug, according to press reports in the summer of 2010.
Poole claims that the Eichholz Law Firm, while representing her in the Vioxx lawsuit, persuaded her to take a loan toward her settlement. She says the loan was disbursed by Pacific Legal Funding, a Colorado company owned and operated by members of the Eichholz family.
Poole claims the Eichholzes created Pacific Legal in 2008 "for purposes of providing high-interest loans to clients of Eichholz Law."
The complaint states: "David Eichholz [registered agent for the law firm] obtained the funds necessary to create and operate Pacific Legal by misrepresenting to the bank that he needed a personal line of credit.
"In fact, David Eichholz always intended to provide these funds to his brother, who was uncreditworthy, to operate Pacific Legal."
The complaint states that the Eichholz Law Firm "employed Benjamin S. Eichholz, Esq., as well as his two sons, David Eichholz, Esq., and Daniel Eichholz."
It adds that "Pacific Legal primarily operated out of the offices of Eichholz Law and utilized employees of Eichholz Law."
Poole says Eichholz Law represented about 400 Vioxx claimants, whose claims were consolidated with others in a multidistrict litigation in Louisiana Federal Court.
She says the firm settled the claims of its Vioxx clients.
The complaint states: "In connection with this settlement, Eichholz Law was made aware of the time frame in which Eichholz Law's Vioxx clients' settlement funds would be received.
"Eichholz Law intentionally did not inform its Vioxx clients of this anticipated time frame.
"Eichholz Law affirmatively contacted its Vioxx clients, including plaintiff, and informed them of the ability to obtain a loan from Pacific Legal until their settlement funds arrived.
"At the time such communications occurred, Eichholz Law knew that payment of the settlement funds was a certainty that would occur in the near future.
"During these communications, Eichholz Law stated to plaintiff and the putative class that it had no affiliation with Pacific Legal.
"Such statements were false.
"During these communications, Eichholz Law stated to plaintiff and the putative class that it would receive no money or other benefits from any loans made by Pacific Legal.
"Such statements were false."
"In reliance upon the misrepresentations and omissions from Eichholz Law, plaintiff and the putative class did obtain high interest loans from Pacific Legal.
"Shortly after these loans were provided, plaintiff's and the putative class' Vioxx settlement funds were received by Eichholz Law.
"Eichholz Law caused a portion of these funds to pay all principal, interest, and fees purportedly owed by plaintiff and the putative class to Pacific Legal."
Poole says the scheme amounts to "an ongoing, open-ended pattern of racketeering activity."
"Using this special relationship and the trust arising therefrom, Eichholz Law misrepresented to plaintiff and the putative class that settlement of their Vioxx claims remained uncertain. In reality, these Vioxx claims had been settled and Eichholz Law and Pacific Legal were aware of the date or time frame in which these funds would be received," the complaint states.
It adds: "The high interest rates charged by Pacific Legal on the loans to plaintiff and the putative class were in violation of Georgia's usury and lending laws and regulations."
Poole seeks compensatory and punitive damages for fraud, breach of fiduciary duty, usury and RICO violations.
She is represented by Mark Tate.
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