Partial Settlement Reached in Ignite/Stream Class Action

After Nine Years of Litigation, A Settlement

On June 30, 2009, Scott Clearman, The Clearman Law Firm, PLLC, on behalf of his clients, filed a detailed class action complaint against retail energy provider Stream, Stream’s marketing arm, Ignite, and their officers and top salespersons, alleging that they operated a pyramid scheme in violation of the federal Racketeer Influenced and Corrupt Organizations Act (“Ignite Action”). After over nine years, the case has settled.


United States District Judge Hoyt, Southern District of Texas, initially dismissed the Ignite Action due to an arbitration agreement between the plaintiffs and Ignite. Clearman appealed Judge Hoyt’s dismissal. The United States Court of Appeals for the Fifth Circuit reversed Judge Hoyt’s decision and found that Ignite’s agreement to arbitrate was illusory and unenforceable under Texas law.

The Ignite Action involved many depositions, many motions and the production and review of hundreds of thousands of documents. After evidence was presented, Judge Hoyt certified the Ignite Action as a class action but effectively excluded Georgians from the certified class. The defendants then appealed Judge Hoyt’s certification decision with the United States Court of Appeals for the Fifth Circuit. In a rare decision entertained by all judges of the United States Court of Appeals for the Fifth Circuit, the court affirmed Judge Hoyt’s decision to certify the class.

Following the final appeal of Judge Hoyt’s certification decision, the skirmish between the defendants and the class continued.

A Partial Settlement:

Eventually, driven by the certification, other decisions by Judge Hoyt in the Ignite Action and the thoughtful efforts of all parties, and helped by an impartial fellow litigator, Murray Fogler, the parties agreed upon a settlement. However, to Clearman’s disappointment, the class settlement excluded Georgians.

Clearman’s Fight to Include Georgians:

To protect the rights of any Georgians affected by the acts of the defendants, Clearman initially sued in Georgia. The Eleventh Circuit, however, ended that suit. Clearman filed another case in Texas to specifically include all persons excluded from the Ignite Action class by Judge Hoyt’s certification decision.

Clearman’s co-counsel and the attorneys that they had hired opposed Clearman’s efforts to represent the Georgians in any action against the defendants. They even went as far as seeking to remove him, the attorney that filed the initial Ignite Action, from his role as a class counsel. Given the terms of the initial settlement, and left with no other options, Clearman asked Judge Hoyt to order notice to the Georgians of their exclusion from the class in the Ignite Action so that the Georgians would know that the Ignite Action settlement was not protecting their rights. Clearman’s co-counsel again opposed his efforts.

Ultimately, the defendants agreed to include the Georgians in the settlement of the Ignite Action. Clearman got the Georgians the same rights under the Ignite Action settlement as any non-Georgian.
Motion To Approve Notice To Georgians Of This Court’s Denial Of Class Certification

Where To Learn More About the Settlement:

For more specific details about the Ignite Action settlement, please go to www.IgniteAssociatesSettlement.com.

Still, for Some, Litigation Against Stream/Ignite Continues:

If you were not included in the Ignite Action settlement because you joined Ignite after April 2, 2011, you may be interested in following the oral argument in the Griggs case.

Final Words of Thanks Offered on Behalf of the Class:

Clearman wants to recognize these attorneys who have provided him assistance in this case:

  • the referral attorney, Jeffery Burnett, www.burnetthoustonlaw.com, a non-litigator who presented Clearman with the facts and introduced him to the plaintiffs in 2009;
  • my good friend and former associate, Brian D. Walsh, www.bdwalshlaw.com, who helped Clearman review and file the original complaint. Brian also helped prosecute the first appeal before the Fifth Circuit;
  • a workhorse, Andrew Kochanowski, Sommers Schwartz P.C., www.sommerspc.com, who helped Clearman take depositions and, then, gathered experts and prepared and presented the certification motion;
  • an appellate attorney responsible for certain of the appeals, Eric Citron, Goldstein & Russell, P.C., www.goldsteinrussell.com, who defended the class certification decision; and
  • a local counsel, Matthew Prebeg, Prebeg, Faucett & Abbott, PLLC, an attorney who did a yeoman’s job as local counsel by introducing Mr. Kochanowski to the district court.

All class members and Clearman thank Murray Fogler, www.fbfog.com, a litigation attorney who took time from his usual work to serve us as a mediator.

Finally, Clearman wishes to thank the professionalism shown by opposing counsel, attorneys who fought with full vigor, Robert C. Walters, Brett S. Rosenthal and Andrew LeGrand, www.gibsondunn.com. Clearman knows that they will continue their faithful representation of the defendants in the Griggs Action.