By Mike Scarcella

May 30 (Reuters) - Leading companies and banks involved in the administration of class action settlements have been engaged in a years-long kickback scheme that eroded payouts to class members in thousands of cases, a pair of new lawsuits alleged on Thursday.

The lawsuits filed in federal courts in New York and Florida accused class action service providers Epiq Solutions, Angeion Group and JND Legal Administration of taking illegal payments from Huntington National Bank and Western Alliance Bank in order to maintain dominance in the settlement administration market.

The class members who filed the lawsuits said the administrators for years have diverted settlement deposits to the two banks, and in exchange received a cut of profits from them.

The lawsuits said the alleged scheme reduced competition in the class action administration industry and illegally fixed prices in violation of U.S. antitrust law.

JND in a statement said, "the allegations in these complaints regarding JND are baseless and JND will defend itself vigorously in court."

Huntington declined to comment. Epiq, Angeion and Western did not not immediately respond to requests for comment.

Prominent litigator David Boies of law firm Boies Schiller Flexner, who represents the plaintiffs, did not immediately respond to a similar request.

Court-appointed class action administrators oversee all facets of settlement administration, including notifying class members. They work with banks, which are also appointed, to hold funds and distribute them to class members once a settlement is approved.

Huntington and Western, the lawsuits said, oversee more than 80% of the settlement funds in class and mass actions in the United States. Epiq, Angeion and JND oversee more than 65% of the market for class action administration services, according to the complaint.

The lawsuits said the rise of interest rates in 2021 spurred the alleged scheme. Settlement administrators threatened to refrain from using the banks if they did not agree to share profits, the lawsuits alleged.

The interest rates Huntington and Western provided on settlement deposits should have been higher in a competitive market, the lawsuits said.

The lawsuits claimed the settlement administrators have reaped hundreds of millions of dollars in undisclosed kickbacks and compensation from the bank defendants.

The cases are Mary Jane Whalen v. Epiq Systems Inc et al, U.S. District Court, Southern District of New York, No. 1:25-cv-04499, and Roger Tejon v. Epiq Systems et al, U.S. District Court, Southern District of Florida, No. 1:25-cv-22453.

For plaintiffs: David Boies, Mark Mao, James Lee and Alison Anderson of Boies Schiller Flexner

For defendants: No appearances yet

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(Reporting by Mike Scarcella)

((Mike.Scarcella@thomsonreuters.com;))