Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Joseph Saveri Law Firm Inc. v. Michael E. Criden, P.A.

United States District Court, D. Maryland

September 7, 2017

JOSEPH SAVERI LAW FIRM, INC., et al., Plaintiffs,
v.
MICHAEL E. CRIDEN, P.A., d/b/a CRIDEN & LOVE, PA, Defendant.

          MEMORANDUM OPINION

          Richard D. Bennett United States District Judge.

         This case involves a dispute over a purported referral fee agreement arising out of the Titanium Dioxide Antitrust Litigation before this Court from 2010 to 2014. In re Titanium Dioxide Antitrust Litigation, RDB-10-318 (D. Md.) (“TiO2 litigation”). Plaintiffs Joseph Saveri and the Joseph Saveri Law Firm, Inc. (collectively, “plaintiffs” or “the Saveri plaintiffs”) served as Co-Lead Class Counsel in the TiO2 litigation and, following the $163.5 million settlement reached in that case, were awarded over $10 million in attorney's fees and costs. (RDB-10-318, ECF No. 546.)[1] Defendant Michael E. Criden, P.A. d/b/a Criden & Love, PA (“defendant” or “Criden & Love”) also participated in the TiO2 litigation and was awarded over $1 million in attorney's fees and costs. (Id.) Criden & Love has collected an additional $1.7 million in referral fees paid by the law firms of Lieff, Cabraser, Heimann, and Bernstein, LLP (“Lieff Cabraser”) and Berger & Montague, PC, two other firms which served as Co-Lead Class Counsel in the TiO2 litigation. (ECF No. 14 at ¶ 25.)

         The instant dispute arises out of Criden & Love's assertion that it is entitled to another 12.5% (twelve and one-half percent) referral fee from the Saveri plaintiffs based on Criden & Love's referral of plaintiff Isaac Industries, Inc. to Lieff Cabraser, Mr. Saveri's former law firm. In response to Criden & Love's demand, which included the filing of a since-abandoned arbitration proceeding in Florida, the Saveri plaintiffs have filed this action seeking a declaratory judgment that they are not obligated to pay to Criden & Love any referral fee.

         Plaintiffs filed their complaint for declaratory relief in this Court following the dismissal of a nearly identical action in the United States District Court for the Northern District of California. Joseph Saveri Law Firm, Inc. v. Michael E. Criden, P.A., No. 14-CV-01740-EDL, 2015 WL 1029364 (N.D. Cal. Mar. 9, 2015) (hereinafter, “N.D. Cal. Op.”). While the district court there ruled in favor of the Saveri plaintiffs' on all claims and counterclaims, the judgment was reversed on appeal by the United States Court of Appeals for the Ninth Circuit based on the district court's lack of personal jurisdiction over defendant Criden & Love. Joseph Saveri Law Firm, Inc. v. Criden, No. 15-15534, --- Fed. App'x ---, 2017 WL 2406736 (9th Cir. June 2, 2017). The Ninth Circuit did not address the district court's ruling on the merits of the case.

         Now pending before this Court is the Saveri plaintiffs' Motion for Summary Judgment (“Plaintiffs' Motion”). (ECF No. 13.) This Court conducted a hearing on Plaintiffs' Motion on August 31, 2017. (ECF No. 31.) For the reasons stated below, Plaintiffs' Motion (ECF No. 13) is GRANTED, and Declaratory Judgment shall be ENTERED in favor of plaintiffs Joseph Saveri and the Joseph Saveri Law Firm, Inc. on all claims and counterclaims. The Saveri plaintiffs are not obligated to pay any referral fee to Criden & Love.

         PROCEDURAL BACKGROUND

         In February 2014, Criden & Love initiated arbitration proceedings before the American Arbitration Association (AAA) against plaintiffs seeking over $1.2 in referral fees allegedly owed as a result of the TiO2 litigation. (ECF No. 1 at ¶ 27.) Plaintiffs objected to the AAA's jurisdiction, asserting that they are neither parties to nor the intended beneficiaries of the purported arbitration agreement. (Id. at ¶ 28.)

         On April 15, 2014, plaintiffs filed a complaint in the United States District Court for the Northern District of California seeking to enjoin the arbitral proceedings and a declaratory judgment that they are not subject to an arbitration agreement with Criden & Love and that they are not liable to Criden & Love for the purported referral fee agreement. (ECF No. 1 at ¶ 31.) The district court there denied Criden & Love's motion to dismiss on jurisdictional grounds, and the motion for preliminary injunction became moot after the arbitration was dismissed in July 2014. (Id. at ¶ 32.) Following discovery, plaintiffs moved for summary judgment on their declaratory judgment claims. By Memorandum Opinion and Order dated March 9, 2015, Magistrate Judge Elizabeth Laporte granted plaintiffs' Motion on their own claims and on Criden & Love's counterclaims.[2] N.D. Cal. Op., 2015 WL 1029364. Although the court there doubted even the existence of an enforceable referral fee agreement between the Saveri plaintiffs and Criden & Love, the court's decision was based on the fact that the purported agreement violated the Rules of Professional Conduct of the California and Florida bars, as well as the Local Rules of the Northern District of California, all of which require that a client provide written consent to any fee sharing agreement. Id. In reaching this conclusion, Judge Laporte noted that:

Isaac Industries was Lieff Cabraser's client. While Defendant argues that Plaintiffs continued to officially represent Isaac Industries after June 1, 2012, it is undisputed that after that time, Plaintiffs “never appeared specifically on behalf of Isaac Industries and Plaintiff Saveri Law Firm never entered into a fee agreement with Isaac Industries.” (Saveri Decl. ¶¶ 1011.) For the settlement, Defendant “Criden and Lieff Cabraser (not [Plaintiff Saveri] or personnel at [Plaintiff] Joseph Saveri Law Firm) conferred with Isaac Industries to advise [it] regarding the proposed settlement ... and Vincent Esades of Heins-with [Plaintiff Saveri's] input-advised [their] client Breen on the same subject.”

N.D. Cal Op., 2015 WL 1029364, at *6 (emphasis added). Because Saveri's client, East Coast Colorants, LLC d/b/a Breen Color Concentrates (“Breen”), did not give written consent to the purported referral fee agreement, it would be unenforceable as a matter of public policy even if Criden & Love were otherwise able to prove its entitlement thereto. Thus, the Court granted summary judgment in favor of Saveri and his firm.

         Criden & Love appealed the district court's judgment. On June 2, 2017, the Ninth Circuit reversed and remanded Judge Laporte's order denying Criden & Love's Motion to Dismiss, concluding that the district court did not have personal jurisdiction over Criden & Love. Joseph Saveri Law Firm, Inc. v. Criden, No. 15-15534, ___ Fed. App'x ___, 2017 WL 2406736 (9th Cir. June 2, 2017). The Ninth Circuit did not discuss Judge Laporte's ruling on the merits of the case. Pursuant to the Ninth Circuit's judgment, the district court subsequently dismissed the case.

         On June 12, 2017, plaintiffs filed their Complaint in this Court. (ECF No. 1.) The relief sought is essential the same as that requested in the Northern District of California, and the parties' papers rely extensively on discovery undertaken during that litigation. On July 19, 2017, Criden & Love answered and asserted a series of Counterclaims. (ECF No. 14.) Plaintiffs answered the Counterclaims on August 9, 2017. (ECF No. 24.)

         On July 14, 2017, plaintiffs filed the now-pending Motion for Summary Judgment (ECF No. 13), and the matter became fully ripe for this Court's resolution on August 25, 2017. At a Motions Hearing conducted on August 31, 2017, the parties agreed that this Court is the proper forum for resolution of this dispute.[3] (ECF No. 31, Aug. 31 Hrg. 11:20 a.m.) ECF No. 31.) It was also agreed that the facts of this case were developed fully in the Northern District of California case and that no additional discovery is required. (Id. at 11:19 a.m.) Finally, the parties agreed that by virtue of their pro hac vice appearances before this Court in the underlying TiO2 litigation, they agreed to be bound by the rules of this Court, including, the Maryland Rules of Professional Conduct.[4] (Id. at 11:20 a.m.)

         FACTUAL BACKGROUND

         The pertinent factual background is set forth in the March 9, 2015 Memorandum Opinion of Magistrate Judge Elizabeth Laporte of the United States District Court for the Northern District of California. N.D. Cal. Op., 2015 WL 1029364 (N.D. Cal. Mar. 9, 2015).[5]

Plaintiff Joseph Saveri (“Plaintiff Saveri”) is a former partner at Lieff Cabraser Heimann & Bernstein, LLP (“Lieff Cabraser”). (Saveri Decl. ¶ 1.) In June 2012, Plaintiff Saveri left Lieff Cabraser and founded Plaintiff Joseph Saveri Law Firm, Inc. (“Plaintiff Saveri Law Firm”). (Id.¶ 9.)
In February 2010, while Plaintiff Saveri was still a partner at Lieff Cabraser, that firm entered into a referral agreement with Defendant and Counterclaimant Michael E. Criden, P.A. d/b/a Criden & Love, P.A. (“Defendant Criden” or “Defendant”), a Florida law firm. Through that agreement, Defendant Criden referred a client, Isaac Industries, Inc. (“Isaac Industries”), to Lieff Crabraser so that it could represent Isaac Industries in In re Titanium [Dioxide] Antitrust Litigation, No. 10-cv-318 (D. Md.) (“TiO2 litigation”). In exchange, Lieff Cabraser agreed to pay Defendant a referral fee of 12.5 percent of any fees it received in the TiO2 litigation. (Love Decl. Ex. B.; Saveri Decl. ¶ 3.) The agreement states that:
[Lieff Cabraser] agrees to pay [Defendant] a referral fee of 12.5% (Twelve and One Half Percent) of its fees, including any multiples on hours that it receives in this matter (“Total Fees”). Total fees does not include any monies received for reimbursement of expenses. Lieff Cabraser agrees to pay the referral fee to [Defendant] even if Lieff Cabraser later procures another client in this matter. If Lieff Cabraser receives significantly less than its lodestar in the case, [Defendant] agrees to discuss in good faith a reasonable accommodation to the amount of the referral fee.
Both law firms agree that all disputes related to or arising from this referral agreement shall be resolved by arbitration conducted by the American Arbitration Association (“AAA”).
(Love Decl. Ex. B.) Although Mr. Fastiff of Lieff Cabraser communicated acceptance of the agreement to Defendant Criden on behalf of the firm, Plaintiff Saveri was aware of the arrangement. (Love Decl. Ex. G.)
On February 12, 2010, Isaac Industries filed a complaint alleging a conspiracy to fix prices of titanium dioxide in the United States District Court for the District of Maryland. (Love Decl. ¶ 10.) That case was subsequently consolidated with a similar case, brought by Haley Paint Company, into the TiO2 litigation. (Saveri Decl. ¶ 7.) Plaintiff Saveri was admitted pro hac vice in the TiO2 litigation on behalf of Haley Paint Company and Isaac Industries. (See Saveri Decl. ¶ 7, Ex. 4.) On April 1, 2011, Lieff Cabraser and Gold Bennett Cera & Sidener, LLP (“Gold Bennett”) were appointed as co-lead counsel. (Love Decl. ¶ 12.) On July 29, 2011, the TiO2 court granted a stipulation adding East Coast Colorants LLC d/b/a Breen Color Concentrates (“Breen”) as a plaintiff. (Saveri Decl. ¶ 9.)
In May 2012, Plaintiff Saveri informed Mr. Love of Defendant Criden that he would be leaving Lieff Cabraser. (Love Decl. ¶¶ 14-15.) According to Mr. Love:
[Plaintiff Saveri] said that he would want to enter appearances on behalf of, you know, clients that I'd given Lieff [Cabraser], and I said sure. And I said, you know, that we would expect you to respect the referral obligation that Lieff [Cabraser] had agreed to.... [Plaintiff Saveri] didn't say yes ... ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.