United States District Court, D. Maryland
Richard D. Bennett United States District Judge.
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.) 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 ¶
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.
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
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.
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.)
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. 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
“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.
& 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.
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.)
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. (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. (Id. at 11:20 a.m.)
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.
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
(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. ¶
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 ... ...