Attorneys battle over fees in decertified class action against tobacco companies

By Jessica Karmasek | Sep 29, 2015

JACKSONVILLE, Fla. (Legal Newsline) - A federal judge has agreed to defer briefing in a dispute over attorneys’ fees from a now-decertified class action brought by injured smokers against tobacco companies.

Judge Brian J. Davis, in a Sept. 24 order, granted a motion by co-defendants The Wilner Firm PA and Farah & Farah PA, both Jacksonville-area law firms, to defer briefing of state court motions until after determination of jurisdiction and motion to remand.

Davis, a judge on the U.S. District Court for the Middle District of Florida, Jacksonville Division, said briefing also will be deferred “until further order of the court” on co-defendant Lieff Cabraser Heimann & Bernstein LLP’s motion to dismiss the plaintiffs’ complaint and motions filed by Wilner and Farah to compel arbitration and stay the proceedings.

The plaintiffs in the case, Tallahassee law firm Howard & Associates Attorneys-at-Law PA, Phillip Timothy Howard and Richard A. Daynard, who is described as a member of the New York State Bar, originally filed their lawsuit against the defendants in June in Duval County Circuit Court, Florida.

Earlier this month, Lieff filed a removal notice with the federal court. The New York law firm argues it “never contracted or worked” with Howard or Daynard and that the plaintiffs’ claims arise from a dispute between them and Wilner and Farah.

“In their lawsuit, Daynard/Howard seek to receive a portion of attorneys’ fees that will arise from the settlement of 415 cases that are a part of the so-called global settlement of the Engle Progeny Cases pending in this court,” Lieff wrote in its Sept. 11 removal notice. “Daynard/Howard make this claim despite not having done any work in the federal Engle Progeny Cases that are a part of the global settlement and despite not having any fee agreements with any plaintiff whose case is being settled as a result of the global settlement.”

Howard and Daynard are suing the defendants for anticipatory breach of contract, breach of the covenant of good faith and fair dealing, and breach of implied contract.

However, Wilner and Farah argue in a Sept. 23 filing with the federal court that the case should be remanded to the state court. They contend the federal court does not have subject-matter jurisdiction.

“The state court action is a simple contract dispute between and among lawyers involving a Joint Prosecution and Fee-Sharing Agreement,” the two law firms wrote. “No federal law, federal issue, or constitutional question is implicated.”

In 2006, the Florida Supreme Court issued an opinion in Howard A. Engle MD v. Liggett Group Inc., and decertified a class action brought by injured smokers against tobacco companies.

The court authorized the former class member plaintiffs to file individual lawsuits and use certain jury findings made in the class action.

Those plaintiffs subsequently filed lawsuits both in state and federal courts, which became known as the Engle Progeny cases.

In order to help manage the thousands of Engle Progeny Cases pending in federal court, the Middle District of Florida created a consolidated, master docket to address case management matters and other issues common to the Engle Progeny Cases.

Earlier this year, the parties in the remaining Engle Progeny Cases that were still pending in the Florida federal court -- about 415 cases -- finalized a settlement agreement.

The court, having been informed that the parties agreed on a settlement, has since administratively closed the Settled Engle Cases. It also appointed a Special Master solely to review the proposed distribution plan to apportion the settlement funds among the plaintiffs.

On Sept. 11, the Special Master issued a report and recommendation approving the final settlement distribution plan and process. The plan and agreement, however, is silent on the issue of apportioning attorneys’ fees among the law firms representing the plaintiffs.

On Sept. 14, the federal court issued an order allowing the parties seven days to object or otherwise be heard on the Special Master’s report and recommendation; no party objected. Thus, the Settled Engle Cases are essentially resolved, with the exception of the court entering the final approval of the settlement distribution plan and incidental administrative orders.

In its June 19 complaint, filed in the Duval Circuit Court, the plaintiff law firms -- Howard and Daynard -- argue that Lieff has said it will not abide by the Joint Prosecution and Fee-Sharing Agreement, or JPA, of which Howard and Daynard contend they are an intended third-party beneficiary.

“Lieff intends to attempt to retain a larger portion of the attorneys’ fees than to which it is contractually entitled,” Howard and Daynard wrote in the complaint.

“As a result, Wilner advised plaintiffs’ counsel that Wilner could not abide by the terms of the Wilner/Plaintiffs Fee Agreement [JPA].”

Howard and Daynard argue that the firms’ actions will have an “immediate and damaging effect” on them.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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