WASHINGTON (Legal Newsline) - This month, a top whistleblower attorney and his Washington, D.C., firm asked a federal court to dismiss a lawsuit that accuses them of engaging in a “surreptitious scheme” to steal another firm’s client.
Defendants Guttman Buschner & Brooks PLLC and senior founding partner Reuben Guttman filed a motion to dismiss or, alternatively, for summary judgment Oct. 10.
They argue in their 24-page motion that many of the factual assertions made by plaintiff Grant & Eisenhofer PA, headquartered in Wilmington, Del., are “recklessly false.”
The Delaware firm, in its lawsuit filed Aug. 24, seeks to recover more than $7 million in fees and costs it incurred in representing a California whistleblower. It contends Guttman, one of its former attorneys, allegedly breached his duty to the firm and acted unethically.
More specifically, G&E accuses Guttman and his firm of breach of fiduciary duty, tortious interference with contract, unjust enrichment and the imposition of a constructive trust.
G&E alleges Guttman, while still a director at G&E in 2015, allegedly stole the firm’s client, Beverly Brown.
Brown, who worked as a Celgene Corp. sales representative, filed her whistleblower complaint in 2010 over the off-label use of drugs Thalomid and Revlimid. Off-label use is the use of pharmaceutical drugs for an unapproved indication or in an unapproved age group or dosage.
“In the present lawsuit, G&E has made allegations that serve no purpose other than to damage Defendants’ reputation and extort payment far in excess of G&E’s legal entitlement (if any) to its fees and costs,” Guttman wrote in his motion to dismiss, filed in the U.S. District Court for the District of Columbia.
Guttman and his firm allege the “gravamen” of the case -- and a yet-to-be-served complaint filed in the U.S. District Court for the Central District of California Aug. 10 -- is G&E’s claim for its fees in Celgene.
In the lawsuit filed in the Central District of California, G&E accuses Brown and two other law firms, Richard Harpootlian PA and Bienert Miller & Katzman PLC, of conspiring to terminate G&E to keep all of the court-awarded fees and Brown’s portion of a $280 million settlement.
Guttman, because of a contractual provision, had to be sued separately in the District of Columbia.
According to its complaint, G&E represented Brown from 2009 through 2015 and advanced more than $7 million in legal fees and costs, which Brown and her new attorneys now refuse to pay.
“The claim seems simple enough, and it could and should have been decided through G&E’s presentation of its claim for costs and fees to the district court in California presiding over Celgene,” Guttman wrote in his motion. “G&E has both refused to produce its billing records to the Court so that it can assess reasonableness, and repeatedly refused requests by its former client -- Ms. Brown -- to provide backup documentation for its asserted fee claims.
“Under California law and ethical rules, this request should have been honored within 10 days. Instead, G&E has ignored it for five months.”
G&E alleges Guttman’s relationship with the firm “soured” by early 2015, and he had announced his intention to leave the firm by the end of the year.
The firm also claims that after announcing his decision, Guttman’s relationship with colleagues “deteriorated even further.” G&E’s management, following complaints of his behavior toward other directors and staff, asked Guttman to leave in April 2015.
But Guttman contends G&E is attempting to mislead the court, arguing he was not terminated for abusing staff.
“The April 5, 2015 email from Guttman to G&E senior attorney Daniel Berger, which G&E places at the heart of its Complaint, tells the true story,” he wrote in his motion. “In March 2015, Guttman announced his planned resignation because he was uncomfortable with various unethical practices by G&E and its principals, but he gave nine months’ notice to avoid any disruption to cases and, as the Complaint admits, so as ‘not to blind side anyone.’
“Shortly after he raised some, but by no means all, of the ethical issues in his April 5, 2015 email, G&E responded by informing Guttman that he was terminated, effective immediately.”
According to Guttman’s motion, those issues include:
- G&E named partner Stuart Grant’s alleged sexual harassment of female associates;
- Alleged pressure by G&E named partner Jay Eisenhofer to settle cases against client wishes and contrary to clients’ best interests so that G&E could save costs; and
- G&E’s alleged “misleading representations” to prospective clients regarding its experience and success in litigating pharmaceutical mass tort cases.
“I am also honestly disappointed with the Directors at the firm. No one has stood up to these guys,” Guttman wrote in the April 5, 2015 email to Berger, which was included as an exhibit to his motion. “That the Mass torts practice can basically run on misrepresentations is stunning to me or that the consumer practice jumps into cases just to shake down a dollar is disturbing. And the hostile work environment for women or the basic failure to even learn the names of the lawyers who work for you, is wrong. To have a conversation about cases and never once ask about the client's position is wrong.”
Guttman also contends he never improperly solicited Brown.
He alleges he brought in Brown as a client to the firm and that he was responsible for bringing the Celgene case.
Brown has asserted, in a declaration filed this month, that she “liked and trusted” Guttman.
“She has never even met or spoken to Eisenhofer or Grant, and did not like the senior attorney assigned to the case,” Guttman wrote in his motion. “She would not have continued to pursue the case without Guttman as her counsel.”
He continued, “Should this case proceed to discovery and ultimate adjudication on the facts, Defendants are confident that G&E will be revealed as the only tortious actor in this case, both in its dealings with Defendants and in its dealings with Ms. Brown and other clients.”
According to Celgene, the litigation related primarily to allegations that it promoted Thalomid for off-label uses before its 2006 U.S. Food and Drug Administration approval for newly-diagnosed multiple myeloma, a form of blood cancer that develops in the bone marrow.
Under the settlement, which Celgene announced in July, the pharmaceutical company will pay a total of $280 million to the U.S. federal government, 28 states, the District of Columbia and the City of Chicago.
“Celgene has denied any wrongdoing in this matter, but is settling to avoid the uncertainty, distraction, and expense of protracted litigation,” the company said in a July 25 statement.
“Celgene contends, and has contended throughout the litigation, that Thalomid and Revlimid are medical breakthrough medicines that have benefitted patients with serious illnesses; that physicians prescribed these medicines based on their independent medical judgment; and that Celgene's relationships with physicians have been appropriate, and have helped to advance patient care and science.”
On Friday, in the District of Columbia case, Guttman and his firm filed a special motion to strike G&E’s complaint in its entirety, pursuant to California’s anti-SLAPP, or Strategic Lawsuit Against Public Participation, statute.
The statute was enacted to prevent and deter lawsuits brought primarily to “chill” the valid exercise of individuals rights’ of petition and free speech.
“Simply put, G&E alleges Defendants conversed with their client regarding who should represent her in the Celgene matter, the legal validity of G&E’s fee agreement in Celgene, and how she should respond to G&E’s demand for fees and costs in Celgene,” according to the motion to strike. “All of this alleged tortious conduct arises from and directly relates to the advice and representation Defendants provided to their client in Celgene.
“Such alleged solicitation and inducement, even if true, is protected activity made in connection to pending litigation.”
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.