ANN ARBOR, Mich. (Legal Newsline) – In the litigation over the water crisis in Flint, Mich., a nasty battle has broken out between nationally known plaintiffs firms that are each accusing the other of greedy behavior during the fight for clients.
First, Cohen Milstein asked a federal judge to remove Napoli Shkolnik from its position as liaison counsel. Now, Napoli Shkolnik is requesting Cohen Milstein be removed as interim co-lead class counsel.
It was an alleged ultimatum and a town hall meeting with a TV actor that prompted the dispute, with Cohen Milstein filing its motion March 13.
“(T)he repeated representation that the federal judge appointed (Hunter Shkolnik) to be in charge of all the lawyers handling individual cases, and the apparent use of settlement information obtained in his role as liaison counsel, provides the appearance of using his position to benefit the Napoli Shkolnik firm,” Cohen Milstein’s motion says.
Napoli Shkolnik’s response? The motion “is nothing but a retaliatory smear campaign.”
“As evidenced by their lack of evidentiary support, Interim Counsel’s allegations of unethical conduct are a complete fabrication,” Napoli Shkolnik wrote.
“They are designed only to discredit Mr. Shkolnik in the hope that Interim Counsel can gain complete control of the litigation so that they can line their own pockets. In short, the motion is nothing more than a blatant money grab.”
Flint’s water crisis began in 2014, and it was later determined that residents were possibly exposed to elevated levels of lead in their water.
Litigation followed. Figures from Cohen Milstein show there are 54 individual cases pending, with 638 identified plaintiffs pursuing recovery outside of the class action lawsuit. Plaintiffs identified only by initials total another 2,642.
Cohen Milstein has obtained an important role in the class action litigation as co-lead class counsel.
As liaison counsel for the individual cases, Napoli Shkolnik was tasked with coordinating discovery, preparing status reports and keeping other plaintiffs attorneys updated on the progress of the litigation.
Cohen Milstein believes Napoli Shkolnik represents 228 individual identified plaintiffs. Its retainer agreements with those plaintiffs are troubling to Cohen Milstein, which argues state law does not allow the firm to charge a 40% contingency fee out of the gross recovery.
Instead, all that is allowed is 33% recovery out of the net recovery, Cohen Milstein says.
“The widespread use of this retainer agreement, the failure to ensure that (Shkolnik’s) retainer agreements were compliant with federal and Michigan rules and laws combined with the absence of neutrality and the appearance of impropriety in utilizing his role as co-liaison counsel to advance the interests of Napoli Shkolnik necessitated this motion,” Cohen Milstein wrote.
Napoli Shkolnik, though, say it has made the necessary changes to the retainer agreements, calling it a “harmless error.”
Following a Jan. 26 settlement conference, Napoli Shkolnik put on a town hall Feb. 18 at the Metropolitan Baptist Church.
Harper Hill, an actor who was a series regular on “CSI: NY” and now part of the main cast on “The Good Doctor,” was featured as the celebrity emcee.
At the event, Napoli Shkolnik retainer agreements (now changed to a 33% contingency fee) were passed out, Cohen Milstein says, and Hill and a councilman encouraged attendees to sign them. Shkolnik did not tell attendees to sign with his firm, but Cohen Milstein still feels he breached the ethics laws regarding solicitation.
“The statements made by Napoli Shkolnik at this event which followed the first settlement meeting utilized their status as court appointed liaison (repeatedly referring to the court’s appointment of them as lead attorneys), and pending settlement negotiations to influence the Flint residents as to their choice of counsel,” Cohen Milstein says.
“Napoli Shkolnik overreached with regard to their statements and again solicited Flint residents with improper retainer agreements.”
It all sounds scandalous until you consider the source, Napoli Shkolnik responded.
“Their motion… is nothing but a compilation of speculation, hyperbole, innuendo and in some places outright falsities,” Napoli Shkolnik responded April 9.
“Interim Counsel has been engaging in their own untoward practices. They have signed up as clients, both class and individual plaintiffs, despite the clear conflicts between the two groups. They have sent out improper class notices prior to certification.
“Just as deceitful, they have issued ultimatums to other counsel in this case that they will essentially shut them out of attorneys fees unless they are willing to engage in Interim Counsel’s deliberately opaque billing and work-assignment practices.”
Cohen Milstein is handing out work assignments and lodestar hours to firms with which it has side fee-sharing agreements that they hoped to hide from a third-party audit, Napoli Shkolnik claims.
Napoli Shkolnik says it proposed an order that would allow a special master to periodically review time-and-expense submissions, but Cohen Milstein demanded all such submissions go straight to it.
Ultimately, Cohen Milstein would not agree to such an order unless Napoli Shkolnik stopped signing clients and Cohen Milstein would receive 80% of the common benefit funds and one-third of attorneys fees from the individual cases, Napoli Shkolnik says.
“Now that their ultimatum has been rejected, Interim Counsel has attempted to seize on minor errors and invent wild tales regarding what happened at the town hall meeting… all in an effort to grab full control of this litigation (and the associated fees) to the detriment of Flint’s residents.”
Joining Cohen Milstein in its motion is Michael Pitt of Pitt McGehee Palmer & Rivers in Royal Oak, Mich.
Pitt has a conflict of interest in representing the class and individual plaintiffs and should be removed from his position as co-lead class counsel, Napoli Shkolnik argues.
“Thus, if the court certifies a class for only individuals who have not manifested injuries, Mr. Pitt still owes a duty to those clients who have manifested injuries, creating a serious risk of trade-offs and selling his client’s claims short,” Napoli Shkolnik wrote.
From Legal Newsline: Reach editor John O’Brien at john.obrien@therecordinc.com.