PITTSBURGH (Legal Newsline) - A fight for control over a proposed class action has descended into nasty attacks and counterattacks, as the lawyer who filed the first case accuses the prominent Philadelphia law firm Berger Montague of colluding with the defense and Berger Montague accuses her of being a “silly” and unqualified conspiracy theorist.
The warring attorneys are scheduled to meet tomorrow in a Zoom conference with U.S. District Judge Cathy Bissoon to try to sort out who should lead the litigation. Based on the court filings so far, it won’t be pretty.
Much of the acrimony seems to stem from the different backgrounds of the lawyers fighting for control of class actions against InventHelp, a company accused of defrauding would-be inventors by charging them tens of thousands of dollars for allegedly worthless advice on patenting and marketing their ideas.
The first proposed class action was filed by Julie Perchersky Plitt of Oxman Law, a highly credentialed New York University Law School graduate whose prior experience was almost entirely on the defense side of class actions. Plitt says she filed the so-called Calhoun case in June 2018 after being contacted by a disgruntled InventHelp customer and spending months investigating the company.
Plitt got a quick lesson in how the plaintiff side of the business works a few months later when she noticed an advertisement on the classaction.org website seeking clients for a lawsuit against InventHelp that featured the very complaint she had filed.
Plitt didn’t respond to requests for comment. But in court filings she says she went undercover to figure out who was behind the ad.
She filled out a referral form on the website and received an email back inviting her to participate in a “free consultation.” She says she called the number provided and spoke with Berger Montague associate Devona Thomas, who explained the lawsuit Plitt had filed without mentioning Berger Montague had nothing to do with it.
Plitt says the advertisement violated Pennsylvania legal ethics rules because it didn’t identify Berger Montague; Berger Montague says it is enough the firm is listed as a “sponsor” of the website.
In subsequent court filings, Plitt has accused Berger Montague of trying to hijack her case, to the detriment of class members. But far from being unusual, the firm’s tactics are typical in class actions, in which law firms tend to pile on with copycat complaints early in the action to compete for the lucrative role of lead counsel.
Eventually most firms strike deals with each other, particularly over the hours racked up by low-paid associates and contract attorneys that they can submit to the court as a “lodestar” for calculating their fees when a case is settled.
There is nothing unusual about this type of cooperation, although some critics say it is a form of collusion that has the effect of keeping fees high. Plaintiff law firms typically keep the difference between the $20-$50 an hour they pay contract attorneys and “market rates” of $400 an hour or more, then work out their own arrangements with the lead counsel that sometimes include giving the top law firm the difference between this hypothetical market rate and the “lodestar multiplier” judges award to compensate attorneys for taking on the risk of the case.
Critics of the class action system say plaintiff lawyers also collude with the defense, negotiating settlements that reward them with rich fees but rarely reach beyond available insurance proceeds, while protecting company principals from paying damages.
Plitt says all of these factors are in play in the InventHelp case. Berger Montague began negotiating with InventHelp President Robert Sosa even before the firm filed a copycat suit in October 2019, she says. And she describes that suit as “curious” because it doesn’t name Sosa as a defendant even though the American Inventors Protection Act provides for personal liability for executives.
After Berger Montague formally joined the fray, Oxman Law formed an alliance with Kirby McInerney, a big New York class action firm, to help prosecute its case. Plitt says Kirby McInerney later struck a deal with Berger Montague to “fall on its sword” and “relinquish the lodestar it had accumulated in the Calhoun actions (which was not insubstantial).”
“Kirby would bow out of the Calhoun actions in exchange for future partnerships between Kirby and BM in the antitrust field that would be profitable for Kirby,” Plitt writes.
Berger Montague partner Shanon Carson didn’t respond to a request for comment. In a filing today with his colleague Peter Kahana, however, he dismissed Plitt’s complaint as “the workings of a conspiracist” and allegations of an agreement with Kirby McInerney as “without a shred of evidence.”
Kirby McInerney partner Ira Press told Legal Newsline his firm “represented the putative class assiduously and ethically” while it was involved in the case.
“We do not want to get into the reasons why we withdrew from the suit, other than to say that we vehemently deny any assertion that we were offered anything whatsoever by Berger & Montague in consideration for our withdrawal,” Press said in an e-mailed response.
Plitt’s complaints were magnified in a heavily redacted July 13 court filing, in which she says Berger Montague and InventHelp hired a Philadelphia mediator, retired Judge Diane M. Welsh, without her knowledge and proceeded to an 11-hour mediation session on June 4.
“I have been practicing law 22 years and I have never experienced anything like this mediation,” Plitt wrote, followed by extensive redactions in black. In an earlier filing she said InventHelp’s “sub rosa maneuvers with Berger Montague” have “all the hallmarks of a collusive agreement in the making.”
Carson, in his filing today, says Plitt's inexperience pursuing class actions is evident and bashes her for using a fake name when she investigated Berger Montague's classaction.org ad.
“Her primary strategy has been to engage in speculation to try and discredit honorable Officers of this Court and a former U.S. Magistrate Judge, and her strategy and approach is not what the putative class needs,” Carson wrote.