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Lawrence v. Graubard Miller

Alice Lawrence had timely paid $18 million over 22 years to Graubard Miller in a lengthy dispute over her husband’s estate. The law firm had billed her on an hourly basis—until there was a $60 million settlement offer on the table, at which point it suddenly renegotiated its retainer agreement to be a 40% “contingent fee”, though there was obviously nothing contingent about the award, and the firm wasn’t offering to repay the money it had already billed. Five months later, there was a $105 million settlement—and Graubard Miller claimed as its fee for the five months of work $42 million of the $45 million additional money that it had negotiated, for a total of $60 million for the case. Lawrence asked the New York courts to protect her, but a 4-1 majority of the Appellate Division upheld the decision (via Lattman). The New York Times article (not to mention Bizarro-Overlawyered, which unsurprisingly doesn’t care much about fraud and rip-offs when they’re occasioned by attorneys against widows) doesn’t even begin to mention the fact that the “contingent fee” didn’t provide any risk for the law firm: the retainer agreement had a floor whereby Graubard Miller got to charge an hourly rate for the first year of trial even if it didn’t collect anything, guaranteeing it another $1.2 million on top of the $18 million it had already collected. The best coverage in the New York Law Journal, which notes that Graubard Miller schnorred another $7.8 million in gifts and gift taxes from Lawrence, whose total payment thus totaled nearly $68 million. (Anthony Lin, “Late 40 Percent Retainer Pact Survives Widow’s Dismissal Bid”, Nov. 29; Anthony Lin, “Widow’s Suit Seeks Return of $50M in ‘Excessive’ Fees and Gifts”, Sep. 16, 2005).

Unfortunately for Lawrence’s case, she did negotiate the Graubard Miller firm down from its original 50% (!) contingent-fee proposal, so in one sense she wasn’t completely the unwitting pawn of the firm, even though Graubard Miller failed to suggest that she consult independent counsel about the multi-million dollar negotiation. The question becomes whether the attorney-client relationship is at all fiduciary, or whether it’s purely contractual—in which case, one wonders why there is such an elaborate screening mechanism to permit prospective attorneys to participate in the guild in the first place.

It’s nice that the New York courts are so respectful of contracts that they dismiss cases at an early stage of the litigation. One hopes that they do that in situations other than those involving the fiduciary duties of attorneys.

Read On…

January 6 roundup

  • “In fact, none of the mass shootings that have grabbed headlines in the last few years would have been prevented by the gun controls proposed in response to them, and Obama’s new list of warmed-over ideas does not break any new ground in that respect.” [Jacob Sullum] More: Dave Kopel; Ken White at Popehat on the President’s rhetoric of rights; Jonathan Adler notes that ATF’s new guidance on who’s a gun dealer either restates existing law (yawn) or violates the Administrative Procedure Act (whee!); Eugene Kontorovich wonders whether that guidance is vague on purpose; and Josh Blackman writes that while most of the President’s orders don’t go much beyond “hortatory fluff” (no more letting attorneys set up gun trusts for MS-13 gang members!) they help lay the groundwork for more intrusive measures to come;
  • “Judge tosses consumer suit claiming SeaWorld falsely asserts its whales are well-treated” [ABA Journal]
  • In a single press release on Missouri mosque vandalism case, the U.S. Department of Justice misleads readers in two important ways [Eugene Volokh on legal significance of burned Koran, omission of ideological content in sprayed graffiti slogans]
  • New Greg Ip book “Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe” [Tyler Cowen and more, Arnold Kling]
  • Plaintiff’s lawyers “salivating at the prospects for big paydays” from self-driving car accidents [Bloomberg]
  • Do “arms trafficking” rules extend even to domestic sharing of data files containing information on three-dimensional printing of guns? [Ilya Shapiro and Randal John Meyer, Cato]
  • So the Graubard Miller/Alice Lawrence mega-fee saga, often covered in this space, turns out to have a Sheldon Silver connection [Wayne Barrett]

Ethics roundup

  • FBI looks at allegations Dallas DA filed fraud suit as favor to donor [Free Beacon]
  • “Suing ex-client for $500K in divorce fees led to disbarment ruling for former bar president” [Virginia; former “titan” of D.C. matrimonial bar, ABA Journal]
  • “Appeals court cuts ‘unconscionable’ estate legal bill from $44M to perhaps $3M” [ABA Journal on Graubard Miller / Alice Lawrence case, earlier]
  • Empirical puzzler: advent of lawyer advertising doesn’t seem to have had the expected fee-reducing effect [Nora Freeman Engstrom, SSRN via LEF] Law firm marketers were all over the Metro-North crash case [Eric Turkewitz]
  • “DOJ Inspector General’s report: US Attorney unlawfully leaked to discredit critic” [of “Fast and Furious” operation; John Steele]
  • “Lawyer accused of bilking real estate investors through false claims of criminal probes takes plea” [New Jersey; ABA Journal]
  • Claim: disciplinary decisions to reinstate errant lawyers should be more guided by experts [Bruce Green and Jane Moriarity, SSRN via LEF]
  • If you find it hard to believe opponents would gin up flimsy “speech-gave-offense” charges against Fifth Circuit Judge Edith Jones, recall the earlier ginned-up (and now mostly forgotten) charges against distinguished appellate judges Dennis Jacobs and Alex Kozinski.

December 18 roundup

  • Class action to follow? Longtime Overlawyered favorite Gloria Allred now representing one of the Tiger Tootsies [The Observer]
  • Alabama lawyer moves to postpone trial so he can see Crimson Tide take on Texas [Yahoo “Rivals”]
  • “Thomas the Tank Engine attacked for ‘conservative political ideology'” [Telegraph; Canadian academic calls for tighter controls on children’s broadcasting]
  • Government manages to lose money at bookie racket: “NYC’s Off-Track-Betting Seeks Bankruptcy Protection” [Bloomberg]
  • “Rapist ex-lawmaker claims copyright on his name, threatens legal action” [Boing Boing, Volokh, Randazza/Citizen Media Law]
  • Graubard Miller $42 million contingency fee “now in referee’s hands” [NYLJ; earlier Oct. 5, etc.]
  • It’ll destroy our image of him: opponents say “alleged Ponzi schemer and disbarred attorney Scott Rothstein filed frivolous lawsuits” [DBR]
  • New Hampshire disciplinary panel finds prominent injury attorney broke ethics rules in handling client who talked of firing him from multi-million-dollar case [Keene Sentinel]

“Thank goodness for especially greedy lawyers in high-profile lawsuits”

David Giacalone figures that at least the jaw-dropper fee cases serve one useful purpose: they remind judges, the public and the legal profession itself “that we really do have a ban on unreasonable fees and expense charges — we [lawyers] can’t agree on them, charge them, or collect them”. With discussion of the Coughlin Stoia/Coke, Lawrence v. Miller, and certain lawyers’ willingness to bill two clients full freight for the same hour on the clock. (f/k/a, Nov. 21).

December 5 roundup

  • You are cordially invited to a fishing expedition for lawsuits over energy drink/alcohol mixes. RSVP: Center for Science in the Public Interest [Balko, Reason “Hit and Run”]
  • Recent Overlawyered guestblogger Victoria Pynchon mediates an ADA claim against a Long Beach motel owner. Extortion? Fair compromise? Both? Neither? [Settle It Now, scroll]
  • 19-year-old Ciara Sauro of Pittsburgh is disabled, in medical debt, and waiting for transplant, crowning touch is the $8,000 default judgment RIAA got against her for downloading 10 songs [Ambrogi]
  • “It does not take a graduate degree to understand that it is unacceptable to hide evidence and lie in a deposition” — Seventh Circuit sanctions Amtrak worker for dodgery in workplace-injury suit [Ohio Employers’ Law; Negrete v. Nat’l Railroad Pass, PDF]
  • New Richard Nixon tapes: “I can’t have a high-minded lawyer … I want a son-of-a-b—-.” [Althouse]
  • Aramark suit documents unsealed: girl paralyzed by drunk driver got $25 million in suit against New York Giants stadium beer vendor [AP/Vineland, N.J. Daily Journal, earlier]
  • New York high court bounces Alice Lawrence/Graubard Miller fee suit back to lower courts, says more info needed [NYLJ, earlier]
  • Couple claims retention of $1,075 rental security deposit was racially motivated, seeks $20 million [WV Record; Martinsburg, W.Va.]

November 18 roundup

  • Harvard’s Charles Nesson argues that Digital Theft Deterrence and Copyright Damages Improvement Act of 1999 violates Constitution by letting civil lawyers for RIAA enforce a criminal law [AP/MSNBC, Elefant]
  • In some circles, bitter disappointment at reports that Obama camp probably won’t pursue Bush predecessors as war criminals [Paul Campos, Horton/Harper’s; earlier]
  • Latest on wrangle over “exorbitant” fee: Alice Lawrence’s deposition-skipping before her death could endanger her estate’s claim against Graubard Miller law firm [NYLJ, earlier]
  • One benefit of role as law school mega-donor, as Mark Lanier is with Texas Tech, is that you get to rub (hunting-jacket) elbows with visiting Supreme Court justices [WSJ law blog]
  • Lou Dobbs and Phyllis Schlafly were among those who pushed bizarre theory of secret conspiracy to merge U.S. into “North American Union” with Canada and Mexico [John Hawkins]
  • Senate Dems plan to abolish secret ballot for installing unions in everyone else’s workplace, so how come they insist on one for themselves in deciding how to handle Joe Lieberman? [Dan Riehl via McArdle]
  • Congrats to historian Rick Brookhiser and City Journal editor Myron Magnet, among recipients of 2008 National Humanities Medal [White House release, Brian Anderson, NRO]
  • Jarek Molski, California entrepreneur of disabled-access complaints, loses bid for Supreme Court review of his designation as vexatious litigant [AP, Bashman]

October 24 roundup

  • Chemerinsky, other critics should apologize to Second Circuit chief judge Dennis Jacobs over bogus “he doesn’t believe in pro bono!” outcry [Point of Law and update]
  • New York high court skeptical of ultra-high contingency fee in Alice Lawrence v. Graubard Miller case [NYLJ; earlier here and here]
  • Panel of legal journalists: press let itself be used in attack on Judge Kozinski [Above the Law]
  • Unfree campaign speech, cont’d: South Dakota anti-abortion group sues to suppress opponents’ ads as “patently false and misleading” [Feral Child]
  • Even if you’re tired of reading about Roy Pearson’s pants, you might still enjoy Carter Wood’s headlines on the case at ShopFloor [“Pandora’s Zipper“, “Suit Alors!“]
  • Rare grant of fees in patent dispute, company had inflicted $2.5 million in cost on competitors and retailers by asserting rights over nursing mother garb [NJLJ]
  • Time to be afraid? Sen. Bingaman (D-N.M.) keen on reintroducing talk-radio-squelching Fairness Doctrine [Radio Equalizer]
  • “Yours, in litigious anticipation” — Frank McCourt as child in Angela’s Ashes drafted a nastygram with true literary flourish [Miriam Cherry, Concurring Opinions]