A New York state judge has ruled that a former Orrick, Herrington & Sutcliffe associate may only seek nominal damages in his claim alleging the law firm broke a promise to promote him to partner.
Patrick J. Hoeffner's 2005 lawsuit against Orrick claimed that in 2002 the firm's partners had promised to bring him into the partnership to forestall his leaving the firm and taking a client with him. The firm later allegedly reneged on the deal and fired him in 2004.
The former Manhattan-based intellectual property associate asked for $100 million in damages based on lost future earnings and other alleged economic injuries flowing from his failure to become an Orrick partner.
The highly unusual suit has attracted attention within the profession because large firms frequently hold out the carrot of partnership to associates, even as hundreds are passed over for promotion every year.
In a 35-page decision issued Friday, Manhattan Supreme Court Justice Bernard J. Fried said Hoeffner's claimed damages were "speculative" because his only agreement was with three intellectual property partners who did not have the power to make him a partner.
"Rather, his becoming a partner would have been contingent upon the occurrence of an additional event over which the Partners did not exercise control, namely the executive committee's approval and recommendation of Hoeffner to Orrick's full partnership," he wrote in Hoeffner v. Orrick, Herrington & Sutcliffe, 602694/05.
Ruling on summary judgment motions, the judge said the suit could proceed on fraud and breach of contract claims but only for nominal damages. He dismissed Hoeffner's claims for promissory estoppel, unjust enrichment, breach of fiduciary duty and intentional infliction of emotional distress.
Though nominal damages can be as low as $1, a jury could still conceivably award Hoeffner punitive damages. The former associate's lawyer, Douglas Wigdor of New York-based Thompson Wigdor & Gilly, said Tuesday he was looking forward to taking Hoeffner's case before a jury.
A spokesman for Orrick said the firm was pleased with Justice Fried's decision but declined further comment. The firm was represented by Jeh Johnson of Paul, Weiss, Rifkind Wharton & Garrison, who declined comment.
Hoeffner's dispute with Orrick arose in 2002, after two IP partners with whom he had been working on a patent litigation left to join Chadbourne & Parke. In his complaint, the former associate claims three other Orrick partners -- William Anthony, Robert Isackson and Robert Cote -- promised to make him a partner in the hopes of convincing the client to keep the litigation at Orrick.
The agreement was allegedly memorialized in a March 2002 e-mail exchange between Hoeffner and the partners. Hoeffner stated in an e-mail that his understanding was that he could elect to be put up for partner in September 2003, with the pledged support of "at least" Anthony, Isackson and Cote. Anthony, then the Silicon Valley-based head of Orrick's IP practice, allegedly replied: "Your understanding is correct. Thank you for making the right decision."
Hoeffner claims Anthony and Cote, a New York IP partner who left the firm earlier this year to launch an office in the city for McKool Smith, both assured him their support would ensure his partnership, since the firm's executive committee gave deference to practice leaders and that all of the practice group's associates put up for partnership were made partners. According to Hoeffner, Cote likened the required executive committee vote to a rubber stamp.
Based on his understanding, Hoeffner claims he turned down an offer to join Chadbourne, as well as another offer from McDermott, Will & Emery.
In his complaint, the associate claims he continued to receive regular reassurances about his promotion over the next year, even though the firm failed to retain the patent litigation case on which Hoeffner had worked. But he says he began to worry when the firm laterally recruited three New York IP partners from now-defunct boutique Pennie & Edmonds, a move the associate feared would make the department top-heavy and harm his own chances of promotion.
Indeed, Hoeffner was ultimately not put up for partner at the end of 2003. His work dwindled, and he was asked to leave Orrick in November 2004.
AWARE OF RISKS
In his decision, Justice Fried said some of the reassurances Orrick partners allegedly made could not be grounds for fraud claims because they constituted the partners' opinions that at the time Hoeffner was well regarded and stood an excellent chance of being promoted.
The judge also noted that evidence in the record showed that Hoeffner understood that, even if the three partners supported his candidacy, the executive committee process was not a rubber stamp.
In an e-mail to a friend cited by the judge, Hoeffner said: "I don't see how they could make me partner this year, but I am still going to make them go through the process." Justice Fried noted that Hoeffner's very concern about the arrival of lateral partners suggested he was aware that external factors could affect his partnership chances.
Orrick has said that, between 2000 and 2005, only 67 of 132 associates put up for partner were actually elected partner.