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The lesson of a fight between law firms over how to divvy up $10 million in attorney fees in an Arizona environmental tort case is “don’t make a contract like this one,” according to Neil McCabe of Houston’s John M. O’Quinn law firm. The 9th U.S. Circuit Court of Appeals resolved contract terms between O’Quinn’s firm and Brown & Bain, a Phoenix firm that has since merged with Perkins Coie, by upholding the Brown firm’s claims to fees in addition to its hourly charges before leaving the litigation. “The way I presented the question to the court, it would be like a hired hand who walked off the job saying years later, ‘I should get a bonus when the boss loses money,’” said McCabe, who argued the case for O’Quinn. McCabe said the firm is considering a request for en banc review by the court. Lawrence A. Kasten, of Phoenix’ Lewis and Roca, representing Brown & Bain, declined comment on the ruling. The dispute stems from a 1991 suit by 900 people in the Phoenix area claiming $100 million in damages against Motorola for environmental pollution. The O’Quinn firm contracted to receive a 40% contingent fee plus costs and expenses. Ultimately, Motorola agreed to pay $26.3 million to settle the case in 2002. O’Quinn treated $13.7 million as costs chargeable to clients and also $10.1 million as the 40% fee. Clients recovered approximately $2.5 million, or roughly $2,100 apiece, according to the court. In 1993, O’Quinn hired Brown & Bain to manage the case in Phoenix at a reduced hourly rate in a contract that allowed added payment to Brown once a settlement was achieved. But Brown left the case in 1998. The Brown firm came back after the 2002 settlement seeking to enforce its contract terms with O’Quinn, attempting to recover a total fee of $6.2 million, according to the opinion. The fee battle ensued. O’Quinn argued it had not claimed all expenses because it would have left clients with nothing and that the firm had actually lost $3.2 million in the deal. Judge John T. Noonan said the O’Quinn expense claims were not proven and “however it accounted to itself, it remained liable to Brown & Bain for the amount it had agreed to pay after it had received an amount equivalent to the discount rate payments.” As part of its educational outreach, the 9th Circuit set the case as one of several argued at the University of California’s Boalt Hall Law School in February. “A fee fight between lawyers, what fun to put before law students,” said McCabe. Attorneys with Perkins Coie were not available for comment.

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