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The Prattipati family would have been content with a $7.5 million settlement from the man who took their daughters from India to Berkeley, Calif., where he forced them into a sex and forced-labor ring. But according to a lawsuit filed May 9, their attorneys held out, and — after a jury was empanelled and the plaintiffs were deposed — eventually won a settlement of $8.9 million. Unhappy with their representation and fee arrangement, the Prattipatis are now suing their lawyers for malpractice, according to the complaint filed in San Francisco Superior Court. Attorneys with Altshuler, Berzon, Nussbaum, Rubin & Demain and Latham & Watkins settled a host of claims against Lakireddy Bali Reddy in April 2004, three years after Reddy, a Berkeley real estate magnate, pleaded guilty to criminal charges of illegally bringing young girls from India to the East Bay for sex and unpaid labor. One of the Prattipatis’ two daughters in the case died of carbon monoxide poisoning in a poorly ventilated room in which Reddy kept her. In the suit filed May 9 by San Francisco malpractice specialist William Gwire, the family alleges that Michael Rubin of the Altshuler firm and Latham’s John Flynn were so insistent on going to trial in the case that they rebuffed their clients’ instructions to settle, inflicting emotional distress by prolonging the litigation and forcing their clients to undergo depositions and court appearances. They “refused to abide by the Clients [sic] instructions to settle the case,” first for $7.5 million and later for a higher fee, until a jury was empanelled, Gwire wrote. He accuses the lawyers of intentionally holding out because their contingency fee would jump from 33.3 percent to 40 percent once a trial was under way. “Attorneys wanted to try the case for the publicity and notoriety,” the complaint also alleges. It levels several other charges, including the claim that plaintiff lawyers engaged in an unlawful fee agreement and racked up unnecessary expenses in an unsuccessful attempt to bring the case as a class action. Rubin said last week that he was taken aback by the complaint, and denied all its allegations. “We were surprised to learn of the suit following our very successful representation of the Prattipatis,” he wrote in an e-mail Friday. “When a dispute arose about how to allocate the remaining settlement proceeds, we urged the Prattipatis to obtain independent counsel and we placed the disputed funds in escrow pending a resolution by arbitration.” Arbitration is a key issue in the malpractice suit, Gwire said, because the arbitration clause was included in part of the contract that the Prattipatis are challenging. Gwire said that clause is part of an illegal fee-splitting agreement between the plaintiff firms. “Why the hell should we give in to their bogus arbitration provision?” he said Friday, calling for nonbinding mediation instead. Gwire wants Flynn to disgorge any fees from the agreement between Latham and the Altshuler firm because, he says, his clients were not informed of the arrangement. Rubin and Flynn have not filed a response to the complaint, and have yet to name defense counsel. Lawyers in the case, Prattipati v. Altshuler, 05-441105, are set to make their first court appearance on Oct. 7.

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