Grant & Eisenhofer has quietly resolved a contentious dispute over allegations that a former firm lawyer, whistleblower attorney Reuben Guttman, poached a client in a lucrative False Claims Act lawsuit against cancer drug manufacturer Celgene Corp.
Those involved in the dispute—Grant & Eisenhofer on one side and, on the other, Guttman, his current Washington, D.C.-based firm Guttman, Buschner & Brooks and whistleblower client Beverly Brown, a former Celgene saleswoman—filed a joint stipulation Tuesday looking to dismiss litigation playing out in Los Angeles federal court. The filing cited a negotiated settlement that would require each side to pay its own attorney fees and costs.
Additional details of the settlement were not publicly available. A lawyer for Guttman and his new firm, The Law Office of David W. Wiechert, confirmed that the case was resolved on “mutually agreeable terms” but said the settlement was confidential. Steven Basileo of Glaser Weil Fink Howard Avchen & Shapiro, a lawyer representing Grant & Eisenhofer, did not respond to a request for comment.
While there’s no indication of a connection between the events, the settlement came less than a week after Bristol-Myers Squibb Co. announced that it would buy Celgene for $74 billion, one of the largest ever transactions in the biopharmaceutical space.
Assuming a judge signs off on the stipulation, the settlement would close the book on a bitter legal battle that traces its roots to Guttman’s time as a Grant & Eisenhofer director, the plaintiffs firm’s equivalent of a partner. While there, Guttman began representing Brown in a qui tam False Claims Act lawsuit that accused Celgene of marketing two blockbuster cancer drugs, Thalomid and Revlimid, for “off-label” uses that hadn’t received regulatory approval.
Guttman left Grant & Eisenhofer in 2015 and, in July 2017, the Celgene false claims case settled for $280 million, putting Brown in line for a hefty whistleblower award. She was eventually granted 28 percent of the settlement value, $78.4 million, as her whistleblower bounty, with a portion of that heading to Brown’s legal team as fees.
In a pair of August 2017 lawsuits—one initially filed in D.C. federal court against Guttman and the other against Brown in Los Angeles—Grant & Eisenhofer alleged that Brown and her lawyers conspired to poach the Celgene matter from the firm after it had spent several years as her legal counsel.
The suits, later consolidated in Los Angeles federal court, asserted that Grant & Eisenhofer had shelled out some $7 million in expenses while handling the case between 2009 and 2015. The Brown suit also named as defendants the San Clemente, California-based law firm Bienert Katzman, which served as local counsel in the Celgene case, and the firm of Columbia, South Carolina-based lawyer Richard Harpootlian, who did some work on the Celgene matter after Guttman departed Grant & Eisenhofer.
Guttman has forcefully contested the allegations. He argued in October 2017 that far from stealing Brown away from Grant & Eisenhofer on his way out the door, Brown stayed with Guttman because he had been the lead lawyer throughout the Celgene case and she trusted him as her lawyer.
In December 2017, U.S. District Judge Philip Gutierrez dismissed most of the claims Grant & Eisenhofer brought against Brown, and in March 2018 the judge freed up her whistleblower award after the law firm attempted to assert a charging lien against the money. Those rulings didn’t directly impact the firm’s claims against Guttman, but this week’s stipulation resolves all remaining aspects of the dispute.