A federal judge in Michigan has refused to remove lead attorneys in the Flint water contamination case but plans to bring in a special master to review their fees and expenses.
In an order on Tuesday, U.S. District Judge Judith Levy in Ann Arbor refused to grant a motion brought by Ted Leopold and Michael Pitt, co-lead counsel for a consolidated class action, to remove Hunter Shkolnik from his post as co-liaison counsel to the individual cases. They claimed Shkolnik was luring prospective class members into signing illegal retainer agreements with his firm, New York-based Napoli Shkolnik.
Shkolnik fired back with his own motion to remove Leopold, of Cohen Milstein Sellers & Toll in Palm Beach Gardens, Florida, and Pitt, of Pitt McGehee Palmer and Rivers in Royal Oak, Michigan. In his motion, Shkolnik called the action to remove him a “blatant money grab” and requested the court name a special master to review submissions to the common benefit fund, which goes to lead plaintiffs attorneys who work on contingency fee for the class.
Levy’s decisions to reject the motions from all sides left the Flint leadership team intact. Following a hearing on Monday, she didn’t outline her reasons for denying the motions.
But she placed term limits on her leadership appointments. All of the appointments are set to expire on Dec. 31, although they may apply for reappointment. Those applications must be filed by Nov. 16 under the court order.
Levy also said she planned to bring in Deborah Greenspan, a partner at Blank Rome in Washington, D.C., to serve as special master.
Greenspan was special master in a settlement program involving Vietnam War veterans exposed to Agent Orange. A former law partner of Kenneth Feinberg, she also was deputy special master for the 9/11 victim compensation fund. Greenspan, who joined Blank Rome from Dickstein Shapiro in 2016, became the focus of an audit last year by the U.S. Department of Justice Office of the Inspector General. The report raised concerns about a potential conflict of interest Greenspan might have after the Sept. 11 fund gave more than $3.6 million worth of contracts to her law firms.
In her order, Levy wrote that the special master would handle time and expense administration, coordinate with lawyers in other cases and handle discovery matters “as needed.” She ordered all objections or “potential reasons for Ms. Greenspan’s disqualification” be filed by July 2.
In a separate time and expense order, she required lawyers to submit their records monthly to the special master. She also ordered that the special master audit the common benefit fund on a quarterly basis.
“We are happy with Judge Levy’s denial of the motion to replace me and look forward to working with the special master she appoints in the implementation of time and expense order,” Shkolnik said. “Clearly my dogged pursuit to rein in class counsels’ billing practices was the impetus of the motion against me and now this has been taken care of.”
Shkolnik, whose firm has represented 9/11 victims, said he supported Greenspan as special master.
Greenspan did not respond to a request for comment. Leopold and Pitt also did not respond.
The lawsuits target engineering firms and more than a dozen government officials over the 2014 decision to shift the city’s water supply from Lake Huron to the Flint River, despite studies warning the corrosive nature of the river could risk lead getting into the drinking water supply.
Last summer, Levy appointed Pitt and Leopold as lead counsel for all the class actions in federal court, and Shkolnik and Corey Stern, of Levy Konigsberg, as co-liaison for hundreds of individual cases, most of which involve medical claims. The lawyers have filed separate complaints, but many of their allegations overlap.
The dispute arose as both sides are meeting with two mediators, one of whom is former U.S. Sen. Carl Levin, D-Michigan.
On March 12, Leopold and Pitt filed a motion to remove Shkolnik, alleging he swiped their clients while demanding that he and Stern get 40 percent of a potential common benefit fund, plus their contingency fees.
Shkolnik, in his own motion, said Leopold and Pitt had their own demands, which would have netted them 80 percent of common benefit fees. They also had “secret side-fee deals” with other law firms, he said.
Even one of the defendants, Veolia North America, weighed in with concerns about how all three lawyers were communicating with potential class members.
Stern called on both sides to reach a truce for the sake of the Flint litigation.