A version of this story was originally published by The National Law Journal, an American Lawyer affiliate. You can read the Litigation Daily’s prior coverage of the case here, here, and here.
A federal judge in Washington state has publicly disciplined two attorneys from Robbins Geller Rudman & Dowd for claiming unreasonable expenses while handling a securities class action.
U.S. District Judge Justin Quackenbush in Spokane issued an order of reproval on July 24 against attorney Joy Bull, who, according to the order, resigned as a partner from Robbins Geller last week at the firm’s request.
The order issued a lesser sanction, an admonition, against John Grant, still a partner at the firm.
The two attorneys were lead counsel for a plumbers pension fund in a 2007 case against Ambassadors Group Inc., a publicly traded student exchange company in Spokane, Wash. The case settled last year for $7.5 million.
The attorneys originally claimed about $223,000 in expenses but revised that figure to $114,137 after Quackenbush questioned the amount, according to an opinion he issued in May. Following that revision, the judge and his staff took a closer look at other expenses claimed by the firm.
Some of the more troubling expenses, the judge wrote in May, included a $400 claim for a “pre-mediation” dinner for four that included two $70 bottles of wine and a $60 tip. It is unclear which Robbins Geller attorneys claimed those expenses. Also cited was a $1,676 first-class ticket for an investigator’s air travel and another first-class plane ticket costing more than $2,100.
The attorneys ultimately revised the original $223,000 in claimed expenses to $99,845. Quakenbush approved the expenses and $1.6 million in attorney fees in June.
In censuring Bull, Quackenbush noted that an Oregon federal judge had denied expense claims that she filed in a second case. “Ms. Bull’s experience in similar matters in other courts, including a finding of misleading statements…should have caused Ms. Bull to avoid ever again being in the position of having to defend unsubstantiated or misleading expense claims,” he wrote. Even though Bull retired on July 31 at the request of Robbins Geller management, he continued, it was unclear whether she would continue to practice.
A person answering the phone at Robbins Geller did not provide forwarding contact information and said that Bull “would not be taking calls on the case.” An attorney representing Bull did not return a phone call.
In issuing an admonition against Grant, Quackenbush wrote that he found him “less culpable.” In claiming the expenses, Grant relied on figures provided by Bull, the judge wrote, but still had an ethical duty to investigate their accuracy.
Grant did not return a phone call seeking comment.
Quackenbush did not sanction the law firm itself. He found no pattern by its attorneys of misrepresenting or falsifying expenses and said the firm took appropriate steps when they learned of the problem. Those steps included holding special partner and employee meetings to make sure claims for expenses were truthful and accurate.
Based in San Diego, Robbins Geller focuses on securities class actions and has about 140 lawyers. Donald Curran, an attorney at Delay, Curran, Thompson, Pontarolo & Walker in Spokane, Wash., represented the firm in the sanctions matter.
“The firm is very pleased with the judge’s decision that exonerates them of any sanctions,” Curran said.