Kline & Specter has sued two California-based personal injury firms over fees related to the three firms’ work together as co-counsel in 71 cases involving injuries from the use of dental adhesive.
According to the suit, Kline & Specter alleges California firms Levin Simes and Schneider Wallace as well as Levin Simes name partner William A. Levin usurped Kline & Specter’s sole authority as settlement counsel in the cases and did not pay the firm settlement fees it was owed under their agreement.
A day after the suit, Kline & Specter v. Levin Simes, was filed, the defendants filed a motion Tuesday to remove it from the Philadelphia Court of Common Pleas to the U.S. District Court for the Eastern District of Pennsylvania.
According to its complaint, Kline & Specter said it agreed to serve as local counsel in the 71 cases brought by Levin Simes and Schneider Wallace in the Philadelphia mass tort litigation known as Denture Cream Adhesive Litigation.
Under the agreement, Kline & Specter would receive 5 percent of all settlement proceeds in the 71 cases. The firm would also receive an additional payment of between 5 percent and 10 percent, depending on the case, for its role as settlement counsel in these cases, according to the complaint.
The initial agreement between the firms was reached August 23, 2011. Aside from the flat 5 percent fee for serving as local counsel, the agreement provided for an additional 7.5 percent of the gross settlement to go to Kline & Specter for any of the 71 cases the firm settled with defendant "P&G," Kline & Specter alleged in the complaint.
Kline & Specter would get an additional 5 percent of a gross settlement for settlements the firm reached with defendant GlaxoSmithKline that were less than $500,000. Kline & Specter would get 7 percent of the settlement for settlements it reached with GSK between $500,000 and $1 million, and would get 10 percent of the settlement for settlements worth more than $1 million, the firm alleged in the complaint.
The agreement between Kline & Specter and Levin Simes and Schneider Wallace was amended January 11, 2012. The firms agreed Kline & Specter exclusively would negotiate with GSK and P&G in the dental adhesive litigation, according to the complaint. Under the new agreement, Levin Simes was not to mention settlement to GSK or P&G counsel or the court without first discussing it with Kline & Specter, the firm alleged in the complaint.
Kline & Specter said in its complaint that it performed all of its duties under the agreement, going "well beyond" what might have been expected of local counsel. The firm said in the complaint that it readied all 71 cases for settlement through talks with counsel for GSK and P&G.
But according to the complaint, Levin allegedly began to negotiate directly with GSK and P&G on resolving the 71 cases on behalf of Levin Simes and Schneider Wallace. Kline & Specter was unaware of those negotiations until Levin sent Shanin Specter an email October 5, 2012, announcing he was close to reaching settlements in the cases, according to the complaint.
"Levin Simes and Schneider Wallace settled all of [their] denture cream claims against GSK without the participation or knowledge of Kline & Specter," according to the complaint. "They did so by piggy-backing on the significant work that Kline & Specter performed in relation to settlement."
Kline & Specter alleged in the complaint that it has attempted to collect the fees from Levin Simes and Schneider Wallace but the firms have refused to pay the full amount owed. Kline & Specter did not disclose the amount it was owed, citing confidentiality in the underlying settlements.
The firm sued the two law firms for breach of contract and unjust enrichment. It sued Levin for tortious interference with prospective economic advantage.
Steven E. Angstreich of Weir & Partners is representing Levin Simes, Schneider Wallace and Levin.
"This is just a dispute over whether or not an enhanced fee was earned under the agreement these attorneys reached over a period of several months of discussions, and there’s a disagreement as to whether or not my clients had a right to negotiate the settlements for their clients or they had abdicated that right as Kline & Specter eluded to in their complaint," Angstreich said.
He said it would be a "heck of a thing" for a lawyer or firm to give other counsel sole authority to negotiate a settlement for their clients forever. Angstreich said that although Kline & Specter attempted to settle the cases, "they were unsuccessful" and months later the California firms were successful.
As to the tortious interference claim, Angstreich said there is case law out there about whether someone — in this case, Levin — could tortiously interfere with his own firm’s contract.
Charles L. Becker of Kline & Specter is representing his firm in the case. He did not immediately return a call for comment.