Grant & Eisenhofer has sued a former whistleblower client and two other law firms, alleging the whistleblower and her current lawyers conspired to strip Grant & Eisenhofer of its fee on a $280 million settlement.
The Grant & Eisenhofer complaint, filed Thursday in Los Angeles federal court, targets Beverly Brown, a former Celgene Corp. saleswoman who the firm represented for several years in a False Claims Act suit accusing the drug company of illegally promoting medications for off-label uses. The suit also names as defendants the San Clemente, California-based law firm Bienert, Miller & Katzman and the firm of Columbia, South Carolina-based lawyer Richard Harpootlian.
The lawsuit alleges that Brown and the two law firms conspired with Reuben Guttman, a former Grant & Eisenhofer director—the equivalent of a profit-sharing partner—to deprive Grant & Eisenhofer of its share of fees in connection with a settlement in the Celgene false claims suit. The Celgene case settled in July for $280 million, and Brown could be in line for a whistleblower award of between $70 million and $84 million, according to Thursday’s complaint.
“Despite the fact that G&E represented Ms. Brown from 2009 through 2015, and incurred over $7 million in fees and costs representing Ms. Brown, she and her attorneys affirmatively refuse to pay G&E a dime in fees and costs, or any part of the relator’s bounty she contracted to share with G&E,” the complaint said.
David Wiechert, a San Clemente, California-based lawyer who is representing the Bienert and Harpootlian firms, said in an email Monday that the complaint is baseless and his clients are considering a countersuit.
“The allegations by Grant & Eisenhofer against [its] former client, and the attorneys who obtained a tremendous result for her, are groundless, and Grant & Eisenhofer should feel ashamed for making them,” Wiechert wrote. “My clients Bienert, Miller & Katzman & Richard Harpootlian, P.A. are evaluating potential counterclaims against Grant & Eisenhofer as we speak.”
Although not named as a defendant in Thursday’s complaint, many of the allegations relate to Guttman, who departed Grant & Eisenhofer in 2015 alongside Traci Buschner and Justin Brooks. The three went on to start the Washington, D.C.-based plaintiffs firm Guttman, Buschner & Brooks. Guttman didn’t immediately respond on Monday to a request for comment.
Guttman and Grant & Eisenhofer were previously embroiled in litigation related to his departure from the firm. In November 2015, the two sides settled a suit accusing Guttman and his partners of stealing clients and bringing them to their new firm. In Thursday’s complaint, Grant & Eisenhofer said it would have sued Guttman in Los Angeles federal court in connection with the Celgene whistleblower representation, but a contract requires the firm to file any disputes with Guttman in Washington, D.C., the complaint said.
Grant & Eisenhofer alleges that it entered a retention agreement with Brown in 2009 to help the former Celgene sales representative pursue her false claims whistleblower lawsuit. The agreement entitled Grant & Eisenhofer to a 40 percent contingency fee of any award Brown might get in connection with the whistleblower suit, according to Thursday’s complaint.
The complaint alleges that after Guttman left Grant & Eisenhofer in 2015, he signed Brown as a client and sought to terminate her relationship with Guttman’s former firm.
Grant & Eisenhofer alleges that the Bienert firm, which served as local counsel in the Celgene false claims suit, “knew of Ms. Brown’s surreptitious departure enabled by Guttman” and has since taken part in an effort to “deprive G&E of its fees and costs and percentage of the Celgene settlement.” Thursday’s lawsuit also takes aim at the Harpootlian firm, which allegedly began to represent and provide financial backing to Brown’s whistleblower case shortly after Guttman left Grant & Eisenhofer to start a new firm.
Jill Basinger and Rory Miller of Glaser Weil Fink Howard Avchen & Shapiro in Los Angeles filed Thursday’s complaint on behalf of Grant & Eisenhofer.
Scott Flaherty covers the business of law with a special focus on plaintiffs firms. He can be reached at firstname.lastname@example.org. On Twitter: @sflaherty18.