Labaton's Relationship With Texas Lawyer Extended Beyond State Street Case
Labaton partner Christopher Keller said State Street "was and is an outlier" because, unlike in at least three other litigation matters, Texas lawyer Damon Chargois never did work on the case.
October 29, 2018 at 04:36 PM
5 minute read
A Texas lawyer whose $4.1 million payment from Labaton Sucharow is at the heart of a special master's inquiry has worked with the New York plaintiffs firm in at least three other high profile litigation matters, according to declarations submitted last week.
Labaton partners Christopher Keller and Eric Belfi filed the declarations in response to an Oct. 16 order by Judge Mark Wolf of the U.S. District Court for the District of Massachusetts asking for more information into the firm's relationship with Houston lawyer Damon Chargois. Wolf is considering whether to approve a deal struck earlier this month between Labaton and special master Gerald Rosen, whose investigation into potential overbilling revealed that Labaton had failed to disclose what he called a $4.1 million referral payment to Chargois. The Houston lawyer had ties to the lead plaintiff in the State Street case, Arkansas Teacher Retirement System.
In declarations filed on Thursday, Keller and Belfi listed at least three other litigation matters in which Chargois worked with Labaton but, unlike the State Street case, actually worked on the cases—or planned to do so. In State Street, Keller wrote in his declaration, the “Chargois situation was and is an outlier.”
“Like virtually all other law firms, we have many matters derived from referrals and recommendations from peer law firms,” Labaton wrote in a statement. “Aside from the one Chargois-ATRS arrangement, none of our other referral arrangements included fees paid based solely on introductions or client referrals. In all instances where another attorney has referred a client to us, that attorney has also worked on the referred case.”
Chargois of Mashayekh & Chargois did not respond to a request for comment.
In his report, released publicly on June, Rosen found that the three plaintiffs firms—Labaton, the Thornton Law Firm in Boston and San Francisco's Lieff Cabraser Heimann & Bernstein—had overbilled and should return more than $10 million to class members. He also found that Labaton, which failed to disclose the referral payment, should contribute as much as $8.1 million.
On Oct. 10, Labaton agreed to return more than $4.8 million in attorney fees and make several internal changes as part of its deal with Rosen.
Wolf, whose order sought to answer several questions he had about the deal, has scheduled a hearing for Nov. 7.
The judge specifically asked Keller, co-chairman of the firm, and Belfi, who serves on the executive committee, to address whether Labaton had agreements with Chargois or anyone else to share fees “solely for assistance in obtaining clients for Labaton.”
In their declarations, both lawyers clarified that Labaton had an agreement with Chargois & Herron to develop institutional clients.
“The expectation and original intent of this agreement was that Damon Chargois would provide legal assistance with those potential clients and would be involved in representing the client in the cases,” Belfi wrote in his declaration. “If Chargois was able to help jointly develop these clients, he would be entitled to receive up to 20 percent of Labaton's fees relating to these clients, if, at least as Labaton understood the agreement, the client was the lead plaintiff or co-lead plaintiff. However, other than the Arkansas Teacher Retirement System, those efforts were unsuccessful. Chargois never developed any pension fund clients beyond ATRS.”
Labaton and Mashayekh & Chargois worked on other cases together, however. Both firms filed two individual securities cases against BP plc following the 2010 Deepwater Horizon spill, according to the declarations. Those cases are now part of multidistrict litigation in Houston. “If and when the cases settle or plaintiffs obtain a favorable judgment, Chargois will be entitled to a fee based on the work he performed as local counsel in the cases,” Keller wrote.
Labaton and Mashayekh & Chargois also jointly represented seven clients in multidistrict litigation in Miami federal court over recalled Takata airbags, but none actually filed lawsuits, so no fees were paid, according to both declarations.
Chargois also referred a client to Labaton in 2014 who filed an antitrust class action over capacitors, according to the declarations. That case became part of the related multidistrict litigation in San Francisco federal court and, when it settled, Mashayekh & Chargois got $23,655, or 10 percent of the fee awarded to Labaton in that case.
“I am unaware of any current or on-going agreements, whether written or unwritten, that Labaton has to share fees with anyone else solely for assistance in obtaining clients for Labaton, i.e., a bare referral fee,” Keller wrote. “Indeed, it was always the intention, including with Chargois, that the referring counsel would play an important role locally with the client. To my knowledge, the Chargois situation was and is an outlier.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All'A Template' for Religious Accommodation: Attorney Gives Insight to $12M Win Over Employer's COVID-19 Vaccination Policies
Baltimore City Govt., After Winning Opioid Jury Trial, Preparing to Demand an Additional $11B for Abatement Costs
3 minute read5th Circuit Judge Jones Slams Proposal for Greater Amicus Brief Funding Disclosure
Trending Stories
- 1Remembering Ted Olson
- 2Support Magistrates: Statutorily Significant
- 3Nelson Mullins, Greenberg Traurig, Jones Day Have Established Themselves As Biggest Outsiders in Atlanta Legal Market
- 4Immunity for Mental Health Care and Coverage for CBD: What's on the Pa. High Court's November Calendar
- 5Monday Newspaper
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250