Judge Narrows Grant & Eisenhofer Suit Over Alleged Client Poaching
The ruling still leaves Grant & Eisenhofer with one claim that allows it to continue seeking some fees.
December 08, 2017 at 05:48 PM
4 minute read
A California federal judge has trimmed most of the claims from a Grant & Eisenhofer lawsuit that accused a former whistleblower client and two other law firms of conspiring with a departed Grant & Eisenhofer director to deprive the firm of legal fees.
Ruling on Wednesday, U.S. District Judge Philip Gutierrez of the Central District of California threw out all but one claim that Grant & Eisenhofer made against former Celgene Corp. saleswoman Beverly Brown, the San Clemente, California-based law firm Bienert, Miller & Katzman and the firm of Columbia, South Carolina-based lawyer Richard Harpootlian.
The suit grew out of Grant & Eisenhofer's past work for Brown, who the firm represented for several years in a False Claims Act suit accusing the drug company Celgene of illegally promoting medications for off-label uses. The Celgene case resulted in a $280 million settlement announced in July of this year. That deal puts Brown in line for a whistleblower reward that could be between $70 million and $84 million.
Brown cut ties with Grant & Eisenhofer around the time the lead lawyer in her whistleblower case departed the firm in 2015. The lawyer, Reuben Guttman, was a Grant & Eisenhofer director—the firm's equivalent of a profit-sharing partner—before leaving alongside two colleagues to form the Washington, D.C.-based whistleblower boutique Guttman, Buschner & Brooks. Guttman and his new firm have continued to represent Brown.
In the wake of the Celgene settlement, Grant & Eisenhofer took aim at Guttman and his new firm in one lawsuit, while also filing a separate lawsuit that targeted Brown, the Bienert firm and Harpootlian. The Bienert firm was targeted over its role as local counsel on the Celgene false claims suit, while Harpootlian allegedly began to represent Brown and finance the Celgene case after Guttman left Grant & Eisenhofer.
According to the suit against Brown, Bienert and Harpootlian, those three allegedly schemed with Guttman to poach the Celgene case and deny Grant & Eisenhofer any share of the fees related to the $280 million settlement or a portion of Brown's “bounty” for serving as a whistleblower in the false claims case. Grant & Eisenhofer said in court papers that it racked up some $7 million in expenses while representing Brown between 2009 and 2015. Grant & Eisenhofer's suit alleged several claims, including breach of contract, interference with a contract and breach of fiduciary duty.
In response, Brown, Bienert and Harpootlian filed special motions to strike certain claims and motions to dismiss Grant & Eisenhofer's complaint. The motions to strike targeted specific claims on the grounds that Grant & Eisenhofer's suit ran afoul of California's anti-SLAPP law, which guards against lawsuits that seek to stymie protected speech.
Gutierrez on Friday granted the motions to strike several claims that, the judge found, arose from communications between Brown and her lawyers that were protected under the anti-SLAPP law. The judge also granted Brown's motion to dismiss a breach of contract claim against her, finding that as a legal client, she had an absolute right to terminate her relationship with Grant & Eisenhofer.
Although the decision narrowed the case, all three defendants will continue to face a quantum meruit claim lodged by Grant & Eisenhofer, according to Gutierrez.
A lawyer representing the Harpootlian and Bienert firms, David Wiechert, didn't immediately respond to a request for comment on Friday, nor did a representative for Grant & Eisenhofer. Brown is represented by the Los Angeles-based Spertus, Landes & Umhofer.
Gutierrez's ruling does not affect the parallel lawsuit that Grant & Eisenhofer brought directly against Guttman and his current firm. That case was initially filed in Washington, D.C., though it has since been transferred to federal court in Los Angeles, where it has been assigned to U.S. District Judge John Kronstadt.
Guttman, represented by Outten & Golden, has fervently denied the allegations against him, describing them as a rehash of old claims that were litigated elsewhere and as an attempt to sully his reputation. Guttman has filed several motions in response to the suit. Kronstadt has yet to rule on them.
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