Boies Schiller Flexner offices in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)

Two ex-clients of Boies Schiller Flexner filed a lawsuit Thursday alleging that firm founder David Boies and D.C. partner Michael Underhill committed legal malpractice and breached fiduciary duties as counsel, among other allegations.

The lawsuit, filed in New Jersey by Telebrands Corp. and Bulbhead.com, alleges that repeated mistakes in IP litigation against competitors Tinnus Enterprises and Zuru Limited over a similar product resulted in a multimillion-dollar judgment against Telebrands and Bulbhead.com, and a subsequent confidential settlement with Tinnus.

Additionally, the complaint alleges, the Boies Schiller lawyers' litigation style led to millions of dollars of additional post-trial enhanced damages against the plaintiffs.

"Defendants elected to litigate the IP litigation in an overly aggressive manner, taking positions and filing excessive and untimely motions and appeals, which was a substantial factor in plaintiffs being assessed with sanctions and enhanced damages, as well as inflating the fees and expenses that defendants billed to plaintiffs," the complaint reads.

The allegations arise from Boies' and Underhill's work on three IP lawsuits filed against Telebrands and Bulbhead.

The first lawsuit came in 2015, when Tinnus and Zuru alleged that Telebrands' water balloon toy "Balloon Bonanza" infringed on their ongoing patent for a similar product, "Bunch O Balloons." The patent was approved in June 2015, and Tinnus filed another lawsuit in Texas, alleging that the plaintiffs were infringing on the newly minted patent.

Telebrands first hired New York-based IP firm Cooper & Dunham, which argued that Tinnus' patent was invalid. But in September 2015, the judge ruled that Telebrands could no longer sell the product.

In December 2015, the complaint said, Telebrands hired Boies and Underhill. As of Thursday, Underhill is no longer listed on Boies Schiller's website.

A spokesperson for Boies Schiller declined to comment on the lawsuit. Asked about Underhill, the spokesperson confirmed that he has left the firm, adding that his departure is unrelated to the suit filed Thursday.

Soon after joining the case, Boies advised the plaintiffs that a new second-generation product, "Battle Balloons," would not infringe on Tinnus' patent. Boies and Underhill then engaged in a "concerted effort" to reassure the plaintiffs' retailers that the new product does not infringe on the patent, the plaintiffs allege. On advice of counsel, the plaintiffs agreed to indemnify the retailers, the complaint alleges.

Then came a series of defeats for the plaintiffs. In October 2016, a judge filed an injunction forbidding the sale of Battle Balloons and a federal appeals court upheld the injunction in 2017.

Additionally, Tinnus filed a third lawsuit against the plaintiffs, alleging their third-generation product, "Easy Einstein Balloons," violated two other Tinnus patents. An injunction was also filed in that case, the complaint said.

When the Texas lawsuit went to trial in 2017, a jury returned a verdict against Telebrands: $10.25 million in lost profits, $2 million in royalties and $67,000 relating to the retailers' infringement, according to the complaint.

Telebrands and Bulbhead allege that Boies and Underhill were directly responsible for that outcome, and that the attorneys were negligent and breached their standard of care. According to the complaint, the firm regularly re-staked positions that had already been decided and significantly changed their defense on the "eve of the trial."

The lawsuit also alleges that Boies and Underhill "improperly counseled and advised" the plaintiffs when the attorneys assured Telebrands that the product redesign did not infringe on Tinnus' patent and failed to notify the plaintiffs of the risk and exposure of the case—despite the fact that Boies and Underhill knew the plaintiff lacked insurance to respond to an adverse verdict.

In a post-trial 2019 ruling, the trial court entered additional awards against Telebrands and Bulbhead: $12,289,488 in enhanced damages and $4.75 million in attorney fees and expenses—bringing total damages to $29.4 million.

The complaint alleges that Boies Schiller's actions in trial directly contributed to the enhanced damages through "overly aggressive" representation.

"Defendants' egregious conduct at trial, as summarized in the trial court's post-trial opinion … was a substantial factor in the awards against plaintiffs in the Tinnus II trial and post-trial motions," the complaint alleges.

In the opinion levying the enhanced damages against the plaintiffs, the judge said, "defendants' motion practice in this case was excessive and seemingly conducted for no legitimate purpose other than to burden plaintiffs and cause delay."

Due to the alleged negligence and missteps by Boies and Underhill, Telebrands and Bulbhead allege legal malpractice, a breach of fiduciary duty, vicarious liability and unjust enrichment and restitution. They are seeking compensatory damages, attorney fees, cost of suit and repayment of costs and fees paid to the attorneys.

Boies and Underhill have not responded to the suit. The plaintiffs are represented by New Jersey-based trial firm Mazie Slater Katz & Freeman. Attorneys at Mazie Slater did not immediately respond to a request for comment on the case.

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