Ted Leopold (Photo: Melanie Bell)

The legal team spearheading the leading federal case over water contamination in Flint, Michigan, has fractured amid accusations of excessive fees, client poaching and ethics breaches.

Theodore Leopold and Michael Pitt, lead counsel in a consolidated class action in Michigan federal court, filed a March 12 motion to remove attorney Hunter Shkolnik from his appointed position as liaison to the individual plaintiffs. They say Shkolnik, of New York's Napoli Shkolnik, has been swiping their clients by forcing them to sign unlawful retainer agreements with excessive fees. Such an “appearance of impropriety and self-advancement” has led to a “series of ethical issues and conflicts,” the motion says.

“Our concern is that he has signed up class members by the thousands over a two-year period of time in illegal excessive fee contracts, and he's been providing false information to our class members who are completely confused by what is taking place in Flint,” said Pitt, of Pitt McGehee Palmer and Rivers in Royal Oak, Michigan. “We thought it was in the best interest of the Flint families and class members that we take this step so that he can be removed from his leadership position.”

Shkolnik serves as co-liaison counsel to the individual cases along with Corey Stern, a partner at Levy Konigsberg in New York.

Shkolnik's response is due on April 9.

But, in an interview, he said Pitt and Leopold, who is chairman of the catastrophic injury and wrongful death practice at Cohen Milstein Sellers & Toll in Palm Beach Gardens, Florida, filed the motion after he resisted their fee demands. In particular, he said, they wanted every individual lawyer to pay them one-third of their fees so that they would receive 80 percent of all common benefit fees in the litigation. He also refused their requirement that other lawyers not sign up new clients in Flint, he said.

Stern's appointment was not at issue, but he is set to respond on April 16. Stern declined to comment.

The next status conference is April 16.

The Flint lawsuits target three engineering firms and more than a dozen government officials who in 2014 temporarily shifted Flint's water supply from Lake Huron to the Flint River, despite studies warning its corrosive nature could risk leaching lead from old pipes into the drinking water. The cases have a myriad of allegations, including constitutional and consumer fraud claims.

Last summer, U.S. District Judge Judith Levy of the Eastern District of Michigan appointed Pitt and Leopold as lead counsel for the class actions, which were consolidated. She later added a five-person executive committee at class counsel's request that includes attorneys from Susman Godfrey and Weitz & Luxenberg. She appointed Shkolnik and Stern as co-liaison counsel for hundreds of individual cases, most of which involve medical claims.

The lawyers have filed separate complaints, but many of their claims have overlapped. The class action, for instance, seeks a compensation fund for 100,000 Flint residents to pay for medical monitoring, property damages and other costs.

According to Leopold and Pitt, the trouble began when Shkolnik sued the U.S. Environmental Protection Agency on Jan. 21 on behalf of about 1,900 individuals alleging $2 billion in property damages and personal injuries from the Flint crisis. Of those, 53 were also plaintiffs in a separate but similar case that Pitt filed against the EPA, according to Leopold and Pitt.

On March 9, Pitt filed a motion in Shkolnik's case to strike his clients as plaintiffs. He claimed many of them had no idea they were in Shkolnik's case and said they did not provide the electronic signatures that were on the retainer agreements provided by his firm.

“What happened was Mr. Shkolnik copied verbatim our complaint and included 53 of our clients in his filing, so we asked him to strike our 53 clients, he refused, we did some research into the matter, and that's when we discovered that he had signed up class members by the thousands to illegal contracts,” Pitt said.

This month's motion to remove Shkolnik made similar claims about his firm's retainer agreements—specifically, that they provided a 40 percent contingency based on gross recoveries. Michigan Rules of Professional Conduct prohibit “excessive fees,” defined as more than one-third of net recoveries in contingency matters involving personal injuries.

Shkolnik blamed problems in his firm's retainer agreements on a “clerical error” that was “immediately corrected.” As to the 53 plaintiffs in the EPA case, he insisted those individuals were his firm's clients.

“These clients all signed a retainer with Napoli Shkolnik under their own volition and understood that the firm was pursuing their cases,” he wrote in opposition papers. He wrote that Pitt and “the Flint Water Class Action Legal Team,” which includes other firms, “misled the 53 plaintiffs to believe that they were their sole legal counsel for all Flint water contamination claims and filed claims on their behalf.”

At any rate, he said, his retainer agreements were not the issue. Leopold and Pitt didn't like that he signed up 1,700 new clients at a town hall meeting last month.

“Every time I sign up 1,000 clients, that's 1 percent of their class disappearing,” he said.

And he has his own ethics concerns about Leopold and Pitt, he said.

“I took the position, rightfully, that it is unethical to discuss fees in this type of setting before you've ever obtained any result for the class or the mass litigation, and I refuse to even discuss these issues with them,” he said. “It's unethical to demand of lawyers that they will not represent new clients who have been injured by a tragedy like this.”