Photo: Jason Doiy/ALMEx-Sichenzia Ross Partner Sues Baker Botts for $35M, Alleging Extortion on Behalf of Ex-Client
Harvey Kesner alleges that Baker Botts threatened to alert federal authorities and sue him on behalf of his former client, MabVax, if he did not pay $9.6 million. Mabvax is currently suing Kesner with other representation.
January 24, 2020 at 06:26 PM
4 minute read
The original version of this story was published on The American Lawyer
Harvey Kesner, a former partner at New York-based securities litigation firm Sichenzia Ross Ference, is suing Baker Botts and one of its partners for $35 million, accusing the Am Law 100 firm of extortion for its threats to sue on behalf of his former client, who is separately suing Kesner for alleged conflicts and fraud.
Kesner's suit, filed Tuesday in federal court in New York, alleges "racketeering, tortious interference with contract and business expectancies, intentional infliction of emotional distress, prima facie tort, and misconduct" by Baker Botts and partner Jonathan Shapiro.
The allegations center on Shapiro's work for Kesner's former client, California biotech company MabVax. That company is now represented by a different law firm, Block & Leviton, in ongoing litigation against Kesner and Sichenzia Ross.
Asked for comment on Kesner's suit, Baker Botts denied the allegations, also noting the litigation currently pending against Kesner and Sichenzia Ross. "This complaint has no basis in fact or law," a Baker Botts spokesperson said in a statement Friday.
The latest complaint by Kesner stems from his dispute with MabVax, which turned to Baker Botts and Shapiro in 2018, according to the complaint.
Kesner alleges that Shapiro and Baker Botts told him he must pay Baker Botts $9.6 million to account for acts of "fraud, breaches of duty, defalcations and other misfeasance" he committed while representing MabVax.
Kesner, after being sued separately by MabVax in California without Baker Botts representation, lost his partnership at what was Sichenzia Ross Ference Kesner, the complaint said. The punitive damages Kesner is seeking stem from him being forced out of his firm.
In his complaint, Kesner alleges that Baker Botts and Shapiro never filed any suit related to Mabvax's claims. However, MabVax did sue Kesner and his former firm in California, with Block & Leviton as representation.
MabVax sued a group of defendants including Kesner, Sichenzia Ross Ference and other lawyers from the firm in September 2018, alleging that they failed to disclose conflicts of interest, failed to maintain client confidentiality, and failed to provide proper legal advice on financial reporting requirements.
Sichenzia Ross represented MabVax in matters related to SEC reporting, including an SEC investigation, MabVax's complaint said. The company alleged that Kesner and the firm held their own investments in MabVax and had relationships with the company's other investors. It also alleged that the lawyers shared confidential information about MabVax with other investors to the company's detriment.
MabVax's suit against Sichenzia Ross was transferred to federal court, after initially being filed in San Diego Superior Court, and it survived a motion to dismiss in May of last year.
But before that, Kesner's complaint alleges, Baker Botts threatened to sue him and implicate him with criminal authorities if he did not pay the $9.6 million. The firm also delivered a draft complaint to him in New York, Kesner alleged.
The complaint alleges that Kesner suffered from "extreme emotional and physical distress under the repeated threat that Baker Botts would use its power, Washington connections, and position of trust as MabVax's legal counsel to 'turn in' Kesner to the [Dept. of Justice] and SEC and promote their case," according to the complaint.
He is seeking $10 million in compensation, wants that amount tripled to $30 million for damages and requests $5 million in punitive damages along with coverage of legal fees and administrative costs.
Kesner's attorney, Robert Buschel, did not immediately respond to a request for comment Friday.
Sichenzia Ross, reached Friday, said "Sichenzia Ross Ference is not a party to the litigation, and has no comment." Kesner is no longer listed on the firm's website.
This is not the first time Kesner's removal from a law firm led to litigation. He sued Haynes and Boone in federal court in 2010 after he was asked to leave the firm, and the firm struck back by suing him in Texas state court. They later settled the dispute.
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