Blank Rome has sued Andrus Wagstaff for unpaid legal fees associated with getting the firm $13 million in common benefit compensation in the transvaginal mesh litigation.

The lawsuit, filed Monday, alleges that Andrus Wagstaff owes Blank Rome $489,500 after retaining the Philadelphia firm to help boost its common benefit fees in the transvaginal mesh litigation from the $8.7 million amount that a fee and cost committee originally allocated. Blank Rome, the lawsuit alleges, was able to get another $4.9 million, which, under the terms of the retention agreement, entitles it to 10% of the amount of the increase.

"To date, however, Andrus Wagstaff has continued to refuse to provide payment to Blank Rome for the full amount of its performance incentive fee, going so far as to attempt to insert new language into the parties' agreement—in violation of basic rules of contract construction—in an effort to avoid paying Blank Rome's fee in its entirety," wrote Blank Rome partner Frank Dante.

Neither Dante, in Philadelphia, nor Blank Rome's partners representing Andrus Wagstaff, Laurence Shtasel in Philadelphia and Michael Cioffi, head of the Cincinnati office, responded to requests for comment.

Vance Andrus and Aimee Wagstaff, co-founders of Andrus Wagstaff, based in Lakewood, Colorado, did not respond, either.

The dispute began a year ago when a leadership committee of seven transvaginal mesh multidistrict litigation proceedings in the Southern District of West Virginia federal court asked to set aside 5% of all settlements for common benefit fees. That request, which ultimately led to a federal judge granting $550 million in common benefit fees based on an estimated $11 billion in settlements, raised objections from a handful of the 94 law firms entitled to compensation, including Kline & Specter, Mazie Slater Katz & Freeman and Andrus Wagstaff. The firms argued they were entitled to more for the work they did in lawsuits against mesh manufacturers including Boston Scientific Inc. and Johnson & Johnson's Ethicon Inc. Some also accused the fee and cost committee's eight lawyers of allocating excessive fees to themselves.

Andrus Wagstaff claimed its preliminary allocation for common benefit work was unfair. Wagstaff, who was co-lead of the multidistrict litigation against Boston Scientific, cited one example where a member of the fee and compensation committee, Clayton Clark of Clark, Love & Hutson, requested his firm be paid $45.5 million, or more than $960 an hour, while he recommended her firm receive $8,715,000, which comes to nearly $295 an hour.

According to Monday's lawsuit, Blank Rome was able to add another $4,895,000 to Andrus Wagstaff's allocation.

Under an engagement letter, dated Nov. 9, 2018, which Andrus Wagstaff signed two months later, Blank Rome agreed to discount its standard hourly rates by 25% but include an incentive fee payment that used a sliding scale based on the increase it was able to obtain. For instance, if Blank Rome got between $1 million and $2 million more, it was entitled to 3% of that increase. Because it was able to obtain more than $4 million, Blank Rome was entitled to 10%, according to the contract's terms, the lawsuit says.

The increase includes $4,285,000 that Blank Rome claims it got through its legal services and another $610,000 that came from a boost of the entire fund of common benefit fees from $350 million to $400 million.

But, in an Oct. 8 email, Wagstaff told Shtasel that she was able to negotiate $1 million before retaining Blank Rome. That lowered the amount attributed to Blank Rome's legal services to $3,285,000, entitling the firm to 3% for the first $2 million and 6% for the remaining $1,285,000, for a total of $137,000. She disagreed that Blank Rome was entitled to compensation tied to the general boost of common benefit fees.

Cioffi, in an Oct. 17 response email to Wagstaff, insisted that the increased pot should be included in the incentive payment fee and that her calculation, based on the terms of the contract, was "unreasonable because it depends entirely on inserting new language into the agreement."