Lakin and Freed-Weiss class action battle for fees and control continues in N.J,

By Steve Korris | Sep 2, 2010



NEWARK, N.J. – Brad Lakin of Wood River and Paul Weiss of Chicago, who apparently resolved a public battle in 2008, waged it in secrecy this year.

They kept it quiet in arbitration until Weiss's firm, Freed and Weiss, asked U.S. District Judge Jose Linares of Newark for an injunction ending the arbitration.

Weiss claimed the former Lakin Law Firm sought to disturb an allocation of legal fees that Linares ordered in a class action settlement.

Weiss claimed Lakin aimed to litigate issues Linares had previously decided.

Weiss lost privacy and gained nothing, for Linares denied an injunction on Aug. 18.

Linares found he lacked jurisdiction because the dispute was never presented to him or decided by him in connection with the class action.

Linares wrote that the arbitration related entirely to an agreement between the firms.

He wrote that it sought to resolve a narrow dispute over an alleged breach of the agreement.

He found insufficient evidence that Lakin tried to frustrate the orderly allocation of fees.

Lakin and Weiss teamed 12 years ago, when Lakin started a class action practice.

For six years they loaded the Madison County docket with class actions.

They sued Sprint telephone company in 2004, on behalf of Jessica Hall of Pontoon Beach, over fees for early contract terminations.

Circuit Judge Nicholas Byron certified Hall to lead a national class action.

In 2006, the partnership between Lakin and Weiss broke down.

Richard Burke left Lakin and continued associating with Weiss.

Burke sued Lakin, and Lakin countersued Burke.

Weiss sued Lakin in Cook County, and Lakin sued Weiss in Madison County.

Litigation raged throughout 2007, ending with a settlement early in 2008.

During the dispute, Weiss and Burke had started a class action against Sprint in federal court at Newark.

At first their class excluded the class Hall represented in Illinois, but through settlement negotiations the new class swallowed the Hall class.

Lakin objected to the $17.5 million settlement, claiming he would have obtained better terms in Madison County.

He accused Weiss and Burke of running a "reverse auction," bargaining downward in order to settle before other lawyers could settle similar claims in other courts.

Lakin urged Linares to disqualify Weiss and Burke as class counsel.

Lakin argued that Linares should award no fees to Freed and Weiss, claiming they performed little work beyond copying Hall's case.

Linares rejected Lakin's arguments last year, and he included Freed and Weiss when he distributed more than $5 million in fees.

Last October, Lakin filed an arbitration complaint with JAMS, a Chicago firm.

Charles Chapman, of LakinChapman, wrote that Freed and Weiss breached the 2008 agreement by filing a suit similar to Hall's without Lakin's permission.

Chapman wrote that Freed and Weiss breached the agreement by negotiating a settlement in New Jersey without permission.

He wrote that Lakin sustained damages no less than $2 million.

He wrote that Freed and Weiss also breached the agreement by trying to settle a Lakin class action against Allstate without permission.

"FW attempted to negotiate the attorneys' fees before an agreement was reached on the class relief," he wrote.

He wrote that Lakin anticipated fees no less than $15 million, but negotiated only $9 million in fees and expenses due to Freed and Weiss's conduct.

He wrote that Lakin sustained damages no less than $1 million.

This June, an arbitrator ruled that Lakin presented a justiciable controversy.

In July, Weiss turned to Linares for help.

"LakinChapman apparently does not feel bound by this court's orders or the orderly process for fee resolution established by this court," wrote James Cecchi of New Jersey.

"This action offends and interferes with this court's jurisdiction, and creates a dangerous precedent for parties' ability to settle class action cases," he wrote.

"One law firm cannot be permitted to upend, for its own benefit, a process established by this court and accepted by over 20 law firms," he wrote.

He wrote that "the arbitrator, with an obvious financial incentive to keep the claim going, has decided to allow Lakin to proceed."

For Lakin, Anthony Coviello of New Jersey answered on Aug. 2 that the arbitration didn't seek fees from the Sprint settlement.

He wrote that it sought compensation for the loss of opportunity to settle the Hall case.

"The application before this court is merely the latest attempt by FW to avoid its contractual obligations," he wrote.

"FW's suggestion that the arbitration implicates all the law firms who participated in the settlement is simply false," he wrote.

He recommended that Linares treat it as a side issue between Illinois law firms, and Linares adopted the recommendation.

Meanwhile, Lakin's appeal of Linares's earlier decisions remains pending at the Third Circuit in New York.

The appeal asks if Linares should have disqualified Weiss and Burke.

It asks if he should have let Hall conduct discovery into circumstances of the settlement.

It asks if he should have approved the settlement under the circumstances.

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