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When Law Firms Collide, Things Sometimes Get Ugly

Feb 12, 2005 | New York Times Sometimes lawyers take on major corporations. Sometimes they battle the government. But this week in state court in New York, lawyers took on each other, and it was not a pretty sight.

"This is starting to sound like an argument in a high school gym," Justice Charles E. Ramos of State Supreme Court in Manhattan said Thursday during arguments in a case between New York law firms.

For more than three years now, the law firm of Parker & Waichman has been fighting in court with the firm Napoli Bern.

The arguments over assorted motions on Thursday were essentially legal trench warfare, as neither side willingly conceded a single point. At times, it was not clear that lawyers for the opposing sides even agreed on what they were fighting about, and certainly neither side was interested in hearing from the other.

"Excuse me, I'm speaking," Barbara E. Olk, a lawyer representing the Parker firm, said at one point in an effort to speak over her adversary. Brian J. Isaac, a lawyer representing Napoli Bern, responded petulantly, "You interrupted me."

There is a serious issue underlying the dispute, which otherwise might simply be the legal equivalent of mud wrestling.

Several years ago, Parker & Waichman and Napoli Bern were friendly. They even had a deal. Parker & Waichman referred cases to Napoli Bern (and maybe also worked on them - that is one of the many issues in dispute) involving people who had taken the diet drug combination fen-phen, which could cause heart valve damage. According to court documents, Napoli Bern, in turn, helped negotiate a settlement with fen-phen's maker, Wyeth.

The terms of the settlement are confidential, but published reports state that over all, Wyeth has paid $13.6 billion to settle fen-phen claims. As a reward for its work, Parker & Waichman received more than $5 million, according to court papers.

More than three years ago, Parker & Waichman sued Napoli Bern, saying that was not enough money - and if the story stopped there, it might seem all too familiar.

But Parker & Waichman has also asserted that Napoli Bern, which according to court documents represented about 5,600 fen-phen clients, favored its direct clients over clients referred from other firms when it distributed money from the settlement with Wyeth (actually, with Wyeth's predecessor, American Home Products).

According to court papers, Parker & Waichman asserted that to reach the settlement, Napoli Bern negotiated a lump-sum payment from Wyeth rather than individual amounts for each claimant and then allocated more money to its own clients.

A lawyer for Wyeth stood up in court Thursday to assert that the company wanted the terms of the settlement itself kept confidential, a view that Justice Ramos appeared to sympathize with. Documents related to the settlement and how it was reached remain under seal, according to other court documents.

If they are disclosed in litigation, they will offer a rare glimpse of how defendant companies settle class-action lawsuits with firms representing thousands of claimants.

Napoli Bern, in turn, has asserted that Parker & Waichman should not be permitted to represent the clients the firm referred to Napoli Bern, a motion that Justice Ramos has denied. Napoli Bern has also said that a disgruntled former employee stole documents from the firm that were related to the fen-phen case and turned them over to Parker & Waichman, an accusation that has not yet been dealt with by the court.

During Thursday's proceedings, Justice Ramos denied various motions and instructed all the assembled lawyers on sharing evidence - something each side accused the other of refusing to do. He also admonished them not to bother him with such administrative matters.

"If I see any more disputes like this," he said, "where you are essentially stonewalling one another for a ridiculous reason, both ways, then I will appoint a referee and you are going to be, you know, spending days and days and months and months sitting in his or her office trying to convince that person."

The brawling law firms provide a cautionary tale, too, for lawyers considering suing other lawyers.

"When lawyers fight each other, it can become a matter where personal vindication becomes more important," said Anthony E. Davis, a lawyer at Hinshaw & Culbertson who often represents law firms. "The kind of dispute that you're describing, although it has a lot of other elements, is not that different from law firm breakup and partnership disputes. Those cases can become more vicious than regular divorce cases," he continued.

"Some lawyers have more of their individual personas, their psyches, more of themselves, invested in their professional lives than in their personal lives."

Mr. Davis said law firm fee disputes are not common, but not that unusual, especially when large amounts of money are at stake. It is too early to evaluate this quarrel though, he added. "This is just the beginning."

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