Cobell Lawyers’ Fees Dispute Sent to Mediation

 

A federal judge has referred a dispute over millions of dollars of attorneys’ fees related to the $3.4 billion settlement of the Cobell class-action lawsuit to a special magistrate for mediation.

The Cobell lawsuit was filed in 1996 and challenged the federal government’s mismanagement of billions of dollars of funds it held in trust for more than half a million American Indians. Although the suit was settled in 2009, a bitter dispute over divvying up almost $100 million in legal fees lingers on.

The Cobell settlement called for $99.1 million to be paid to all the lawyers involved in the case. The firm of Kilpatrick, Kilpatrick Townsend & Stockton and private practitioner Dennis Gingold, the plaintiffs’ lead lawyers known as the “class counsel, have reportedly been paid $85.3 million although it is not clear how the payment was split between the two parties. None of the attorneys consulted would comment on the payment. The remaining $13.6 million is claimed for legal services rendered by the Native American Rights Fund (NARF), which seeks $8.1 million, and attorney Mark Brown, who seeks $5,517,431.37, according to court documents. But Kilpatrick Townsend and Gingold argue that NARF left the case in 2006 and had a conflict of interest and that Brown abandoned the case in 2007 and therefore they should not get paid. In January 2013 Gingold and lawyers for Kilpatrick Townsend & Stockton filed a motion with the court to release the $13.6 million in escrowed funds to Kilpatrick. It is not clear how they intend to split the $13.6 million if that money is ultimately released to the law firm.

On Monday, March 18, Judge Thomas Hogan of the U.S. District Court for the District of Columbia said the dispute ultimately may have to go to trial for resolution, but in order to spare the expense of a trial, he ordered the dispute to go to a special magistrate in the hope that it will be settled in mediation.

“This case has been pending for a while and needs to be resolved. I’m concerned about whether or not I’ll have to order a trial. … This is an historic case. A lot of good was done for people who deserve it. It’s a shame it’s somewhat degenerated into fighting over lawyers’ fees,” Hogan said.

Gingold and lawyers for Kilpatrick Townsend filed motions with the court in 2011 detailing their objections to paying Brown and NARF. “It is true that Mr. Brown worked on this matter for approximately a third of its length,” the lawyers said. “Ultimately, however, because Mr. Brown abandoned his clients and refused to communicate with Ms. Cobell, plaintiffs terminated his engagement in 2007 – a couple years after he had stopped working on this case. Moreover, while working on the case, he alienated his colleagues and undermined irreparably his relationship with judicial officers, one of whom banned him from further proceedings.”

William Dorris, an attorney representing Kilpatrick Townsend, reiterated those arguments during Monday’s hearing. He said Brown was late in filing his claim with the court and had never submitted the information to the law firm. He said that Elouise Cobell had terminated Brown after he refused to communicate with her. “[Brown] had an ethical obligation to communicate with his client,” Dorris said. He claimed that Brown said, “‘She could have called me.’ That’s repugnant.”

Turning to Brown’s attorney Stephen Larson, a former U.S. District judge currently with the Los Angeles office of the firm Arent Fox, Judge Hogan asked, “Is it your position that he withdrew or was terminated without cause?” No, Larson said, “At some point Mr. Gingold began to freeze out Mr. Brown.” He said that Gingold had asked Brown to join the case and that Brown left his Los Angeles practice and devoted himself to the Cobell litigation for six years. Brown was reasonably seeking fees for the more than 10,000 hours of time he spent on the case,” Larson said.

The question of whether Brown abandoned the case or was forced out or terminated with or without cause is crucial because under Washington, D.C. law, if a lawyer quits or abandons a case he or she is not entitled to payment. Struggling with the question of whether Brown abandoned the case or was terminated with or without cause, Judge Hogan raised the issue of a series of testy e-mails between Brown and Gingold in 2007 that were included in a court filing in February 2011.

In an April 25, 2007, e-mail Gingold responds to an offer by Brown to participate in an upcoming trial with the assertion that Brown had withdrawn for the Cobell case two years earlier and therefore he would recommend to Elouise Cobell to reject his offer. Brown responded a few days later refuting Gingold’s assertion. “Please do not attempt to paper this situation as if I chose to ‘withdraw’ some months or years ago. It is not accurate,” Brown wrote. He goes on to describe how Gingold began to remove his name from pleadings “despite my contributing significant portions to many subsequently filed documents” and excluding him from conference and meetings. On July 10, 2007, Gingold told Brown in an e-mail that his “engagement is terminated.” Subsequent to a telephone conversation, Gingold e-mailed Brown on September 6, 2007, saying, among other things, that funds “paid by defendants to plaintiffs that are attributable to your time” were being held by the Blackfeet Reservation Development Fund and that with his termination, “the Cobell plaintiffs owe no further obligation to you other than, at final judgment, to request an award for your time at an appropriate hourly rate.”

Brown responded September 16, 2007, again refuting Gingold’s assertions. “I didn’t expect you to send a self-serving letter purporting to confirm portions of our conversation that never occurred.” He restated some of the telephone conversation and added, “The balance of your e-mail…is merely a reflection of your hopes and dreams and not a reflection of reality or anything we discussed – and certainly nothing I agreed to. As such, your characterization of ‘facts’ in those portions of your e-mail…is rejected in toto.” At least one exhibit in the filing remains sealed.

In objecting to paying NARF, Dorris argued that NARF lawyers shouldn’t get any fees because they had promised to be paid for its work on an hourly basis from funds contributed by foundations and others, that the nonprofit legal aid organization abandoned the case in 2006 without the consent of the class representatives. And that NARF had a conflict of interest because its lawyers were paid for representing tribes in a separate tribal trust case.

NARF was involved in the Cobell litigation from the beginning. The organization filed a petition with the D.C. federal court last September, asking for $8.1 million for 31,300 hours that its lawyers and legal staff had worked on the case. “These were important hours, especially the thousands of hours NARF contributed during Phase I of the litigation, when the ultimate outcome was most uncertain,” the petition says.

Attorney Richard de Bodo of DLA Piper, representing the NARF, argued at Monday’s hearing that none of Kilpatrick and Gingold’s objections stands up. “All we’re asking is that the people who worked on this case be compensated, nothing more, nothing less,” de Bodo said.

There was never any action to terminate NARF’s participation, De Bodo said. As for abandonment, De Bodo pointed out that Attorney Keith Harper, who worked for NARF on the Cobell case, left NARF in 2006 and joined Kilpatrick Townsend, but NARF continued to participate in the case. “There was no act of abandonment. The shifting of Mr. Harper was not abandonment,” de Bodo said. As for the claim that NARF was paid for its work with grants, de Bodo said, “We offset any grants that we received.  We’re simply seeking fees that were not compensated or offset.” And regarding the work NARF did on behalf of tribal trust interests, “It was different work,” de Bodo said.”The issue of a potential conflict raised in the plaintiffs’ papers was not tested. Nothing established that there was a conflict.

Judge Hogan repeated that he has concerns about the claims. “I’m concerned whether or not we’ll have to order a trial, at least in Mr. Brown’s case to determine termination or abandonment.” As for NARF, Hogan said it is recognized that the legal organization provided services before it took on the tribal clients. He turned the case over to Special Magistrate Alan Kay.

Asked to comment on the case after the hearing, NARF founder and executive director John Echohawk agreed with Judge Hogan that the dispute over legal fees is “unfortunate.” But, he said, “We believe we should be compensated for the work we did.”

Dorris told Indian Country Today Media Network that Kilpatrick Townsend “appreciate[s] Judge Hogan arranging for the mediation and look[s] forward to participating in it to hopefully resolve these matters.

Attorney Robert C. O’Brien, who represents Brown in the action, said in an e-mail, "Mr. Brown remains proud that he was able to contribute to this important case for Native Americans but given that this matter is currently under consideration by Judge Hogan and has been referred to Judge Kay for mediation, he respectfully declines to comment on the proceedings at this time.”

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Cobell Lawyers' Fees Dispute Sent to Mediation

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