Texas Law Firm Must Pay Phoenix Firm, Court Says

     SAN FRANCISCO (CN) – A Houston law firm must pay additional fees to Brown & Bain, despite the fact that the Phoenix firm withdrew as counsel from a multimillion-dollar class action accusing Motorola of environmental contamination, the 9th Circuit ruled. more

     About 900 claimants in the Phoenix area joined the class action in 1991. John M. O’Quinn & Associates in Houston took up the representation of most of the plaintiffs in 1993, after the firm that brought the action dissolved. In April of that year, O’Quinn asked for assistance from Brown & Bain in Phoenix. It agreed to pay the Phoenix firm a reduced up-front rate, with additional payments due when the lawsuit settled or ended in trial.
     Under this arrangement, Brown & Bain billed for more than $2.9 million for 26,000 hours of work.
     But in June 1998 Brown & Bain withdrew as counsel, claiming its role had been marginalized. O’Quinn blamed the departure on a decision in an Arizona state court that cast doubt on the whole case.
     Nonetheless, O’Quinn moved forward with the case by enlisting the help of other Phoenix firms and even setting up its own office in Phoenix devoted solely to the case.
     In January 2002 Motorola agreed to pay $26.3 million. O’Quinn charged $13.7 million to its clients and paid them $2.46 million, or about $2,100 each. It kept about $10 million, which was 40 percent of the total settlement. Brown & Bain asked to be paid the additional payments outlined in their agreement, but O’Quinn refused.
     The court held that O’Quinn is bound by the language of the contract to pay Brown & Bain the additional fee, and that Brown & Bain’s withdrawal did not burden the clients.

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