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Joseph Saveri Law Firm, Inc. v. Criden

United States District Court, N.D. California

March 9, 2015

JOSEPH SAVERI LAW FIRM, INC., et al., Plaintiffs,
MICHAEL E. CRIDEN, P.A., Defendant.


ELIZABETH D. LAPORTE, Magistrate Judge.

On January 6, 2015, Plaintiffs and Counter-Defendants Joseph Saveri and Joseph Saveri Law Firm, Inc. ("Plaintiffs") filed this motion for summary judgment. For the reasons set forth below, the Court GRANTS Plaintiffs' motion.


Plaintiff Joseph Saveri ("Plaintiff Saveri") is a former partner at Lieff Cabraser Heimann & Bernstein, LLP ("Lieff Cabraser"). (Saveri Decl. ¶ 1.) In June 2012, Plaintiff Saveri left Lieff Cabraser and founded Plaintiff Joseph Saveri Law Firm, Inc. ("Plaintiff Saveri Law Firm"). (Id. ¶ 9.)

In February 2010, while Plaintiff Saveri was still a partner at Lieff Cabraser, that firm entered into a referral agreement with Defendant and Counterclaimant Michael E. Criden, P.A. d/b/a Criden & Love, P.A. ("Defendant Criden" or "Defendant"), a Florida law firm. Through that agreement, Defendant Criden referred a client, Isaac Industries, Inc. ("Isaac Industries"), to Lieff Crabraser so that it could represent Isaac Industries in In re Titanium Antitrust Litigation, No. 10-cv-318 (D. Md.) ("TiO2 litigation"). In exchange, Lieff Cabraser agreed to pay Defendant a referral fee of 12.5 percent of any fees it received in the TiO2 litigation. (Love Decl. Ex. B.; Saveri Decl. ¶ 3.) The agreement states that:

[Lieff Cabraser] agrees to pay [Defendant] a referral fee of 12.5% (Twelve and One Half Percent) of its fees, including any multiples on hours that it receives in this matter ("Total Fees"). Total fees does not include any monies received for reimbursement of expenses. Lieff Cabraser agrees to pay the referral fee to [Defendant] even if Lieff Cabraser later procures another client in this matter. If Lieff Cabraser receives significantly less than its lodestar in the case, [Defendant] agrees to discuss in good faith a reasonable accommodation to the amount of the referral fee.
Both law firms agree that all disputes related to or arising from this referral agreement shall be resolved by arbitration conducted by the American Arbitration Association ("AAA").

(Love Decl. Ex. B.) Although Mr. Fastiff of Lieff Cabraser communicated acceptance of the agreement to Defendant Criden on behalf of the firm, Plaintiff Saveri was aware of the arrangement. (Love Decl. Ex. G.)

On February 12, 2010, Isaac Industries filed a complaint alleging a conspiracy to fix prices of titanium dioxide in the United States District Court for the District of Maryland. (Love Decl. ¶ 10.) That case was subsequently consolidated with a similar case, brought by Haley Paint Company, into the TiO2 litigation. (Saveri Decl. ¶ 7.) Plaintiff Saveri was admitted pro hac vice in the TiO2 litigation on behalf of Haley Paint Company and Isaac Industries. (See Saveri Decl. ¶ 7, Ex. 4.) On April 1, 2011, Lieff Cabraser and Gold Bennett Cera & Sidener, LLP ("Gold Bennett") were appointed as co-lead counsel. (Love Decl. ¶ 12.) On July 29, 2011, the TiO2 court granted a stipulation adding East Coast Colorants LLC d/b/a Breen Color Concentrates ("Breen") as a plaintiff. (Saveri Decl. ¶ 9.)

In May 2012, Plaintiff Saveri informed Mr. Love of Defendant Criden that he would be leaving Lieff Cabraser. (Love Decl. ¶¶ 14-15.) According to Mr. Love:

[Plaintiff Saveri] said that he would want to enter appearances on behalf of, you know, clients that I'd given Lieff [Cabraser], and I said sure. And I said, you know, that we would expect you to respect the referral obligation that Lieff [Cabraser] had agreed to.... [Plaintiff Saveri] didn't say yes... but, you know, he didn't say no, what are you talking about or are you crazy.

(Saveri Decl. Ex. B (Love Depo.) at 188-89; see also 5/13/14 Love Decl. ¶ 35 ("In May 2012, Saveri called me to tell me that he was leaving Lieff Cabraser to start his own law firm, and wanted to know whether Saveri, at his new law firm, could continue to represent Isaac Industries in the TIO2 litigation, and another C&L client in a different litigation. I responded that C&L was fine with him making his appearances so long as his new firm paid C&L the same referral fee that Lieff Cabraser agreed to in those cases."); 1/20/15 Love Decl. ¶¶ 15-16 ("Saveri told me that he was leaving Lieff Cabraser to start a new law firm and that he intended to file a motion to appoint himself as a third lead counsel in the TIO2 Action representing Isaac Industries. I then told Saveri that if he moved to become the third lead counsel while representing Isaac Industries, [Defendant Criden] would expect Saveri to pay [Defendant Criden] a 12.5% referral fee.")[1].) Plaintiff Saveri testified that he told Mr. Love that:

I intended to continue to operate at the highest level of the case to continue to work as lead counsel.... [Mr. Love said] I expect or I want you to pay the 12 and a half percent referral obligation.... I said that I wanted to continue to - to do as I had in the past with the structure that we had. So I - I don't recall specifically saying I want to represent Isaac Industries.... [W]e had a leadership structure that prior to my - when I was at Lieff Cabraser, it was a co-lead structure with Gold Bennett as one lead, Lieff Cabraser, me as the other, Shapiro Sher as a liaison counsel.... That was the team that had been working on the case, and I wanted to continue that in the future.

(Supp. Love Decl Ex. B (Saveri Depo.) at 148-51; see also Saveri Decl. ¶ 12 ("At the time, I did not agree that the Joseph Saveri Law Firm or I would pay a referral fee or be bound - or intended to be bound - by Lieff Cabraser's agreement with Criden with respect to the referral of Isaac Industries.").)

On June 1, 2012, Plaintiff entered an appearance in the TiO2 litigation on behalf of Breen. (Saveri Decl. ¶ 9, Ex. 4.) Defendant Criden did not represent Breen and did not refer Breen as a client to either Plaintiff Saveri Law Firm or Hines Mills & Olson, the other law firm that represented Breen in the TiO2 litigation. (Saveri Decl. ¶ 9.) Although this notice of appearance was docketed on ECF, Defendant Criden states that it did not review the document when it received notice of its filing. (Love Decl. ¶ 20.)

Plaintiff Saveri did not withdraw his appearance on behalf of Isaac Industries (Love Decl. ¶ 23), and did not specifically inform Isaac Industries that he was departing from Lieff Cabraser. Rather, he "filed a notice... that [he] had opened [his] own firm and was appearing on behalf of a separate client." (Supp. Love Decl. Ex. B. (Saveri Depo.) at 168-169.) After June 1, 2012, Plaintiff Saveri never appeared specifically on behalf of Isaac Industries and Plaintiff Saveri Law Firm never entered into a fee agreement with Isaac Industries. (Saveri Decl. ¶¶ 10-11.) Similarly, after June 1, 2012, Plaintiffs never advised or reported to Isaac Industries as counsel, and never received instructions from Isaac Industries as a client. (Id. ¶ 13.) However, a June 29, 2012 pro hac vice application in the TiO2 litigation for Kevin Rayhill of Plaintiff Saveri Law Firm lists Mr. Rayhill "as counsel for Plaintiffs Haley Paint Company, Isaac Industries, Inc., and [Breen], " and a July 25, 2012 pro hac vice application for Lisa J. Leebove of Plaintiff Saveri Law Firm lists Ms. Leebove as counsel for "Plaintiffs." (Supp. Love Decl. Exs. J, K (emphasis added).)

On August 7, 2012, Plaintiff Saveri Law Firm was added as co-lead class counsel in the TiO2 litigation. (Saveri Decl. Ex. 6.) The next day, Mr. Love of Defendant Criden ...

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