United States District Court, N.D. California
ORDER TO SHOW CAUSE RE: REFERRAL TO CALIFORNIA STATE
BAR AND NOTIFICATION IN PENDING ACTIONS
GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE
19, 2019, the Court issued an Order Denying Plaintiffs'
Rule 16 Motion. (Dkt. No. 134 [“July 19 Order”].)
In summary, the July 19 Order denied plaintiffs' counsel
Jeremy Friedman's request for an order requiring
attorneys' fees to be either separately negotiated or
determined by the Court in connection with an individual
settlement with the named plaintiffs. The Order noted the
unusual procedural posture of the request and explained the
Court lacked the authority to provide the requested relief.
However, the July 19 Order also outlined the conflict created
by Mr. Friedman's retainer agreement. Thereupon, the
Court stayed the instant action and directed Mr. Friedman to
submit a status statement to address his plan to proceed with
this action on behalf of the named plaintiffs and of the
putative class. (Id.)
Court is in receipt of Mr. Friedman's statement filed in
response to Court's July 19 Order. (Dkt. No. 137
[“Statement”].) The Court finds the Statement
inadequate to address the concerns raised in the order, in
particular because Mr. Friedman ignores much of the substance
“district court generally must control the professional
conduct of attorneys who practice before it.”
Kaiser Steel Corp. v. Frank Coluccio Const. Co., 785
F.2d 656, 658 (9th Cir. 1986). Such concerns take on greater
importance in the context of a putative class action. At the
same time, a court must also avoid “the risk of
interfering with a [named] party's qualified right to
select counsel” of their choosing. Id.
Nevertheless, counsel are “subject to disqualification
if an unwaivable conflict exists. . . .” Great
Lakes Constr., Inc. v. Burman, 186 Cal.App.4th 1347,
1355, (2010) (concurrent representation conflict); see
also Flatt v. Superior Court, 9 Cal.4th 275, 284 (1994)
(“classic case” of a simultaneous conflict of
interest is “an attorney's interests in conflict
with those of the client”).
Mr. Friedman continues to request that the Court pre-approve
his retainer agreement with the plaintiffs (with proposed
modifications) and misapprehends the Court's July 19
Order as mainly being concerned with the multiplier. As
detailed in the Court's July 19 Order, the retainer
agreement is not a standard agreement and attempts to
guarantee for Mr. Friedman a contractual right for payment of
fees in the event that his client agrees to a settlement
which results in an amount of attorneys' fees that Mr.
Friedman deems unsatisfactory.
Court notes that Mr. Friedman previously litigated the
subject of a lump-sum settlement with an attorney fee waiver,
and an ensuing dispute between Mr. Friedman and his clients
regarding payment of attorneys' fees in Hill v.
Kaiser Foundation Health Plan, 2015 WL 5138561,
3:10-cv-2833-LB. The retainer agreements in Hill
apparently were substantially similar to those at issue here.
The Hill court's refusal to award Mr. Friedman
additional attorneys' fees from his former clients was
affirmed by the Ninth Circuit. Berne v. Kaiser Foundation
Health Plan Inc., 719 Fed.Appx. 651 (2018). Moreover, it
appears that the State Bar of California addressed the issue
and similarly concluded that the nature of the agreement
creates an unwaivable conflict. State Bar Standing Committee
on Prof. Responsibility and Conduct Formal Opn. No. 2009-176.
Court finds that it is for the State Bar to determine, in the
first instance, whether an attorney's conduct is in
violation of the Rules of Professional Conduct established by
that body. Thus, for the reasons set forth herein and in the
Court's July 19 Order, Plaintiffs'
Counsel Jeremy Friedman Is Ordered to Show
(1) why this Court should not refer the matter of Counsel
Jeremy Friedman's retainer agreement with plaintiffs
herein to the California State Bar for a determination of
whether the retainer agreement violates the Rules of
Professional Conduct of the State Bar of California or the
California Business and Professions Code by no later than
September 17, 2019; and
(2) why Counsel Jeremy Friedman should not be ordered to
notify the courts in any other pending litigation where his
clients have entered into a similar retainer agreement of
this Order and of the provisions of the retainer agreement
concerning attorney fee assignment and consequences of
compromising statutory attorneys' fees.
written response to this Order to Show Cause shall be filed
no later than September 16, 2019. Failure to
file a response timely shall be deemed a concession that the
referral is appropriate and order stated above should issue.
stay of the instant action previously ordered is maintained.