Counsel Concerns

California Court of Appeal Overturns Revised Award Arbitrator Had Given Lavely & Singer Law Firm

The California Court of Appeal, Second Appellate District, overturned an arbitrator's “revised final award” that gave legal fees to the Los Angeles law firm Lavely & Singer for its work in arbitrating a dispute brought against it by client Jeffrey Cooper. Cooper v. Lavely & Singer Professional Corporation, B251508.

Cooper had invested $250,000 in Hopeful Monster Inc. (HMI) but later hired Lavely & Singer to pursue fraud allegations against the entertainment production company. After an arbitrator in the Hopeful Monster dispute ruled in favor of HMI, Cooper accused Lavely & Singer of breach of contract, breach of fiduciary duty and professional negligence. Those claims went to arbitration per the law firm's retainer agreement with Cooper. The arbitrator then found in favor of Lavely & Singer, which represented itself in the arbitration against Cooper, but denied the firm's motion for legal fees as its own arbitration counsel. However, the arbitrator later revised his decision by awarding Lavely & Singer $225,677 for fighting Cooper. The Los Angeles Superior Court confirmed the award.

Reversing and remanding, the court of appeal noted that, “after the arbitrator has issued an award (or multiple incremental awards) resolving all submitted issues, section 1284 [of the California Arbitration Act] narrowly circumscribes the arbitrator's power to correct the stated resolution of those issues.” The court of appeal emphasized: “The key issue before us is whether the parties, by agreeing to be governed by JAMS [alternative dispute resolution service] rules, expanded the scope of the arbitrator's ability to modify a final award beyond that granted by section 1284.”

The court of appeal concluded: “To hold that arbitrators so empowered may disregard section 1284 whenever they believe it equitable and just to do so would amount to abrogating that provision in the typical arbitration.”

' Stan Soocher

College Athletes' Lawyers Seek $50 Million for Suit over Use of Players' Personas

Plaintiffs' lawyers who scored licensing rights for college athletes at trial this summer want $50 million for their role in what they call “trailblazing litigation” that ended in a “landmark victory.” The team led by Michael Hausfeld of Washington, DC's Hausfeld asked the court in October for $45 million in fees and $5.3 million in costs. The plaintiffs' lawyers secured injunctive relief for athletes this August in O'Bannon v. National Collegiate Athletic Association (NCAA), 7 F.Supp.3d 955 (N.D. Calif. 2014), following a widely publicized, three-week bench trial in the Northern District of California.

“The result is superlative: a ground-breaking permanent injunction that finally prohibits suppression of competition for college athletes through the sharing of revenue obtained through the use of their names, images, and likenesses,” the Hausfeld lawyers wrote. “Along the way, plaintiffs exposed the inequities of college athletics, including the ' machinations of one of America's oldest cartels.”

U.S. District Judge Claudia Wilken in Oakland, CA, ruled the NCAA must allow colleges to pay athletes up to $5,000 a year in licensing revenue from television and video-game contracts. She also ordered the NCAA to increase men's football and basketball scholarships by about $3,000 a year, enough to cover the full cost of attending school. Wilken denied the athletes' request to earn endorsement money during their college careers.

NCAA lawyers, including partners from Munger, Tolles & Olson and Shiff Hardin, have appealed the ruling to the U.S. Court of Appeals for the Ninth Circuit and are scheduled to file their opening brief in January.

The plaintiffs' lawyers' motion does not include attorney time or expenses associated with the mediation of claims against Electronic Arts Inc. and Collegiate Licensing Company, which settled last year before trial. Those fees and costs will come in a future motion.

The NCAA declined to comment on the proposed fees.

The plaintiffs' lawyers say the trial verdict, which they estimate could net athletes tens of millions of dollars each season, was not easy to come by. It took five years of “painstaking litigation,” they argue, comprised of 10 motions to dismiss, 76 depositions, discovery feuds, extensive summary-judgment filings, and more than a year of class-certification briefing and proceedings. “The complexities of, and risks associated with, this litigation defy comparison to most other contingent antitrust matters in recent history,” the Hausfeld team claims.

They calculated their fee request based on lawyers' hourly rates ranging from $175 for junior associates to $985 for senior partners. Hausfeld lawyers also supervised and coordinated with 31 other plaintiffs' law firms, deploying, they wrote, a “staggering investment of resources.”

' Marisa Kendall, The Recorder

New York Firm Wins Fee Dispute over “Buck Rogers” Representation

The New York Appellate Division, First Department, granted summary judgment for the law firm Fross, Zelnick, Lehrman & Zissu in the attorneys' suit for legal fees from the rightsholder to “Buck Rogers” trademarks and copyrights. Fross, Zelnick, Lehrman & Zissu, P.C. v. Geer, 13061.

Fross Zelnick had represented The Dille Family Trust in fighting a challenge by the heirs of Buck Rogers creator Philip Nowlan to cancel the Trust's trademarks. The appellate division found: “Contrary to the [lower] court's conclusion, there was a valid fee agreement between plaintiff and the Trust. The better practice would have been to send the engagement letter to the trustee [Louise Geer], rather than only to the [Trust] beneficiaries. However, the record, including email exchanges between the trustee and plaintiff, shows that the trustee was well aware of and approved of the beneficiaries' authority to act on the Trust's behalf with regard to plaintiff's retainer and representation ' It is irrelevant that the original engagement letter was not signed by the client ( see , 22 NYCRR 1215.1[a]).” (One fee invoice, from August 2009 that the Trust responded to by sending Fross Zelnick a timely written objection, remains in dispute.)

The appellate court ruled on the Trust's malpractice counterclaim: “[A]ssuming that plaintiff's conduct, in failing to complete a chain-of-title report or failing to resolve the underlying intellectual property disputes before withdrawing, amounts to negligence, the Trust failed to demonstrate causation. The Trust failed to show how it would have successfully opposed the underlying trademark cancellation proceeding, or would otherwise have protected its intellectual property rights, but for plaintiff's omissions.” The appellate division added that “the resulting inability [of the Trust] to efficiently market the trademarks is too speculative to constitute the 'actual ascertainable damages' required to support the malpractice counterclaim.”

' Stan Soocher

Suit Against Atlanta Lawyer over Lil Wayne Concert Scam Is Settled

A confidential settlement shortly before a damages trial ended a dispute between a would-be investor and the lawyer who unwittingly forked over $210,000 of the financier's money to fraudsters pretending to represent rapper Lil Wayne. “All I can say is that my client is satisfied and appreciative of the outcome,” said Evans, Scholz, Williams & Warnke partner Rickman Brown, who represented the would-be investor, Ohio public relations executive Kimberly Blackwell, who sued Atlanta entertainment lawyer Venkatesh “Vinny” Kumar over the transaction.

The missing money was part of $400,000 that Blackwell had wired to Kumar in 2011 to fund two concerts by the rap star Lil Wayne. Instead, Kumar allegedly disbursed more than half the money to “unauthorized persons” including an apparently fictitious Maryland attorney.

Blackwell sued Kumar and his firm, Keniley Kumar, last year. Blackwell v. Kumar, 2013CV234805. Rush Smith Jr. of Hall Booth Smith, who defended the case with firm partner Karl Braun, said the defense would have no comment on the settlement.

Earlier this year, Georgia's Fulton County Superior Court Judge Robert McBurney declared the defendants in default after they failed to respond to the complaint on time. The judge later declined to open the default. The recent settlement was reached three days before a damages-only trial was set to begin.

According to court filings, the case began in mid-2011 when Blackwell was approached by Ernest Foxx, the president of rap collective Black Mob Group, for which Kumar once served as general manager, about an opportunity to invest in two shows featuring Lil Wayne, the New Orleans-born rapper whose real name is Dwayne Michael Carter Jr.

Shortly after Lil Wayne had emerged from New York's Rikers Island prison the year before, where he served eight months on weapons charges, promoters had begun getting calls from people pretending to be Lil Wayne's manager, Cortez Bryant, and another Bryant Management Group officer soliciting advance booking fees for a tour by the rapper.

According to the complaint Blackwell subsequently filed, she was told Kumar had been retained by Foxx and Black Mob Group to act as escrow agent for the transaction. She then wired Kumar $400,000 in September 2011, her complaint said, after securing a binder agreement mandating that the money remain in his escrow account until Black Mob Group or Bryant Management confirmed the dates of the shows. If they had not been confirmed within 10 days, the money was to be refunded.

According to the binder's terms, once written confirmation was received, Kumar was to disburse $157,000 to entertainment giant Live Nation, Bryant Management and Black Mob Group. Another $42,500 was to be disbursed to Nicole Martin, an officer with a company representing Blackwell's interests. The shows never happened, and in October Blackwell sent Kumar a letter demanding a refund.

Blackwell's complaint claimed that the following month Kumar responded not by returning her deposit but by notifying her that he had transferred a total of $275,000 from his escrow account, including $235,000 to “Empire International Financial Group.” Subsequently, the complaint alleged, Kumar confessed that Blackwell's funds had been sent to various unauthorized parties, including Empire, an entity identified as Tyga Music LLC and someone named R. Gillis, Esq. Gillis, the complaint said, was purportedly a Maryland attorney, although no bar record of him could be found in that state or elsewhere.

Foxx filed a fraud complaint on Oct. 21, 2011, indicating that he had deposited $210,000 into accounts held by Tyga, Empire and Gillis. In January 2012, Kumar sent Blackwell a letter saying that his client, Foxx, “was the victim of a potential fraud by Bryant Management.” According to the one-count breach of fiduciary duty complaint Blackwell filed against Kumar and his firm, she was refunded $125,000 of her investment.

Karl Braun entered an appearance as counsel for the defendants a month after Blackwell filed suit and she agreed to an extension for the filing of response pleadings. Braun later claimed that he had been led to believe, in conversation with Rickman Brown, that another extension of time would be allowed.

Brown denied any such understanding had been reached and filed for a motion for default judgment against Kumar and his firm, which Judge McBurney granted. The defense sought to open the default, but McBurney ruled against the defense both on the merits of the case and because the defendants had missed the deadline to respond to the complaint by a wide margin.

Prior to the settlement, Blackwell had sought $210,000 in liquidated damages, plus attorney fees and punitive damages.

' Greg Land, The Daily Report

California Court of Appeal Overturns Revised Award Arbitrator Had Given Lavely & Singer Law Firm

The California Court of Appeal, Second Appellate District, overturned an arbitrator's “revised final award” that gave legal fees to the Los Angeles law firm Lavely & Singer for its work in arbitrating a dispute brought against it by client Jeffrey Cooper. Cooper v. Lavely & Singer Professional Corporation, B251508.

Cooper had invested $250,000 in Hopeful Monster Inc. (HMI) but later hired Lavely & Singer to pursue fraud allegations against the entertainment production company. After an arbitrator in the Hopeful Monster dispute ruled in favor of HMI, Cooper accused Lavely & Singer of breach of contract, breach of fiduciary duty and professional negligence. Those claims went to arbitration per the law firm's retainer agreement with Cooper. The arbitrator then found in favor of Lavely & Singer, which represented itself in the arbitration against Cooper, but denied the firm's motion for legal fees as its own arbitration counsel. However, the arbitrator later revised his decision by awarding Lavely & Singer $225,677 for fighting Cooper. The Los Angeles Superior Court confirmed the award.

Reversing and remanding, the court of appeal noted that, “after the arbitrator has issued an award (or multiple incremental awards) resolving all submitted issues, section 1284 [of the California Arbitration Act] narrowly circumscribes the arbitrator's power to correct the stated resolution of those issues.” The court of appeal emphasized: “The key issue before us is whether the parties, by agreeing to be governed by JAMS [alternative dispute resolution service] rules, expanded the scope of the arbitrator's ability to modify a final award beyond that granted by section 1284.”

The court of appeal concluded: “To hold that arbitrators so empowered may disregard section 1284 whenever they believe it equitable and just to do so would amount to abrogating that provision in the typical arbitration.”

' Stan Soocher

College Athletes' Lawyers Seek $50 Million for Suit over Use of Players' Personas

Plaintiffs' lawyers who scored licensing rights for college athletes at trial this summer want $50 million for their role in what they call “trailblazing litigation” that ended in a “landmark victory.” The team led by Michael Hausfeld of Washington, DC's Hausfeld asked the court in October for $45 million in fees and $5.3 million in costs. The plaintiffs' lawyers secured injunctive relief for athletes this August in O'Bannon v. National Collegiate Athletic Association (NCAA), 7 F.Supp.3d 955 (N.D. Calif. 2014), following a widely publicized, three-week bench trial in the Northern District of California.

“The result is superlative: a ground-breaking permanent injunction that finally prohibits suppression of competition for college athletes through the sharing of revenue obtained through the use of their names, images, and likenesses,” the Hausfeld lawyers wrote. “Along the way, plaintiffs exposed the inequities of college athletics, including the ' machinations of one of America's oldest cartels.”

U.S. District Judge Claudia Wilken in Oakland, CA, ruled the NCAA must allow colleges to pay athletes up to $5,000 a year in licensing revenue from television and video-game contracts. She also ordered the NCAA to increase men's football and basketball scholarships by about $3,000 a year, enough to cover the full cost of attending school. Wilken denied the athletes' request to earn endorsement money during their college careers.

NCAA lawyers, including partners from Munger, Tolles & Olson and Shiff Hardin, have appealed the ruling to the U.S. Court of Appeals for the Ninth Circuit and are scheduled to file their opening brief in January.

The plaintiffs' lawyers' motion does not include attorney time or expenses associated with the mediation of claims against Electronic Arts Inc. and Collegiate Licensing Company, which settled last year before trial. Those fees and costs will come in a future motion.

The NCAA declined to comment on the proposed fees.

The plaintiffs' lawyers say the trial verdict, which they estimate could net athletes tens of millions of dollars each season, was not easy to come by. It took five years of “painstaking litigation,” they argue, comprised of 10 motions to dismiss, 76 depositions, discovery feuds, extensive summary-judgment filings, and more than a year of class-certification briefing and proceedings. “The complexities of, and risks associated with, this litigation defy comparison to most other contingent antitrust matters in recent history,” the Hausfeld team claims.

They calculated their fee request based on lawyers' hourly rates ranging from $175 for junior associates to $985 for senior partners. Hausfeld lawyers also supervised and coordinated with 31 other plaintiffs' law firms, deploying, they wrote, a “staggering investment of resources.”

' Marisa Kendall, The Recorder

New York Firm Wins Fee Dispute over “Buck Rogers” Representation

The New York Appellate Division, First Department, granted summary judgment for the law firm Fross, Zelnick, Lehrman & Zissu in the attorneys' suit for legal fees from the rightsholder to “Buck Rogers” trademarks and copyrights. Fross, Zelnick, Lehrman & Zissu, P.C. v. Geer, 13061.

Fross Zelnick had represented The Dille Family Trust in fighting a challenge by the heirs of Buck Rogers creator Philip Nowlan to cancel the Trust's trademarks. The appellate division found: “Contrary to the [lower] court's conclusion, there was a valid fee agreement between plaintiff and the Trust. The better practice would have been to send the engagement letter to the trustee [Louise Geer], rather than only to the [Trust] beneficiaries. However, the record, including email exchanges between the trustee and plaintiff, shows that the trustee was well aware of and approved of the beneficiaries' authority to act on the Trust's behalf with regard to plaintiff's retainer and representation ' It is irrelevant that the original engagement letter was not signed by the client ( see , 22 NYCRR 1215.1[a]).” (One fee invoice, from August 2009 that the Trust responded to by sending Fross Zelnick a timely written objection, remains in dispute.)

The appellate court ruled on the Trust's malpractice counterclaim: “[A]ssuming that plaintiff's conduct, in failing to complete a chain-of-title report or failing to resolve the underlying intellectual property disputes before withdrawing, amounts to negligence, the Trust failed to demonstrate causation. The Trust failed to show how it would have successfully opposed the underlying trademark cancellation proceeding, or would otherwise have protected its intellectual property rights, but for plaintiff's omissions.” The appellate division added that “the resulting inability [of the Trust] to efficiently market the trademarks is too speculative to constitute the 'actual ascertainable damages' required to support the malpractice counterclaim.”

' Stan Soocher

Suit Against Atlanta Lawyer over Lil Wayne Concert Scam Is Settled

A confidential settlement shortly before a damages trial ended a dispute between a would-be investor and the lawyer who unwittingly forked over $210,000 of the financier's money to fraudsters pretending to represent rapper Lil Wayne. “All I can say is that my client is satisfied and appreciative of the outcome,” said Evans, Scholz, Williams & Warnke partner Rickman Brown, who represented the would-be investor, Ohio public relations executive Kimberly Blackwell, who sued Atlanta entertainment lawyer Venkatesh “Vinny” Kumar over the transaction.

The missing money was part of $400,000 that Blackwell had wired to Kumar in 2011 to fund two concerts by the rap star Lil Wayne. Instead, Kumar allegedly disbursed more than half the money to “unauthorized persons” including an apparently fictitious Maryland attorney.

Blackwell sued Kumar and his firm, Keniley Kumar, last year. Blackwell v. Kumar, 2013CV234805. Rush Smith Jr. of Hall Booth Smith, who defended the case with firm partner Karl Braun, said the defense would have no comment on the settlement.

Earlier this year, Georgia's Fulton County Superior Court Judge Robert McBurney declared the defendants in default after they failed to respond to the complaint on time. The judge later declined to open the default. The recent settlement was reached three days before a damages-only trial was set to begin.

According to court filings, the case began in mid-2011 when Blackwell was approached by Ernest Foxx, the president of rap collective Black Mob Group, for which Kumar once served as general manager, about an opportunity to invest in two shows featuring Lil Wayne, the New Orleans-born rapper whose real name is Dwayne Michael Carter Jr.

Shortly after Lil Wayne had emerged from New York's Rikers Island prison the year before, where he served eight months on weapons charges, promoters had begun getting calls from people pretending to be Lil Wayne's manager, Cortez Bryant, and another Bryant Management Group officer soliciting advance booking fees for a tour by the rapper.

According to the complaint Blackwell subsequently filed, she was told Kumar had been retained by Foxx and Black Mob Group to act as escrow agent for the transaction. She then wired Kumar $400,000 in September 2011, her complaint said, after securing a binder agreement mandating that the money remain in his escrow account until Black Mob Group or Bryant Management confirmed the dates of the shows. If they had not been confirmed within 10 days, the money was to be refunded.

According to the binder's terms, once written confirmation was received, Kumar was to disburse $157,000 to entertainment giant Live Nation, Bryant Management and Black Mob Group. Another $42,500 was to be disbursed to Nicole Martin, an officer with a company representing Blackwell's interests. The shows never happened, and in October Blackwell sent Kumar a letter demanding a refund.

Blackwell's complaint claimed that the following month Kumar responded not by returning her deposit but by notifying her that he had transferred a total of $275,000 from his escrow account, including $235,000 to “Empire International Financial Group.” Subsequently, the complaint alleged, Kumar confessed that Blackwell's funds had been sent to various unauthorized parties, including Empire, an entity identified as Tyga Music LLC and someone named R. Gillis, Esq. Gillis, the complaint said, was purportedly a Maryland attorney, although no bar record of him could be found in that state or elsewhere.

Foxx filed a fraud complaint on Oct. 21, 2011, indicating that he had deposited $210,000 into accounts held by Tyga, Empire and Gillis. In January 2012, Kumar sent Blackwell a letter saying that his client, Foxx, “was the victim of a potential fraud by Bryant Management.” According to the one-count breach of fiduciary duty complaint Blackwell filed against Kumar and his firm, she was refunded $125,000 of her investment.

Karl Braun entered an appearance as counsel for the defendants a month after Blackwell filed suit and she agreed to an extension for the filing of response pleadings. Braun later claimed that he had been led to believe, in conversation with Rickman Brown, that another extension of time would be allowed.

Brown denied any such understanding had been reached and filed for a motion for default judgment against Kumar and his firm, which Judge McBurney granted. The defense sought to open the default, but McBurney ruled against the defense both on the merits of the case and because the defendants had missed the deadline to respond to the complaint by a wide margin.

Prior to the settlement, Blackwell had sought $210,000 in liquidated damages, plus attorney fees and punitive damages.

' Greg Land, The Daily Report