Firms sue class co-counsel for not carrying his weight

By Pat Murphy
BridgeTower Media Newswires
BOSTON, MA — A nasty dispute has erupted in federal court in Boston over who gets a share of $3.7 million in attorneys’ fees and expenses awarded from a $10 million class-action settlement against Bank of New York Mellon.

Washington, D.C.’s J. Brian McTigue represents the named plaintiff in Henderson v. BNY Mellon, but ultimately failed in his bid to be appointed lead counsel for the class action.

McTigue nonetheless claims he’s entitled to 20 percent of the fee award pursuant to his co-counsel agreement with the two firms that won the knockdown, drag-out fight with him to become lead counsel: the West Virginia law firm Bailey & Glasser and the Derek G. Howard Law Firm in California.

But the Howard and B&G firms have turned the tables, suing McTigue and his firm, McTigue Law, for breaching the co-counsel agreement. The plaintiff firms claim McTigue deserves zilch because he didn’t fulfill his obligations to do 20 percent of the work, and he also sought to “undermine and sabotage” their role as co-lead counsel.

Moreover, the complaint filed Sept. 20 in U.S. District Court alleges that, in the aftermath of the execution of the co-counsel agreement, McTigue persisted in “acrimonious and obstructionist” behavior that at one point drew the ire of Chief Judge Patti B. Saris, who presided in Henderson.

The class plaintiffs in Henderson alleged in their 2015 complaint that BNY Mellon and other defendants breached fiduciary duties in making investment decisions regarding the assets of a Massachusetts trust. The court certified a class of beneficiaries. Although the named plaintiff in the case, Ashby Henderson, was a client of McTigue, the complaint was filed by attorneys from Bailey & Glasser’s Boston office — John J. Roddy and Elizabeth A. Ryan — and California lawyer Derek G. Howard.

According to court records, McTigue and other plaintiffs’ counsel became engaged in a bitter dispute over control of the litigation. In a September 2016 order, Saris denied a motion to appoint McTigue as lead counsel, finding his treatment of co-counsel “deeply disturbing.” For example, the judge noted, McTigue had not cooperated with co-counsel in preparing lead plaintiff Henderson for a deposition.

In denying the motion, Saris wrote that “given Mr. McTigue’s contumacious, uncivil conduct in this litigation, I find that he would not be an effective lead or co-lead class counsel.”

After the judge’s admonishment to play nice, in October 2016 McTigue entered into a co-counsel agreement with Bailey & Glasser and the Howard firm. The agreement set forth the rights and responsibilities of the lawyers for the duration of the suit. While Bailey & Glasser and the Howard firm had been appointed lead co-counsel for the class, Henderson remained McTigue’s client.

The parties in Henderson reached a $10 million settlement in March, three days before trial was scheduled to begin. The class plaintiffs requested, and the court ultimately approved, an award of attorneys’ fees in the amount of $3,333,333 and expenses totaling $404,234.

In August, McTigue filed a motion requesting that Saris order class counsel to pay him 20 percent of the counsel fees and nearly $60,000 in litigation expenses.

Saris denied McTigue’s request in a Sept. 19 order. The order was without prejudice, leaving the door open for McTigue to press his claims for remuneration in a separate breach-of-contract suit against lead plaintiffs’ counsel.

Getting ahead of the game, Bailey & Glasser and the Howard firm filed their own suit against the McTigue defendants the next day.

In addition to claiming that McTigue and his firm didn’t do their share of the work, the plaintiffs alleged McTigue breached the co-counsel agreement by paying nothing toward his share of litigation expenses, which the firms allege include $295,000 in expert witness fees.

Roddy represents his firm in the suit against McTigue and declined to comment on the case. McTigue himself did not respond to a request for comment prior to deadline.

Despite the rancor reflected in the court record, Boston attorney Edwards S. Cheng sees the fee dispute as boiling down to basic contract principles with the wildcard being how to quantify McTigue’s obligation under the agreement to perform 20 percent of the work in the class action.

“When you read the complaint, it sounds like one counsel complaining about the other counsel not doing enough work,” says Cheng, a business and professional liability litigator at Sherin & Lodgen. “The phrase ‘20 percent of the work’ sounds wonderfully objective, but it’s not. And even if the allegations [of contumacious, uncivil conduct] are true, it doesn’t mean the defendant didn’t do 20 percent of the work.”