Plaintiffs Firm Sues for Fees in Celgene $280M Settlement

It’s a fee fight!

In case you missed it, court filings this week show plaintiffs law firm Grant & Eisenhofer is suing their former client and their former co-counsel from a $280 million settlement against pharmaceutical giant Celgene Corporation.

G&E claims it racked up a $7 million tab that has not been paid since the case was settled in July, and that it is entitled to a share of the contingency fee for the recovery effort.  Their original deal would have won the firm anywhere between $28 and $33 million, according to the complaint filed in California federal court.

The dispute comes as a sidebar to a massive whistleblower settlement, which has now devolved into a fight between the lawyers who helped forge it.

First, a little background on the underlying case:

In 2010, G&E filed a complaint against the pharmaceutical company Celgene on behalf of Beverly Brown, one of its former sales managers. According to that complaint, the company pressured Brown and others to promote the drug Thalomid as a treatment for bladder, breast and brain cancer, despite lacking FDA approval for these uses.

As part of its marketing plan, the complaint alleged, Celgene dispatched over 100 “agents,” to hospitals and doctors offices around the country to aggressively push the drugs and their untested results.

Brown claimed that Celgene used a similar tactic when pushing Revlimid, the successor of Thalomid. These two drugs have generated billions of dollars in revenue for Celgene, according to G&E research from the 2010 complaint.

The case was settled for $280 million in July, 2017. Most of the settlement is earmarked for the federal government, 28 states and Washington D.C. The payment is equivalent to about two weeks worth of sales of Revlimid, which generated $6.97 billion in revenue for Celgene last year, according to data compiled by Bloomberg News.

Now here’s where the lawyers come in:

G&E is suing Brown, California firm Bienert, Miller & Katzman, and South Carolina based Richard Harpoolitan on the grounds that those firms and a former G&E director Reuben Guttman, poached Brown as a client after Guttman left the firm. They are suing for breach of contract, intentional interference with contract, quantum meruit and declaratory relief in the U.S. District Court in the Central District of California.

The claims stem from a frayed relationship between the firm and Guttman, who took on the plaintiff Brown as a client in 2009, according to the complaint.

He left the firm in early 2015 and shortly after, Brown replaced the G&E legal team with Guttman and another former lawyer from the firm who later started a firm with Guttman called Guttman, Buschner & Brooks PLLC.

Despite the switch, G&E claims it should be compensated for the work it performed on behalf of Brown in the case.

According to the G&E complaint, whistleblowers typically receive 25 to 30 percent of the settlement. Given the $280 million settlement with Celgene, that means Brown could receive anywhere from $70 to $84 million as a whistleblower “bounty,” some of which will go to her legal team.

According to G&E, their original deal with Brown would have won the firm a 40 percent contingency fee — anywhere between $28 and $33 million.

G&E declined to comment for this article.

Guttman, Bienert, Miller & Katzman and Richard Harpootlian did not respond for a request to comment by the time of publication.

David Wiechert, a lawyer representing Bienert, Miller & Katzman and Richard Harpootlian, responded in a emailed statement.

“The allegations by Grant & Eisenhofer against their former client, and the attorneys who obtained a tremendous result for her, are groundless, and Grant & Eisenhofer should feel ashamed for making them,” he wrote. “My clients Bienert Miller & Katzman & Richard Harpootlian, P.A. are evaluating potential counterclaims against Grant & Eisenhofer as we speak.”

 

Write to the reporter at maxsiegelman@gmail.com.

Write to the editors at gabefriedman@outlook.com and csullivan@bloomberglaw.com.

 

 

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