Rose speaks – Celebrity and High Profile Trials

This article is done because Raven found the papers and Susieq called and begged to have it explain. Thank you both ladies for what you brought to this article

“The case is not without interest for the professional responsibility of lawyers inter se”, the ruling of the 9th Circuit Court’s decision of March 6, 2008 begins.

In 1991, approximately NINE hundred claimants in the Phoenix area joined a class action suit against Motorola for damages in excess of $100 MILLION.

In 1993, John O’Quinn took over the representation of MOST of the claimants. In contracts signed with EACH of the approximately 900 petitioners, John O’Quinn insisted on a “contingent fee of 40% of the total sums or fair market value of property collected or received from trial or settlement of Client’s claims.”

Each client would receive 60%; WOW John O’Quinn is one of the good guys, although he “ponders” why Howard K. Stern and his firm would get 6% of money recovered for over 10 years of litigation in the Anna Nicole Smith vs. Marshall Estate. Does he think Howard K. Stern, Ron Rale and the firm worked for way too little money? If so why, the constant drum beat that Howard K. Stern is only ABOUT the money?

But wait there is more, that 60% that John O’Quinn’s clients were promised in signed contracts did not include the costs of expenses of litigation that would come out of the 900 clients 60%, but still sounds fair right? Each client agreed that “ALL COSTS AND EXPENSES OF LITIGATION HAVE PAID OR INCURRRED” would be paid out of the clients 60% recovery. Still a good deal, right? I mean, how much could the cost equate out to each client with that large of a sum? The clients even knew up front in detail what the “costs would entail and it would be LIMITED to depositions, expert witness and consultant fees, meals, lodging, storage, rentals, equipment, and other expenses reasonably necessary to the prosecution of the claims other than the salaries and normal office overhead of the Attorneys”.

On April 16, 1993, John O’Quinn engaged another law firm to “help” with the litigation and contracted with them for a reduced fee for services. However, there was a promise that at the conclusion of the trial or a settlement to up the payment to secure that the other law firm got a fair shake on its fees. The math gets a tad confusing but you can each read it with calculator in hand by downloading the 9th Court Decision in our Misc. section of downloads open to ALL visitors not just our members.

John O’Quinn very fairly paid the other firm, Brown & Bain a total of $2,920,975.17 for 26,000 hours of work.

Just a tad short of five years later, June 1998, John O’Quinn and Brown & Bain parted ways, with no objections from John O’Quinn or any of the almost 900 plaintiffs. Nice to part friends, but wait, two of the former partners of Brown & Bain had formed a new law firm of Allen & Price and had put a bid and secured the contract with John O’Quinn for a much more reduced rate than the original Brown & Bain had agreed to be paid for their work, as early as March 1996. So we overlapped right, no problem among “friends/lawyers”?

To be on the safe side for his clients, John O’Quinn opened an office in Phoenix devoted wholly to the needs of this suit and his 900 clients and “internal settlement sheet” states that salaries in Phoenix was $4,583,523.41 and office expenses were $2,954,812.64.

In January 2002, John O’Quinn reached an out of court settlement with Motorola for $26,301,921.39, a tad shy of the $100 million sued for, but that is what out of court settlements are about is keeping the costs down so clients get the best deal without the trauma of a trial in usual circumstances.

Out of this $26+ million settlement, John O’Quinn charged his clients $13,727,597.66 for expenses. It was a tad over half of the settlement but let’s face it, it was almost 9 years worth of work in two states and involved three law firms for just the plaintiffs.

$12,574,323.73 left out of the settlement for John O’Quinn to take his 40%. However, John O’Quinn charged his clients roughly 40% contingent fee for $10,106.988.61 from the original settlement of the $26+ million, leaving his 900 clients to divide up $2,467,335.12 or that would be about $2,741.00 a piece, however some how it ended up about $2,100 that each client received. By the way, here nothing to do with this court decision but what is with all of the added cents in each of these figures, why not just round it off to the nearest dollar. What is that, 12 cents or 61 cents about? As Ken pointed out to me, those 12 or 61 cents multiplied by number of clients in a class action suit can become significant.

The funny thing is that Brown and Bain wanted to be paid the remainder of their fee owed by John O’Quinn for the services they performed during the lawsuit. Protecting his clients John O’Quinn refused.

Thus Brown and Bain sued John O’Quinn who countersued Brown and Bain, moved it from state court to federal court and when John O’Quinn lost appealed to the 9th court in San Francisco, the court that just also has the Anna Nicole Smith vs. Marshall Estate law suits. Those three judges must cringe when they see any of these names on the cases being heard by them.

The 9th Circuit Appellant court decided to use the statutes that most favored John O’Quinn, stating; “We review de novo, viewing the evidence in the light most favorable to O’Quinn” very fair, right? John O’Quinn went so far as to absorb some of the billable expenses to his clients himself in order “to have a little more money” for his clients. John O’Quinn had absorbed the expenses in order to save something to give the clients, and even with this generosity on John O’Quinn’s part, the individual client waiting for nine long years “averaged only $2,100 a piece”.

The 9th Circuit notes it was prudent of John O’Quinn to give his clients something because they might not have agreed to ANY settlement if they had gotten NOTHING.
The court goes on to say that, John O’Quinn’s “alleged loss is actually unproved”. In fact the 9th circuit court does math and comes up with O’Quinn “does not established a loss, in fact if you dwindle down the “total expenses” of $13.3 million charged to his clients, you end up with less than $3 million in “actual expenses” incurred by John O’Quinn. Note here that even though the 9th Circuit stated that in it’s ruling the clients did not get any more money, in fact the clients are out of this fight, now it is lawyer against lawyer for the spoils of the settlement.

The 9th Circuit affirmed the two lower courts decisions and said John O’Quinn had to pay the money he owed per his contract with Brown and Bain.

So we have another 900 clients with pocket money, John O’Quinn with the Bat Mobile and the Pope Mobile, 3,000 clients still crying in Texas waiting for their money as John O’Quinn appeals that decision and as sad as all of this is, there is something much sadder in this. We have 3,900 clients that ended up with almost nothing, yet as tax payers they with all of us paid for the courts to adjudicate the fight between lawyers over who gets the most of that original $26+ million Motorola made an out of court settlement for.

After this latest lost John O’Quinn’s lawyer, Neil McCabe has stated, “the firm is considering a request for en banc review by the court”.

“Ultimately, Motorola agreed to pay $26.3 million to settle the case in 2002. O’Quinn treated $13.7 million as costs chargeable to clients and also $10.1 million as the 40 percent contingency fee. Clients recovered approximately $2.5 million, or roughly $2,100 apiece, according to the court.” As part of its educational outreach, the 9th Circuit set the case as one of several argued at the University of California’s Boalt Hall School of Law in February. A fee fight between lawyers, what fun to put before law students, said McCabe.”

Yeppers, John O’Quinn left clients once again Crying as Roy Orbinson so aptly wrote and even the rest of us as observers have paid for this “love fest of fighting over settlement money by high power lawyers”, with our tax dollars. As the Bay Area Citizens Against Lawsuit Abuse (BACALA) wants us to swallow hook , line , and sinker, with the stats of, “Texas alone each year as tax payers we pay $800 per person for this type of litigation” This of course leaves us all asking when added to the national cost we wonder what that comes to? Is it time to continue to cry, or to join and reform “tort cases”?

As fees from lawyers, I would say yes! However, perhaps no, with Tort Reform in Texas, we went from the bottom three states in the cost of tort cases to business to the number one in the nation as savings in tort cases to businesses. Wow on the surface amending our constitution with Proposition 12 in 2004, we WON, but not really, our cost as taxpayers are the same, the only difference is now big business wins more of their suits over the small guy defendant. Does this mean the rich gets richer and the rest of us are left “Crying”?

Per the site Common Dreams Org., “There are, of course, plenty of things wrong with the civil justice system. It has high “transaction” costs, meaning money that should go to victims is eaten up by lawyers and others, but worst of all, it is haphazard.”

Do I like what John O’Quinn does to his clients? No, but for the disenfranchised that can no longer sue in Texas because of tort reform, it appears to me in correcting a situation, we threw the baby out with the bath water. When are we going to learn “moderation in all things”? We have the architect as he is called Karl Rove to thank for businesses getting richer and the small guy getting fucked.

I bet you all thought I was going to slam John O’Quinn in this article, right?

©Rose Turner
March 11, 2008
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This entry was posted on Tuesday, March 11th, 2008 at 2:33 pm and is filed under All Things Anna Nicole Smith, Anna Nicole Smith's Will, John O'Quinn, Neil McCabe. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.