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September|October 2004
Making The Partner By Justin Dillon
Above It All By Amy Sullivan
Peter Ambrose, Bladder Cop By Ben Goldstein
The Beagle Brigade By Will Potter
The Prudent Jurist By William H. Simon
Cases & Controversies

The Prudent Jurist

By William H. Simon

The artist Jeff Koons won custody of his son in 1994, but his Italian ex-wife took the boy to Rome. The law firm of Paul, Weiss, Rifkind, Wharton & Garrison billed Koons more than $4 million for helping him regain his son. He paid half, and then sued the firm for charging too much. What constitutes excessive billing?

IN MANY MARKETS, A LAWFUL FEE is whatever the buyer agrees to pay. A lawyer's fee, however, must be "reasonable," or a client doesn't have to pay it.

When the client is sophisticated, or knowledgeable about the law, judges tend to assume that any agreed-upon fee is reasonable. But there are limits. An eye-popping recent example is the suit by two firms that represented Massachusetts in litigation against the tobacco companies. The state had agreed to pay the firms 25 percent of whatever the state recovered against the companies. To everyone's surprise, 25 percent turned out to be $2 billion. After the tobacco companies paid the firms $775 million in accordance with the settlement, the firms sued their client for the remaining $1.2 billion. They argued that when the client is as sophisticated as a state government, an agreed-upon fee is the same as a reasonable fee. The Massachusetts courts rejected this argument.

Though Koons would be considered a less sophisticated client than the Commonwealth of Massachusetts, the New York court was justified in dismissing Koons's suit. Two factors made Koons's challenge less attractive than Massachusetts'. First, $4 million or so did not seem to be, on its face, a shockingly large amount for litigation that had spanned six years and had involved two aggressively contested suits, as well as difficult enforcement proceedings in both the United States and Italy.

Second, before Paul, Weiss finished its work, and when a substantial amount was unpaid, Koons signed a formal stipulation indicating that he had no objections to the fee. He didn't raise the claim of unreasonableness until two years later.  Waiting until he didn't need Paul, Weiss anymore seemed unfair and suggested opportunism.

Laura Blackburne, a judge who presides over a drug court in New York City, helped a suspect elude arrest in her courtroom. Knowing that a detective waited in the hallway, she ordered the suspect to leave the court by a side door. The police called for Blackburne's removal from the bench and for a criminal investigation into her actions. She was transferred to civil court. Were her actions defensible?

JUDGE BLACKBURNE'S CONDUCT WAS PUZZLING. Her defenders said first that the officer had no warrant for the suspect's arrest, and second that the officer had lied to the court about his intention to arrest the defendant, claiming that he was seeking only to question the 23-year-old man. However, police officers in New York are authorized to make warrantless arrests on felony charges. And while a policeman should never lie to court officers, the appropriate remedy would be to reprimand him or complain to his superiors.

The press has suggested that some of Blackburne's prior decisions show animosity toward the police. But another possible explanation is suggested by the fact that the judge was then presiding over drug court, and the defendant was appearing for a progress report on his recovery. Drug court is an unusual tribunal, one in which the goal is collaborative rehabilitation rather than punishment. When defendants cooperate, court personnel tend to root for them and sympathize with their struggles. Blackburne made a bad decision, but if she was motivated by the sympathy that drug court encourages in judges, maybe she deserves another chance.

Maryland State Senator John Giannetti sponsored legislation to limit the regulation of cell phone towers. He revealed that his clients include companies like Sprint and Verizon, which would benefit from the law. Maryland law allows legislators to sponsor bills that could help them, as long as the laws also benefit a large population with no connection to the legislator. Still, the ethics panel warned the senator that his involvement could be a conflict of interest. Was Giannetti within legal bounds as a sponsor of that law?

CONFLICT-OF-INTEREST RULES HAVE TO BE MORE FLEXIBLE FOR LEGISLATORS than they are for judges or lawyers. The consequence of disqualifying a judge or lawyer is that a new one is assigned or retained. But when a legislator is disqualified, his constituents are temporarily stripped of representation. In addition, the Maryland legislature convenes only 90 days a year, and senators are paid only around $35,000. Most senators need a second job, and the most popular second job for state legislators is lawyering.

Still, Senator Giannetti went too far, and the ethics panel was right to call him on it. The bill did not involve an issue in which his constituents could expect any special benefits. And the senator was not just planning to vote on the matter, but to sponsor it. If the bill was in the state's interests, there should have been many impartial legislators to sponsor it. For Giannetti to do so was unseemly.

William H. Simon teaches professional responsibility at Columbia Law School.

Questions for the Prudent Jurist can be sent to prudentjurist@legalaffairs.org.

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