The accusations Brobeck, Phleger & Harrison leveled against its former chairman Tower Snow Jr. and his new firm, Clifford Chance, last week may seem awfully familiar.
That's because Brobeck faced some of the same accusations in an eight-year dispute with the now-defunct Santa Monica, California Firm of Dickson, Carlson & Campillo.
In that case, Brobeck lost the argument that luring away partners and using internal information about a firm did not constitute unfair competition.
But that could actually help Brobeck in its claim that Snow's move to Clifford Chance with a team of partners also constituted unfair competition.
W. Mark Lanier, a Houston lawyer who is representing Brobeck, said his client's losing argument in the Dickson, Carlson case shows that California courts recognize some actions involving partnerships are a breach of fiduciary duty and can be considered unfair competition.
"You have to be careful when you self-deal against the interests of your partners," Lanier said. "Certainly, some of the legal principles are the same, but the conduct at issue in the case is of a magnitude much different."
In the Dickson Carlson litigation, Brobeck was accused of luring two of the smaller firm's top partners and its largest client. Dickson Carlson later disbanded, but its partners sued the two former partners and Brobeck. A jury sided with the Dickson, Carlson partners in May, awarding them $153,688. A Los Angeles County Superior Court judge ruled Sept. 23 that Brobeck's actions constituted unfair competition and that Dickson Carlson could be entitled to more in damages.
Faye E. Hanger, et al. v. Clifford Chance Rogers & Wells, filed Wednesday, names former Brobeck Chairman Snow and London's Clifford Chance, which opened a San Francisco office when it hired a team of Brobeck lawyers in 2002. Aside from unfair competition, the suit also alleges breach of fiduciary duty and interference.
Snow declined to comment, but Clifford Chance issued a formal statement in response to the suit. "We have undertaken an initial review of the allegations in the complaint. The allegations are without merit. We find the notion that Clifford Chance is responsible for the collapse of Brobeck Phleger & Harrison to be absurd," the statement said.
"We believe we acted appropriately in our dealings with Brobeck and with the former Brobeck partners who joined Clifford Chance. We will defend ourselves vigorously against this complaint," the statement continued.
Brobeck's complaint was filed in Alameda County, California, by Oakland's Kazan, McClain, Edises, Abrams, Fernandez, Lyons & Farrise. The partner on the matter, David McClain, refused repeated requests for comment.
Lanier said he chose to pursue the case in Oakland instead of San Francisco, where Brobeck was based, because it was convenient for him and his local counsel.
The complaint, however, made mention of meetings held at the Alameda County home of James Burns Jr., a former Brobeck partner who followed Snow to Clifford Chance. Lanier said he believes Burns, Snow and possibly others made decisions at Burns' home that they were key to Brobeck's troubles. The firm shuttered in January because of heaping debt and heavy partner departures.
The suit accuses Snow of triggering Brobeck's demise by shipping the firm's securities litigation group to Clifford Chance while he was still a partner. The complaint refers to e-mail exchanges between Snow and partner Michael Torpey about a Clifford Chance request for billing and compensation information on the securities litigation group. Torpey followed Snow to Clifford Chance.
The complaint also suggests that Snow, Burns and other partners made trips to London for talks with Clifford Chance partners and billed them to Brobeck.
In addition to Brobeck, the plaintiffs include the trustees of Brobeck, Phleger & Harrison's claim liquidation trust, six longtime employees of the firm and 10 retired partners who lost their retirement benefits when the firm collapsed.
Lanier said he took the case on contingency. The plaintiffs are seeking at least $100 million in actual damages and unspecified punitive damages. Lanier said he worked with the plaintiffs for about three months to prepare the suit and said the timing was determined by due diligence.
Paul Murphy, who represented the Dickson Carlson partners, said he suspects the plaintiffs waited for an outcome in the dispute with his clients.
"Absolutely there are similarities, but Brobeck can't have it both ways," Murphy said. "That is probably one of the reasons why they may have wanted to wait until after the ruling comes out in our case."
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