782 F.3d 46
1st Cir.2015Background
- In 2008 Orlando Alejandro-Ortiz, Sonia Rodríguez-Jimenez and their children sued PREPA and insurer for electrical-shock injuries, and retained Matthews & Fullmer to represent them.
- Matthews & Fullmer entered a joint venture with Efron on March 30, 2010, providing that Efron would perform local counsel duties in exchange for 20 percent of fees.
- In 2012 Efron tried the case after Matthews & Fullmer could not; plaintiffs obtained judgments totaling over $3.1 million, later partly reduced by settlements and appellate rulings.
- Deteriorating relations led to disputes over representation; Matthews & Fullmer sought substitute local counsel Iguina-Oharriz and Infante-Castellanos, while Efron sought to disqualify them or obtain an 80 percent lien.
- The district court ordered the plaintiffs’ representation to be clarified, briefly held funds in court registry to satisfy the judgment, and ultimately determined Matthews & Fullmer would continue representation, disallowing Efron from contacting the plaintiffs, while awarding Efron 40 percent of the fees after an equitable adjustment.
- Efron appealed, challenging credibility findings, the 40 percent fee award, and the district court’s ex parte communications with the plaintiff Rodriguez, which the court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had ancillary jurisdiction to resolve the fee dispute. | Efron argues no ancillary jurisdiction for purely private fee dispute. | Appellees contend funds were within court control and dispute arose from underlying litigation. | Yes; ancillary jurisdiction existed. |
| Credibility determinations regarding Efron’s representations. | Efron claims the court erred in finding he misled the court. | Court properly found inconsistencies and noncredible statements. | No reversible error; credibility findings affirmed. |
| Proper apportionment of attorneys’ fees between firms. | Efron seeks more than 40 percent due to extra work. | Court exercised discretionary equitable adjustment based on overall conduct. | Affirmed; 40 percent award sustained. |
| Ex parte communication with plaintiff Rodríguez. | Canon violation and due process concerns. | Ex parte communication was permissible for scheduling in an emergency. | No plain error; communication permitted under Canon 3(A)(4) in context. |
Key Cases Cited
- Rivera-Domenech v. Calvesbert Law Offices PSC, 402 F.3d 246 (1st Cir. 2005) (ancillary jurisdiction over fee disputes arising from underlying case)
- Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (U.S. 1994) (ancillary jurisdiction to enforce court decrees)
- Baer v. First Options of Chicago, Inc., 72 F.3d 1294 (7th Cir. 1995) (ancillary jurisdiction over counter-fee disputes in escrow)
- Grimes v. Chrysler Motors Corp., 565 F.2d 841 (2d Cir. 1977) (ancillary jurisdiction over fee dispute after settlement funds in registry)
- Taylor v. Kelsey, 666 F.2d 53 (4th Cir. 1981) (no ancillary jurisdiction over purely private contract dispute)
- Lipsett v. Blanco, 975 F.2d 934 (1st Cir. 1992) (deference to district court in fee determinations)
- Alejandro-Ortiz v. P.R. Elec. Power Auth., 756 F.3d 23 (1st Cir. 2014) (underlying case and judgment referenced in fee dispute)
- Liteky v. United States, 510 U.S. 540 (U.S. 1994) (impartiality and credibility considerations in adjudication)