Peterson v. Islamic Republic of Iran
220 F. Supp. 3d 98
| D.D.C. | 2016Background
- Plaintiffs are survivors and families of victims of the 1983 Beirut Marine barracks bombing; this Court entered default judgment against Iran and later funds were seized and placed into a Qualified Settlement Fund (QSF) administered in the SDNY.
- Lead counsel were Fay & Perles under a written contingency retainer (33 1/3% of gross recovery); Fay & Perles retained other lawyers to assist in damages proof and collection.
- Jay Glenn claims he was retained as an associate damages lawyer (written 2003 agreement and alleged additional oral/referral arrangements) and filed a charging lien seeking percentages of recoveries for plaintiffs he represented or referred.
- David Cook claims a written retainer with Fay & Perles to provide collection services for a 10% contingency and filed a charging lien and moved to compel arbitration under that retainer.
- Fay & Perles moved to quash both liens, arguing the retainer agreements were between attorneys (not plaintiffs), the QSF is administered in New York, and plaintiffs never agreed to pay Glenn or Cook directly; they oppose compelling arbitration as plaintiffs were not parties to the Cook agreement.
- The Court limited its inquiry to whether Glenn and Cook have equitable charging liens against plaintiffs’ recovery and whether Cook can compel arbitration; it did not adjudicate the merits of any fee disputes among attorneys.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Court jurisdiction to decide attorney charging liens over QSF funds seized in another district | Fay & Perles: QSF is administered in SDNY so this Court lacks control/jurisdiction to enforce liens | Glenn/Cook: ancillary/jurisdictional power exists to adjudicate liens related to judgments entered here | Court has ancillary jurisdiction and will adjudicate lien claims despite QSF being administered in NY |
| Whether Glenn has a charging lien against plaintiffs' recovery | Glenn: had a written engagement with Fay & Perles and separate agreements with some plaintiffs (and an oral referral fee agreement) | Fay & Perles: Glenn was associate counsel retained by them; no contract between Glenn and plaintiffs authorizing payment from recovery | Quashed Glenn's lien — no independent attorney-client contract with plaintiffs; associate agreement only creates claim against lead counsel, not against clients' recovery |
| Whether Cook has a charging lien against plaintiffs' recovery | Cook: retainer language references "Plaintiffs through counsel" and provides for payment from collected funds; plaintiffs are effectively parties | Fay & Perles: Cook's agreement is between attorneys (Cook, Fay, Perles); plaintiffs did not agree to be bound or to pay Cook | Quashed Cook's lien — agreement was between attorneys; plaintiffs did not authorize or ratify Cook's employment or fee being paid from their judgment |
| Whether Cook can compel arbitration of disputes with plaintiffs under his retainer | Cook: arbitration clause in retainer and plaintiffs are bound (directly or via agency of their counsel) | Fay & Perles: plaintiffs never agreed to arbitrating with Cook; any dispute is between attorneys | Denied — plaintiffs were not parties to the arbitration agreement and Cook failed to show actual or apparent authority to bind plaintiffs; no present dispute between Cook and plaintiffs properly before the Court |
Key Cases Cited
- Wolf v. Sherman, 682 A.2d 194 (D.C. 1996) (charging-lien principles and requirement of attorney-client agreement)
- Democratic Cent. Comm. v. Washington Metro Area Transit Comm'n, 941 F.2d 1217 (D.C. Cir. 1991) (associate counsel cannot assert lien absent client authorization)
- District of Columbia Redevelopment Land Agency v. Dowdey, 618 A.2d 153 (D.C. 1992) (oral contingency agreements can support equitable charging lien when client intent is clear)
- Martens v. Hadley Memorial Hosp., 753 F. Supp. 371 (D.D.C. 1990) (continuing jurisdiction to affect distribution of judgment proceeds and attorney lien intervention)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (court must determine whether parties agreed to arbitrate)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (U.S. 1985) (strong federal policy favoring enforcement of arbitration agreements)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (arbitration agreements enforced according to their terms)
- United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (U.S. 1960) (arbitration is a matter of contract; parties cannot be required to arbitrate disputes they did not agree to submit)
- Peterson v. Islamic Republic of Iran, 758 F.3d 185 (cir. 2014) (appeal affirming aspects of recovery proceedings)
- Bank Markazi v. Peterson, 136 S. Ct. 1310 (U.S. 2016) (Supreme Court review of assets-turnover issues)