Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc.

Filing 94

Statement re 86 Supplemental MOTION to Appoint Lead Plaintiff and Lead Counsel and Proposed Six-Month Discovery Plan OF WITHDRAWAL OF MOTION FOR APPOINTMENT OF BECK & LEE AS INTERIM CLASS COUNSEL by Beck & Lee Business Trial Lawyers. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4)(Beck, Jared) (Filed on 8/18/2010)

Cats and Dogs Animal Hospital, Inc. v. Yelp! Inc.

Doc. 94 Att.

Exhibit 1

Cats and Dogs Animal Hospital, Inc. et al. v. Yelp! Inc., Case No. 3:10CV02351 MHP EXH. ISO STATEMENT OF WITHDRAWAL OF MOTION FOR APPOINTMENT OF BECK & LEE AS INTERIM CLASS COUNSEL

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BECK & LEE BUSINESS TRIAL LAWYERS JARED H. BECK (233743) ELIZABETH LEE BECK (233742) Courthouse Plaza Building 28 West Flagler Street, Suite 555 Miami, FL 33130 Telephone: [phone] Facsimile: 786 664 3334 [e-mail] [e-mail] Counsel for Plaintiffs and the Proposed Classes UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA EVANGELINE RED, JENNIFER RED, and RACHEL WHITT, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. UNILEVER PLC and UNILEVER UNITED STATES, INC., Defendants. Case No: 3:10-cv-00387 JW (HRLx) Pleading Type: Class Action BECK & LEE BUSINESS TRIAL LAWYERS' OPPOSITION TO NOTICE OF TERMINATION OF BECK & LEE AND REESE RICHMAN LLP BY PLAINTIFFS EVANGELINE RED, JENNIFER RED, AND RACHEL WHITT AND [PROPOSED] ORDER Judge: The Honorable James Ware

Red et al. v. Unilever PLC et al., Case No. 3:10-cv-00387 JW BECK & LEE BUSINESS TRIAL LAWYERS' OPPOSITION TO NOTICE OF TERMINATION

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The Notice of Termination of Beck & Lee and Reese Richman LLP by Plaintiffs Evangeline Red, Jennifer Red, and Rachel Whitt and [Proposed] Order ("Termination Notice") [D.E. 70] filed by The Weston Firm ("Weston") on August 16, 2010, is the latest episode in a shocking course of unethical and bad-faith conduct undertaken by Weston in recent days. Three weeks ago, Roz Sutton, presently The Weston Firm's paralegal and sole employee, indicated in conversation with one of Beck & Lee's two attorneys, Elizabeth Lee Beck, that Weston engaged in certain practices which, if true, are illegal: (1) Gregory Weston had offered a "kickback" to Ms. Sutton's roommate in return for serving as a named plaintiff in class actions; (2) Mr. Weston had promised Ms. Sutton a "finder's fee" in exchange for "signing up" her roommate as a named plaintiff; and (3) The Weston Firm has agreed to compensate its nonlawyer employees on a percentage basis from settlement proceeds.1 See Declaration of Elizabeth Lee Beck ("ELB Decl.") ¶ 9. The details of Ms. Beck's conversation with Ms. Sutton in Los Angeles on Thursday, July 29, 2010, a conversation witnessed by Beck & Lee's other attorney, Jared Beck, are set forth in Ms. Beck's concurrently filed declaration. Id. Upon her return to Florida the next day, Ms. Beck asked her paralegal, Alejandro Gutiérrez, to assemble a list of all plaintiffs in the 10 consumer class actions being jointly prosecuted by Beck & Lee and Weston who originally retained Weston, which includes Evangeline Red, Jennifer Red, and Rachel Whitt, the named Plaintiffs in this action. See id. ¶ 11. Ms. Beck also directed Mr. Gutiérrez to obtain from Weston the contact information for each of these plaintiffs, so that she could speak with them directly to investigate the circumstances of how they retained Weston, and to ascertain whether any of them had been promised "kickbacks" by Weston in return for serving as class representatives. Id. ¶¶ 10, 11. Additionally, Ms. Beck investigated the whereabouts of one of Weston's former employees, Evan Lee, in preparation to contact him regarding Weston's practices. Id. ¶ 13. Mr. Gutiérrez proceeded to contact Weston's office by e-mail and phone, but Weston did not respond; then, on
See U.S. v. Lerach, CR-07-964 (C.D. Cal.) (criminal matter involving kickbacks to class representatives); Cal. Bus. & Prof. Code § 6154 (prohibiting use of runners and cappers by attorneys); Rule 1-320, Cal. Rules of Prof. Conduct (sharing of fees between lawyers and non-lawyers is illegal); Matter of Nelson, 1990 WL 140525 (Cal. Bar. Ct. 1990) (same).
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Red et al. v. Unilever PLC et al., Case No. 3:10-cv-00387 JW BECK & LEE BUSINESS TRIAL LAWYERS' OPPOSITION TO NOTICE OF TERMINATION

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August 12, 2010, Weston abruptly sent 12 separate and unexplained "termination" notices to Beck & Lee, demanding that Beck & Lee not communicate with any of the class representatives who originally retained Weston. Declaration of Alejandro Gutiérrez Decl. ¶¶ 7-9; Declaration of Jared H. Beck ("JHB Decl.") ¶ 19 & Ex. C. Since then, Weston has refused to take Beck & Lee's calls or provide any response to its multiple e-mails and requests for information about the plaintiffs who originally retained Weston. See ELB Decl. ¶¶ 14-16, JHB Decl. ¶ 22. Also on August 12, the same day it sent the 12 "termination" notices, and equally without any prior notice, explanation, demand or warning, Weston filed a federal lawsuit against both Beck & Lee and its other co-counsel firm, Reese Richman LLP ("Reese Richman"), in the Southern District of California. Through the lawsuit, Weston seeks to invalidate two separate Joint Prosecution Agreements, which have been in place between and among the firms since February and March 2010.2 The Joint Prosecution Agreements cover both the instant action, Red et al. v. Unilever et al. ("Red") and its related case, Rosen et al. v. Unilever et al., Case No. 09-02563-JW ("Rosen"), along with a number of other consumer class actions currently pending in California federal courts. See JHB Decl. Ex. A at p. 1; Ex. B at p. 1. In its own complaint, Weston does not deny signing the Joint Prosecution Agreements or jointly prosecuting Red and Rosen with Beck & Lee and Reese Richman up until now. Rather, Weston takes the position that the Joint Prosecution Agreements are null and void and may be terminated on the eve of a preliminary settlement hearing ­ after Beck & Lee has expended substantial hours and costs, all with Weston's knowledge, consent, encouragement, and cooperation, see JHB Decl. ¶ 133 ­ because the

A copy of the complaint is attached as Exhibit D to the Declaration of Mr. Beck which is being filed concurrently with this opposition. The Joint Prosecution Agreements are attached as Exhibits A and B to Mr. Beck's declaration.
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In addition to doing the lion's share of the research and writing on Plaintiffs' Opposition to Unilever United States Inc.'s Motion to Dismiss [D.E. 23], Beck & Lee has spearheaded the parties' settlement negotiations, starting with the parties' mediation on March 18, 2010, in San Francisco, and culminating with the settlement term sheet signed by the parties on June 21, 2010 in San Jose. See JHB Decl. ¶ 13.

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Red et al. v. Unilever PLC et al., Case No. 3:10-cv-00387 JW BECK & LEE BUSINESS TRIAL LAWYERS' OPPOSITION TO NOTICE OF TERMINATION

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plaintiffs purportedly did not consent in writing to the Joint Prosecution Agreements. See JHB Decl. Ex. D ¶¶ 3-4.4 Weston's claim depends on a flawed reading of a California Rule of Professional Conduct that applies to actual divisions of fees, not joint prosecution agreements. See JHB Decl. Ex D ¶ 3 (complaint citing Cal. R. Prof. Conduct 2-200); Cohen v. Brown, 173 Cal. App. 4th 302, 320 (2009) ("We also note that rule 2-200 only requires that the client's consent to a division of fees be given prior to the actual division of the fees. It does not require client consent prior to the commencement of work by the associated in attorney/law firm." (emphasis in original)). Of course, as this is a proposed class action, any division of fees between counsel would have to be approved not only by the class representatives, but by the Court and then subject to any objections from absent class members. That aside, Weston's conduct shows a shocking lack of ethics, not to mention bad faith. Ms. Sutton's conversation with Ms. Beck ­ and Weston's endeavor to seal off its co-counsel from communicating with the named plaintiffs in the wake of this conversation ­ raises serious concerns about Weston's fitness to serve as class counsel. See Brame v. Ray Bills Fin. Corp., 85 F.R.D. 568, 577 (N.D.N.Y. 1979) ("the ethical competence of attorneys desiring to represent a class is relevant to the question of adequacy of representation"); Carlisle v. LTV Electrosystems, Inc., 54 F.R.D. 237, 240 (N.D. Tex. 1972) (denying class certification where counsel solicited class representatives). Moreover, Weston has demonstrated its utter disregard for agreements it acknowledges having signed, as well as its willingness to adopt frivolous legal positions. On these grounds, Beck & Lee submits that Weston should be disqualified from continuing to represent the proposed Classes. Also pertinent to the sudden timing of Weston's actions is the fact that the Court is scheduled to hear the parties' Motion for Preliminary Approval of Settlement on September 27, 2010. See Order Setting Hearing on Motion for Preliminary Approval of Settlement [D.E. 69].

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Other than the 12 form "termination" letters signed and sent by Weston, none of the plaintiffs have contacted Beck & Lee to express dissatisfaction with the representation or to seek termination of the attorney-client relationship. See ELB Decl. ¶ 15; JHB Decl. ¶ 19.

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The preliminary approval motion is due by September 3, 2010. See id. Among other things, Weston appears to be trying to gain leverage on the eve of settlement by: (1) purporting to fire its co-counsel; and then (2) suing them in its own backyard.5 Weston's conduct is beyond the pale. Weston should not be permitted to abuse the judicial system, and terminate its co-counsel in a retaliatory manner on the eve of settlement. Beck & Lee respectfully requests that the Court: (1) strike the Notice of Termination of Beck & Lee and Reese Richman LLP by Plaintiffs Evangeline Red, Jennifer Red, and Rachel Whitt and [Proposed] Order; (2) disqualify The Weston Firm as counsel for the proposed Classes; and (3) grant such other and further relief as may be necessary and proper. DATED: August 18, 2010 Respectfully Submitted, s/Elizabeth Lee Beck Elizabeth Lee Beck BECK & LEE BUSINESS TRIAL LAWYERS JARED H. BECK ELIZABETH LEE BECK 28 West Flagler Street, Suite 555 Miami, FL 33130 Telephone: [phone] Facsimile: 786 664 3334 Counsel for Plaintiffs and the Proposed Class

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In addition to bringing suit in San Diego against Beck & Lee and Reese Richman, Weston also filed unauthorized "Notices of Termination" against Beck & Lee on August 16 and 17 in five other federal class actions covered by the firms' Joint Prosecution Agreement, and then filed an unauthorized pleading and memorandum stripping Beck & Lee from the caption and signature pages in two of those cases. JHB Decl. ¶ 21.

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Red et al. v. Unilever PLC et al., Case No. 3:10-cv-00387 JW BECK & LEE BUSINESS TRIAL LAWYERS' OPPOSITION TO NOTICE OF TERMINATION