Sher Leff, LLP v. Pawa Law Group, P.C.

Filing 33

ORDER granting 3 PAWA's Motion to Confirm Arbitration Award; denying 10 Sher Leff's Petition for Declaratory Judgment and its Motion to Strike; denying as moot 12 PAWA's Motion for Expedited Hearing; and denying as moot 13 PAWA's Motion to Confirm Inapplicability of Discovery Rules. So Ordered by Judge Steven J. McAuliffe.(lat)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Sher Leff, LLP,
Plaintiff/Counter-Defendant
v.

Case No. 14-cv-26-SM
Opinion No. 2014 DNH 073

Pawa Law Group, P.C.,
Defendant/Counter-Claimant
O R D E R
The parties, two law firms, entered into straight-forward
fee sharing arrangement, memorialized in a written contract.
Under the terms of that contract, Sher Leff was to receive 78%
and PAWA 22% of attorney’s fees recovered in an environmental
damage suit brought on behalf of the State of New Hampshire
against several manufacturers of gasoline containing MBTE (which
later found its way into the ground and groundwater).

The fees

recovered in that litigation have been substantial - millions of
dollars - and are expected to be even more substantial in the
near future.

This litigation arose after Sher Leff decided PAWA

was not entitled to its share of the recovered attorney’s fees
under the parties’ contract.

Background
Initially, New Hampshire’s Attorney General retained PAWA
and directed it to recommend additional litigation counsel to
assist in handling the case - specifically, a firm that was

experienced in handling environmental litigation of this sort,
and one financially capable of supporting what was expected to be
an expensive undertaking.

PAWA recommended Sher Leff, and the

Attorney General accepted that referral.

As the litigation

proceeded, and named defendants began settling the cases,
recovered attorney’s fees were collected and paid into a
revolving account managed by Sher Leff under the terms of the
parties’ fee-sharing agreement.

For a time, the recovered fees

were duly split between the two firms as agreed.

But, human nature being what it sometimes is, as larger and
larger sums were recovered, Sher Leff decided that it might be
“unethical,” or at least a breach of the fee splitting agreement,
for it to continue to pay over the agreed upon 22% to PAWA and,
conversely, that it should, both ethically and contractually,
retain a much larger share.

After all, Sher Leff seemingly

reasoned, it was pulling the laboring oar in the underlying
environmental litigation.

Moreover, the fee-sharing agreement

contained language that incorporated by reference obligations
owed by counsel under the applicable Code of Professional
Responsibility.

The Code, Sher Leff pointed out, precluded fee

splitting when the share paid to co-counsel did not reflect
proportional time, effort, or responsibility in carrying out the
legal work.

N.H. R. Prof. Conduct 1.5.

Because, in Sher Leff’s

evolving view, PAWA did not contribute 22% of the time and

2

effort, or assume 22% of the responsibility for the litigation,
Sher Leff just couldn’t bring itself to continue to disperse that
disproportionate amount to co-counsel (the co-counsel that
brought Sher Leff into the case in the first place).

With some urging by the Attorney General, the parties agreed
to arbitrate the dispute, such as it was.

They entered into an

arbitration agreement and participated in a lengthy and costly
proceeding before three highly qualified arbitrators.

The

arbitrators carefully considered the testimony offered, reams of
documents, argument by counsel, and written materials, before
concluding, in a comprehensive analytical opinion, that Sher
Leff’s position was untenable in every respect.

Discussion
A detailed review of the issues raised below and asserted
here on review is unnecessary and unwarranted.

The thorough,

thoughtful, and well-supported decision of the arbitrators speaks
for itself.

And, proceedings brought under the Federal

Arbitration Act to confirm, vacate, or modify an arbitration
award are summary in nature.

Cf. Air Line Pilots Ass’n Intern.

v. Aviation Assoc., Inc., 955 F.2d 90, 92 (1st Cir. 1992).
also Grant v. Houser, 2012 WL 975060, at *4 (5th Cir. 2012).

See

3

Suffice it to say that the arbitration panel found that the
fee agreement did not require proportionality as a condition to
PAWA’s entitlement to 22% and, even if it did, PAWA met the
proportionality condition espoused by Sher Leff.

Consequently,

the arbitration panel concluded that PAWA is entitled to its full
share of the recovered fees.

The arbitration panel also

concluded that PAWA was entitled to its attorney’s fees for
having been unnecessarily forced to arbitrate its rights and
interests under the parties’ fee-sharing agreement.

To the

extent Sher Leff now claims the arbitrators did not have the
authority under the arbitration agreement to award those fees, it
is mistaken.

The arbitrators construed the agreement to permit a

fee award, and the court agrees (interestingly, and
contradictorily, Sher Leff also sought an award of attorney’s
fees in the arbitration).

Moreover, an award was plainly

warranted under applicable New Hampshire law.

Sher Leff’s claim that the arbitrators were without
jurisdiction because the final award was issued beyond the thirty
day period set in the applicable rules is also meritless, given
that that issue itself was subject to arbitration and the
arbitration panel properly resolved it against Sher Leff (Sher
Leff was properly held to have waived the period with respect to
supplemental attorney’s fees consideration, by its statements and

4

conduct, and it was hardly unreasonable for the arbitrators to so
conclude).

Conclusion
The arbitration award is confirmed in all respects.

Sher

Leff’s Petition for Declaratory Judgment (see document no. 1-1)
and its Motion to Strike (document no. 10) are denied.1

PAWA’s

Motion to Confirm Arbitration Award (document no. 3) is granted.
PAWA’s Motion for an Expedited Hearing (document no. 12), as well
as its motion to Confirm Inapplicability of Discovery Rules
(document no. 13), are denied as moot.

The Clerk of Court shall enter judgment in accordance with
this order and close the case.

SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
April 14, 2014
cc:

Gregory S. Clayton, Esq.
Jon-Jamison Hill, Esq.
Robert S. Chapman, Esq.
Thomas J. Pappas, Esq.
Robert D. Cultice, Esq.
James F. Ogorchock, Esq.
1

At the hearing on March 21, 2014, counsel for both
parties agreed that their respective pleadings and filings, taken
together, should be treated as “a motion to vacate and a motion
to confirm” the arbitrators’ decision.
5