Firms Settle Fee Dispute After Sex-Bias Class Action Resolves

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Hamburg & Golden has settled its suit against Sanford Heisler over fees the former alleged it was owed after the two firms worked together on behalf of the plaintiffs in a gender-discrimination class action.

The terms of the settlement, reached late last month, were not disclosed.

Hamburg sued Sanford in the Philadelphia Court of Common Pleas in July 2013 after the two firms disagreed on what cut of the fees Hamburg was owed after it worked with Sanford on settling a gender-discrimination matter. While the court documents don't reference the specific case and redact any mention of the client in exhibits, the two firms did work together during the timeframe outlined in the complaint in representing Francine Griesing in her $200 million gender-discrimination putative class action against Greenberg Traurig. That case settled in May 2013.

While Hamburg's suit against Sanford was filed in July 2013, Sanford didn't seek removal to federal court until after Hamburg filed its fourth amended complaint and notified Sanford in writing for the first time that damages were more than $75,000, Sanford said in its removal notice filed in the Eastern District of Pennsylvania on Jan. 23. On Jan. 31, U.S. District Judge Stewart Dalzell dismissed the case due to a settlement being reached.

According to Hamburg's complaint, the firm represented a client, on an hourly-rate basis, in a gender-discrimination case from 2009 through 2012. It helped the client navigate the administrative remedies that precede litigation. The U.S. Equal Employment Opportunity Commission found "reasonable cause" in June 2012 that Hamburg's client was discriminated against and faced retaliation and that there may be classwide claims, according to the complaint.

The client then decided to hire Sanford to file a case against the client's employer on a contingency fee basis. Sanford asked Hamburg to continue to perform services in connection with the case given its historical knowledge of the matter and its work before the EEOC, according to the complaint.

Hamburg said in the complaint that it continued to submit bills based on an hourly rate to the client, who then informed the firm that, under the client's agreement with Sanford, it was Sanford that was to pay Hamburg's bills. Beginning in March 2013, Hamburg submitted its bills to Sanford, Hamburg said.

In response to a question as to why the fees weren't being paid, Sanford told Hamburg that it was keeping the Hamburg invoices on file and would use them to determine Hamburg's proportional share of the attorney fees Sanford recovered in the matter, according to the complaint.

After the client's case settled, a Sanford attorney emailed Hamburg to inform the firm that, per Sanford's agreement with the client, the client would pay the invoices to Hamburg directly, according to the complaint. Hamburg said in the complaint that the client informed the firm that was not the client's arrangement, that Sanford was to pay the fees to Hamburg and that the client never agreed to pay Hamburg a proportional contingency fee.

In May 2013, Sanford wrote Hamburg to say it sent Hamburg a check to cover the invoices the firm submitted over the course of the litigation. Hamburg responded that the only written agreement the two firms now had was an email from Sanford saying it would pay Hamburg a proportional fee. Sanford responded, according to Hamburg's complaint, that the email was simply to confirm that Sanford had received the invoices and that it would determine after Sanford received its fee what portion was owed to Hamburg.

As of the time the fourth amended complaint was filed, Hamburg said it had not cashed the check Sanford sent it because Hamburg didn't believe it to be a proportional contingency fee. Hamburg said it believed the amount it was paid by Sanford was a "small fraction" of the amount Hamburg is actually owed on a contingency basis, according to the complaint.

Hamburg had sued Sanford for breach of contract, unjust enrichment and fraud.

Neil Hamburg of the Hamburg firm declined to comment. Sanford's attorney, Edward S. Mazurek of The Mazurek Law Firm, also declined to comment.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.

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