A recent Law 360 story by McCord Pagan, “Firm in Chinese Drywall MDL Must Arbitrate $6.8M Fee Tussle,” reports that a Louisiana federal judge has sent part of a $6.8 million fee dispute stemming from a settlement over allegedly defective Chinese drywall to arbitration, finding some of the firms making competing claims had agreed to arbitrate disputes in their co-counsel agreement.  U.S. District Judge Eldon Fallon granted the motion from Art Edge PC to invoke arbitration in the fee dispute between the Bryson Group of law firms and Collins Group of law firms — of which Art Edge is a member — that represented certain homeowners in the multidistrict litigation, according to an order signed Feb. 18 and entered Feb. 20.

In Judge Fallon’s order, he ignored arguments from the Bryson Group that it should get more than $1 million of the $6.8 million, as well as an argument from one of the Collins Group firms that it's entitled to all of the fee award, which it suggests it would use to honor its co-counsel agreement.  Yet on the arbitration issue, Judge Fallon sided with Art Edge, saying the firms did, in fact, agree on how to address any dispute arising from their co-counsel arrangement.

“The parties’ intention to arbitrate disputes such as this one could not be more clear,” Judge Fallon wrote.  The co-counsel agreement between the two groups of firms was created in 2009 in order to represent 174 homeowners in the massive Chinese drywall multidistrict litigation.  The $6.8 million at issue comes from a $1.1 billion settlement from Knauf Gips KG and a subsequent $111 million attorney fee award over the defective drywall.  The fee award dispute was sent to the court by the claims administrator when the firms couldn’t agree on the proper distribution.

Art Edge, a member of the Collins Group of law firms, had argued the Bryson Group didn’t fulfill its side of the representation agreement.  More specifically, Art Edge said most of the Bryson Group’s work was done by paralegals, and that it didn’t inform the other firms of any settlements or negotiations, among other things.  The Bryson Group includes Whitfield Bryson & Mason LLP, Rhine Law Firm PC, Pendley Baudin & Coffin and Luckey & Mullins PLLC, according to the filing.  The Collins Group includes the Collins Law Office — also known as Collins & Horsley PC — and Art Edge PC and Gentle Turner Sexton & Harbison LLC, according to the order.

At the same time, William Brian Collins of Collins & Horsley asked for the entire $6.8 million fee award he said the firm deserves for its work on the cases, which Art Edge and the Bryson Group opposed.  Art Edge and the Collins law firm are involved in a secondary fee dispute which at least partially involves fees from the Chinese drywall case, according to the order.

To make matters more complicated, another firm is involved and seeking its cut of the $6.8 million fee award.  The Law Offices of Joseph Buffington LLP is arguing it has a fee interest in several of the cases due to parallel co-counsel and fee-sharing agreements with members of both the Collins and Bryson groups, namely Whitfield Bryson & Mason and Collins' law firm.