A recent Law 360 by Chart Riggall, “Judge Says Trial Needed to Split Firms’ Fee Award,” reports that a federal magistrate judge said a trial is necessary to split the $1.8 million baby of attorney fees that two law firms have been squabbling over since their 2020 victory in a labor class action against DuPont.  In a recommendation, Pennsylvania Magistrate Judge Martin Carlson found that while there exists "no legally enforceable agreement" to split the fees between MoreMarrone LLC and Stephan Zouras LLP, the latter firm — which sued MoreMarrone shortly after the fees were awarded — had unquestionably contributed to winning the $5 million settlement.

"The undisputed evidence establishes that the Zouras firm has a valid, yet unquantified, quantum meruit claim, since it is uncontested that the plaintiff attorneys provided some value and sweat equity to the successful litigation of the Smiley case and have not yet been compensated for their efforts," Judge Carlson wrote, referring to the Bobbi-Jo Smiley v. E.I. du Pont De Nemours and Co. case resulting in the settlement.  Judge Carlson, whose recommendation will be reviewed by a federal district judge, lamented — as he has in past orders — the falling out between the firms as "a sobering parable regarding the divisive and destructive power of money."

The original lawsuit against DuPont was first filed in 2012 by MoreMarrone and Greenblatt Pierce Funt & Flores — now Weir Greenblatt Pierce LLP — on behalf of workers who said they were denied pay for off-clock work.  The Greenblatt firm eventually stepped away from the case, with Stephan Zouras joining as co-counsel in 2018.  MoreMarrone and Stephan Zouras, however, never entered into any formal agreement about how the funds would be split were they to prevail, according to Judge Carlson.  Zouras was instead assured by its co-counsel only that the terms would be "as favorable to you as possible."

After the district court awarded the roughly $1.8 million to MoreMarrone — charging the two firms with sorting out the split for themselves — Stephan Zouras sued, claiming a $573,000 figure well above the $325,000 MoreMarrone offered.  At issue before Judge Carlson were dueling motions for summary judgment.  MoreMarrone, citing the lack of a binding agreement, asked the court to toss out Stephan Zouras' breach of contract, fraud, and breach of fiduciary duty claims. That request was granted.

But Judge Carlson went on to find that contrary to MoreMarrone's claims, that lack of contract did not exclude Stephan Zouras from any and all compensation — the firm is still entitled to payment for the work done.  "There can be no question that it would be inequitable for the defendants to continue to retain the benefit of the full fees award without payment of value to the Zouras firm for its reasonable contribution to this effort," Judge Carlson wrote.