Securities Law

Ex-Client Sues Firm re 'Massive Overbilling,' Partner Says 'Meritless' Suit a Bill Dispute Tactic


A former client has sued a New York-based law firm in federal court for malpractice, accusing Wilk Auslander of “massive overbilling for needless work” while defending several securities class actions.

In the suit (PDF), which was filed Monday in the Central District of California, ex-client Westport Capital Inc. and two individual plaintiffs also accuse the law firm of revealing confidential information related to the representation and harming the defense of the cases by attaching unredacted copies of law firm billing statements to a New York state court suit filed last month.

The Westport Capital plaintiffs say they were not told by Wilk Auslander of the automatic discovery stay that applies to securities class actions. Instead, they contend, the law firm “pursued at full throttle overblown discovery,” racking up substantial costs even as its clients sought to keep a lid on costs and have the firm perform only reasonably necessary work.

However, name partner Jay Auslander told the ABA Journal in a telephone interview that the law firm and its attorneys had done nothing wrong, had informed its client of the stay and had looked into the facts of a complex securities matter in order to understand the litigation, the appropriate defenses that could be pursued and its settlement value, if any.

“We sued them, and this is surely a tactical response to that litigation,” he said, adding that the $200,000 amount at issue in the New York state court legal bill dispute is very reasonable for this type of representation.

Auslander also said his firm had been successful for Westport Capital in winning dismissals.

Looking at documents concerning the securities class action litigation, he said, “was the appropriate, responsible thing to do. … It would be irresponsible not to do so.”

Hat tip: Courthouse News.

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