Posted Jun 13, 2012 12:50 pm CDT
Updated: Maricopa County has taken a new tack in its billing dispute with Ogletree, Deakins, Nash, Smoak and Stewart.
A counterclaim (PDF) filed by the county is a would-be class action filed on behalf of any public sector clients that have been overbilled by the firm. According to the countersuit, the county has identified 36 instances in which Ogletree classified nonattorney law grads as associates for billing purposes. The countersuit cites the county’s belief—without detailing any specific evidence—that Ogletree has “billed all of its public sector clients in a similar fashion.”
“It appears that Ogletree’s practice, nationwide, is to enter nonattorneys into its personnel database under the classification of ‘associate’ when they begin work following law school, but before they have passed the bar, and before they become admitted to practice law,” the suit says.
The counterclaim also accuses Ogletree of funneling some of its legal work to 10 subcontractor law firms that sometimes billed at rates surpassing the amounts allowed in Ogletree’s contract with the county.
The class action claims fraud and breach of contract. Maricopa County also alleges breach of fiduciary duty in a portion of the countersuit dealing with its own claims.
Ogletree has billed the county about $5 million for its legal work from 2007 to 2010, including work done on behalf of Sheriff Joe Arpaio and former County Attorney Andrew Thomas; the county has paid about $4 million.
Ogletree recently settled a suit claiming the county defamed it in a termination letter alleging that the firm possibly inflated its legal bills. After dropping the suit, Ogletree refunded $51,000 to the county and admitted it had charged attorney rates for an employee who had not yet received her law license, according to prior coverage. Ogletree blamed the overcharge on a coding mistake.
The counterclaim alleges Ogletree also billed the county for a second law grad who had not yet passed the bar.
According to the counterclaim, Ogletree did not include the charges that were subject to the refund on documents that it turned over to the county. The counterclaim says Ogletree has failed to cooperate in an audit despite a ruling requiring it to turn over nonprivileged information.
“When the county has communicated with Ogletree that documents that it provided were incomplete and/or false,” the counterclaim says, “Ogletree has, through its counsel, John Doran, responded that the county was ‘jousting at windmills’ and that the [county’s] concerns were ‘all foam and no beer.’ ”
Doran, a partner at Sherman & Howard in Phoenix, is representing Ogletree in all its disputes with the county. In an interview with the ABA Journal, he calls the class action counterclaim “truly frivolous,” “futile,” a “litigation stunt,” “preposterous” and “the most bizarre class action in history.”
Doran says Ogletree voluntarily paid Maricopa County for the misclassified law grad “even though the county still owes us almost a million dollars,” and the firm offered to reimburse the county if it found any other errors. Rather than asking for additional reimbursement because of the second misclassified lawyer, he said, the county chose to file “a truly frivolous class action.”
“We have made clear to the county that these were inadvertent,” he said of the mischaracterized law grads. “It is not a practice, it is not a policy, it is not a procedure. It is a coding error.”
Doran said he has worked at other large law firms and it is a common practice to bill unlicensed law grads as associates. The issue in the Maricopa County case, he said, is whether such billing violates the contract.
Doran also said Ogletree did nothing wrong when it hired subcontractor law firms because Maricopa County approved the engagements and the billing rates.
Asked for a possible motive for the class action, Doran said he had to be cautious in his response, and then listed “components that go to motivation.” One component, he said, is that the county’s lawyers—David Selden and Julie Pace—are former Ogletree partners, “an awkward dynamic.” Another component, he said, was that the county represented officials and departments adverse to the county, including the sheriff’s and county attorney’s office. There was “bitter internecine warfare” between the county and those offices even before Ogletree was hired, he said.
“I think this class action is futile on a dozen different levels,” Doran told the ABA Journal. “They’re not going to get anything out of the class action. It is simply another litigation stunt, and we’ve seen lots of litigation stunts from the county.”
Maricopa County communications director Cari Gerchick reacted to Doran’s comments about the county’s lawyers in a statement to the ABA Journal. It reads: “Maricopa County’s governing body voted unanimously to direct our attorneys to file this counterclaim. The motivation behind the filing has nothing to do with our choice of counsel but with the county’s desire to get to the truth. Maricopa County hopes that the outcome of the case will be determined by the facts, not by irrelevant personal attacks.”
Updated at 2 p.m. to include comments from John Doran. Updated on June 14 to include comments from Cari Gerchick.