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C.A. Keeps Identity of Client in Fee-Splitting Dispute Secret
Lead of Superior Court Is Followed in Not Identifying Children of Marvin Gaye As Parties in Underlying Litigation
By a MetNews Staff Writer
Div. Three of the Court of Appeal for this district has acquiesced in a Los Angeles Superior Court judge’s determination that in resolving a dispute involving a referring lawyer’s claim of entitlement to half of a massive fee received by a lawyer who took a case to trial in federal court and obtained a judgment for more than $7 million, client confidentiality requires that the identity of the client be withheld from the public.
The referring lawyer, David P. Rudich, contended in his opening appellate brief that litigator Paul N. Philips “received a fee of over $1 million plus additional future fees on the same matter to be paid from future royalties” while Philips countereed that the figure “is both fancifully exaggerated and contradicts Appellant’s position taken in the anti-SLAPP motion” that the fee was $500,000.
In an unpublished opinion filed Thursday, affirming the denial of Rudich’s anti-SLAPP motion, Orange Superior Court Kimberly A. Knill, sitting on assignment, referred only to “the high-profile client” in the earlier litigation, not naming that client. She pointed out in a footnote that the publicly filed version of the amended complaint contained redactions, but that the plaintiff/respondent, Law Offices of Paul N. Philips, “identifies the high-profile client’s case information in its opening brief,” but that “we have endeavored to refer only generally to redacted allegations.”
The respondent’s brief identifies the underlying litigation as Bridgeport v. Williams, filed in the U.S. District Court in 2013. That litigation was the subject of widespread news coverage.
Information on Website
The law firm’s website recites:
“Mr. Philips successfully represented the interests of the family of legendary songwriter, composer, and performer Marvin Gaye, in a high-profile federal copyright infringement action against Universal Music Group and music superstar personalities Pharrell Williams, Robin Thicke and T.I., resulting in a verdict in favor of the Gaye family in the amount of $7.4M—believed to be the largest music copyright infringement verdict in recorded legal history.” (The website does not mention that about $2 million was trimmed from the award by the District Court in 2015.)
The Philips firm did not represent a single “high profile client,” as Knill set forth, but, rather, three low-profile children of a celebrity, Marvin Gaye, who died in 1984. Nona Marvisa Gaye, Frankie Christian Gaye and Marvin Gaye III, as counter-claimants, prevailed in establishing that their father’s 1973 song “Got to Give It Up” was infringed by the defendants’ “Blurred Lines,” released in 2013.
Knill provided no rationale for keeping secret who was represented in the infringement litigation. The opinion was in conformity with an increasing trend in appellate court opinions of concealing identities.
Trial Court’s Rationale
In granting the Philips firm’s motion for a sealing of the initial complaint in the case, Los Angeles Superior Court Judge Craig D. Karlan on May 30, 2019, explained:
“The Court finds an overriding interest exists that overcomes the right of public access to the record, that is, the California Business and Professions Code and the California Rules of Professional Conduct both recognize the confidentiality of attorney-client information and asks that attorneys not reveal such information which is protected from disclosure by Business and Professions Code section 6068. subdivision (e)(1), which requires attorneys to ‘preserve the secrets[] of his or her client.’ Being that the underlying documents are client documents, if the complaint were not sealed, such information would be made public without the client’s consent, and the interest in preventing such an occurrence causes the Court to conclude that sealing the complaint is proper here.”
In giving the go-ahead to filing an unredacted copy of an amended complaint under seal, Karlan simply declared that “having heard oral argument, and due deliberation having been given,” the motion “is GRANTED, and Plaintiff may file its unredacted” first amended complaint “with this Court under seal.”
Nature of Lawsuit
The lawsuit between the lawyers was instituted by Philips’s law office against Rudich, formerly of West Hollywood but now located in Arizona, and his law firm. The plaintiff wants a declaration that he does not owe Rudich half of his earnings from representation of the Gaye family and seeks damages for disparaging remarks Rudich allegedly made about Phillips to the “celebrity client” and others.
Rudich filed a cross-complaint for fees. In his amended cross-complaint, he sets forth:
“This is a story of a betrayal by attorney Philips and his firm. Cross-Complainant Rudich is a UCLA law school graduate and has practiced law continuously in Los Angeles County and Beverly Hills since 1971. Cross-Complainant Rudich has represented some of the biggest and most successful musical acts in history, including but not limited to, KISS, Motley Crew, Blind Melon, Graham Nash and Blondie. Cross-Complainant Rudich has also represented 20th Century Fox Film Corporation.”
He alleges that in 2013, then at age of 71, he introduced a client to Philips in connection with “an important litigation matter, involving the copyright infringement to a world famous song.”
Rudich insists that in the more than 10 cases he had referred to Philips in the past, he received a referral fee of 50 percent of what Philips garnered, which is what he expected from the 2013 referral.
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Above is a page from the amended complaint, as redacted, in an action over a fee-splitting between attorneys. ”APLC” is an abbreviation of “A Professional Law Corporation” which refers to the Law Offices of Paul N. Philips. The Court of Appeal for this district has embraced a ruling by the Los Angeles Superior Court hiding the identity of the clients of the attorneys. |
Philips’s View
In the respondent’s brief in the Court of Appeal, the Philips firm says that in conformity with the Rules of Professional Conduct, its engagement agreement with the client detailed the fee-sharing arrangement with Rudich, saying he “would be paid in proportion to the time he expended on the Client’s matter.” It recites that Rudich twice reviewed the document before it was presented to the client and proposed no changes.
It says that Rudich, “a skilled and well-known transactional lawyer with 50 years of transactional agreement review under his belt, and charged with knowledge of the Rules of Professional Conduct, approved and had the Client execute” the agreement, aware of “the fee-sharing consent.”
As it happened, after the referral, Rudich’s only involvement with the case, according to the brief, was attending one deposition, and only after “pleading” by the Philips firm because its “principal had to attend a funeral out-of-state.”
Anti-SLAPP Motion
Knill’s opinion affirms an order by Los Angeles Superior Court Judge Elaine W. Mandel denying an anti-SLAPP motion Rudich filed in response to the Philips firm’s suit against him. Rudich claimed that statements he allegedly made to various persons slamming Philips—including allegedly telling someone he referred to that lawyer that he routinely steals money from clients—are protected conduct in light of the litigation privilege.
Mandel said that Rudich’s purported utterances are not shown to “relate to or are necessary to prepare for anticipated litigation,” declaring:
“That the parties were involved in a dispute over fees does not, on its own, render any and all representation made by defendants about plaintiffs protected petitioning activity. Defendants fail to establish the allegations are based on protected activity.”
Agreeing, Knill wrote:
“Rudich has not sufficiently connected the alleged defamatory statements to this litigation or to anticipated litigation. Rudich argues without evidentiary support the alleged defamatory statements were protected activity because they were part of a preparatory investigation in anticipation of the instant fee dispute and because he made them to the client in the underlying copyright litigation.”
Rudich thus did not satisfy the initial requirement of an anti-SLAPP motion, a showing of protected activity, she said.
On May 29, 2020, Los Angeles Superior Court Judge Lisa Hart Cole stayed all proceedings in the case pending the Court of Appeal’s action on Rudich’s appeal from the denial of his anti-SLAPP motion.
The case is The Law Offices of Paul N. Philips v. Rudich, B305942. Joining in Knill’s opinion were Acting Presiding Justice Luis Lavin and Justice Anne H. Egerton.
Beverly Hills attorney Philip Kaufler represented Rudich and his law firm in seeking reversal and Philips, joined by Samantha E. Mirabello of his firm, argued for an affirmance.
Attorney Comments
Kaufler on Friday remarked:
“I believe the opinion was wrongly decided because the alleged defamatory statements were protected activity in that they are part of my client’s investigation and accumulation of evidence in anticipation of a fee dispute.”
Philips said on Friday:
“The Court’s well-reasoned opinion reflects the established rule that not all pre-litigation speech is protected. The litigation privilege is not absolute, and simply does not work to protect Mr. Rudich’s false and defamatory statements leveled against me and my firm. While I understand Mr. Rudich is upset over the operation of California’s attorney fee sharing rules, those rules control, and I intend to follow them explicitly.
“As for Mr. Rudich’s comments, I have never been dishonest with a client and never will be - I take far too much pride in this profession and have far too much respect for the people I serve.”
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