In re Outsidewall Tire Litigation

178 F. Supp. 3d 300, 2016 U.S. Dist. LEXIS 47780, 2016 WL 1441350
CourtDistrict Court, E.D. Virginia
DecidedApril 7, 2016
DocketCase No. 1:09-cv-1217
StatusPublished

This text of 178 F. Supp. 3d 300 (In re Outsidewall Tire Litigation) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Outsidewall Tire Litigation, 178 F. Supp. 3d 300, 2016 U.S. Dist. LEXIS 47780, 2016 WL 1441350 (E.D. Va. 2016).

Opinion

[302]*302MEMORANDUM OPINION

T. S. Ellis, III, United States District Judge

At issue on remand from the Fourth Circuit in this copyright infringement and conversion case is the proper quantum meruit analysis of the fee award to which plaintiffs’ former counsel is entitled and the proper contract analysis of the costs to which plaintiffs’ former counsel is entitled. The dispute is between (i) plaintiffs, who [303]*303won a final and now-affirmed $26 million judgment against various foreign corporations,1 and (ii) Gilbert LLP (the “Gilbert Firm”), plaintiffs’ former counsel, over the value of the latter’s lien for fees and expenses, filed pursuant to Va. Code § 54.1— 3932. This is, in essence, a fee dispute between a law firm and' the firm’s former clients. It arises because post-judgment, but prior to the completion of the appeal, two former Gilbert Firm attorneys who led the effort to win the judgment — August Matteis and William Copley — left the Gilbert Firm to form their own law firm, Weisbrod, Matteis & Copley PLLC (“WMC”). When this occurred, plaintiffs elected to discharge the Gilbert Firm as plaintiffs’ counsel and instead to retain WMC as plaintiffs’ counsel. Thereafter, the Gilbert Firm, based on its fee contract with plaintiffs and the work it had performed on the case, filed a lien in this district for fees and expenses under Va. Code § 54.1-3932, claiming more than $4.5 million in fees plus a share of the moneys received from the judgment collection efforts, and more than $1.8 million in costs and expenses. Plaintiffs subsequently filed a motion to determine the value of the Gilbert Firm’s lien, and on September 29, 2014, a Memorandum Opinion and Order issued granting plaintiffs’ motion inasmuch as the reasonable value of the Gilbert Firm’s lien was determined to be $1,958,-341.67 — $1,237,720 in attorney’s fees and $720,621.67 in costs. In re Outsidewall Tire Litigation, 52 F.Supp.3d 777, 795 (E.D.Va.2014) (“Outsidewall /”). The Gilbert Firm appealed, and the Fourth Circuit vacated and remanded the fees and costs determination reflected in Outside-wall I on the grounds that it: (i) did not expressly apply the factors for quantum meruit fee awards set forth by the Supreme Court of Virginia in County of Campbell v. Howard, 133 Va. 19, 112 S.E. 876, 885 (1922), and (ii) erroneously applied a quantum meruit analysis to the costs issue. instead of enforcing a costs provision in the parties’ contract. Thereafter, the parties, as directed, filed supplemental briefs to aid resolution of the matter on remand. As the matter has been fully briefed and argued orally, the matter is now ripe for disposition.

I.2

Plaintiffs in the underlying case are (i) Jordan Fishman, a Florida citizen, and three companies he owns and controls, namely (ii) Tire Engineering and Distribution, LLC, a Florida Company, (iii) Bear-cat Tire ARL LLC, also a Florida company, and (iv) Bcatco A.R.L., Inc., which is incorporated under the laws of the Jersey Channel Islands. During times relevant to this litigation, plaintiffs were in the business of designing, manufacturing, and selling highly specialized tires for use on underground mining vehicles,

There were two sets of defendants in the underlying litigation. The first set, collectively referred to as the “A1 Dobowi defendants,” comprises: (i) A1 Dobowi Tyre Co. LLC, (ii) A1 Dobowi Ltd, (iii) TyreX International, Ltd., and (iv) TyreX International Rubber Co., Ltd., all of which were headquartered in the United Arab Emirates and owned by Surender Kandharia, a Dubai citizen. The second set of defendants, collectively referred to as the “Linglong defendants,” comprises (i) Shandon Ling-long Rubber Co., and (ii) Shandong Ling-long Tire Co., Ltd., both of which were incorporated in China. At all relevant times, the Dobowi and. Linglong defen[304]*304dants were engaged in the business of designing,' manufacturing, and selling rubber tires, including underground mining tires.

By 2009, Jordan Fishman had become convinced that, his head of sales had conspired with plaintiffs’ competitors, the A 1 Dobowi: and Linglong defendants, to steal plaintiffs’ copyrighted underground mining tire blueprints and designs and then to sell knock-off copies of plaintiffs’ tires around the world, thereby damaging plaintiffs. Accordingly, Fishman sought counsel to vindicate plaintiffs’ rights, and on August 4, 2009, Fishman signed an Engagement Letter with the Gilbert Firm. This Engagement Letter, drafted by the Gilbert Firm, provides for two alternative fee arrangements, specifically as follows:

(i) in the event that the Gilbert Firm represented plaintiffs through resolution of the dispute, the Engagement Letter provides that plaintiffs would pay the Gilbert Firm a contingency fee equal to 40% of the gross amount of any sum recovered, and plaintiffs would reimburse the Gilbert Firm for “all costs and expenses related to this matter from the gross amount received by it”; or
(ii) in the event plaintiffs terminated the Gilhert Firm’s representation of plaintiffs prior to the resolution of the dispute, the Engagement Letter includes a termination provision, which provides that the Gilbert. Firm “will be entitled to a fee based upon the hours expended by the Firm on this representation at the hourly rates normally charged by the involved personnel for the type of work rendered” and that plaintiffs will reimburse the Gilbert Firm “for all out-of-pocket expenses and disbursements incurred by the Firm” in connection with the Gilbert Firm’s representation of plaintiffs.3

Engagement Letter. From the date plaintiffs retained the Gilbert Firm until plaintiffs discharged the Gilbert Firm in or around October 2011, plaintiffs’ case was handled chiefly by Matteis, as lead counsel, and by Copley. Other Gilbert Firm lawyers assisted Matteis and Copley, but played less substantial roles in the case.

On October 28, 2009, plaintiffs filed two complaints in this district, one against the A1 Dobowi defendants and one against the Linglong defendants. After.the two suits were promptly consolidated, the parties briefed and argued various threshold motions and then proceeded to conduct discovery. After completion of discovery, defendants sought summary judgment on all nine counts and succeeded on four counts. Plaintiffs then proceeded to trial on the remaining counts: (i) violation of the Copyright Act, 17 U.S.C. § 101, et seq., (ii) violation of the Lanham Act, 15 U.S.C. § 1051, et seq., as to'registered marks, (iii) violation of the Lanham Act as to unregistered marks, (iv) common law conversion, and (v) common law civil conspiracy.

During the six-day trial, the parties presented live and videotaped testimony from a number of witnesses, substantial documentary evidence, and competing expert testimony on the issues of infringement and damages. In the end, the jury returned a verdict in favor of plaintiffs, awarding plaintiffs $26 million in damages jointly and severally against all defendants. Defendants’ post-verdict Rule 50 [305]

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Cite This Page — Counsel Stack

Bluebook (online)
178 F. Supp. 3d 300, 2016 U.S. Dist. LEXIS 47780, 2016 WL 1441350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-outsidewall-tire-litigation-vaed-2016.