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Case number 17-7012, En-Hal.

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Deborah D. Peterson, personal representative of the estate of James C. Niple of the East, En-Hal, versus Islamic Republic of Iberia, En-Hal, Cook Collection Attorneys PLC, En-Hal Appellant.

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Mr. Miller, for the Appellant Cook Collector Attorneys PLC.

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Mr. Storch, for the Appellant James Glenn.

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Mr. Vail, for the Appellate

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Good morning, Your Honors.

[00:00:51] Speaker 03:
Good morning.

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May it please the Court, Eric Miller, on behalf of the lienholder appellants, David J. Cook and Cook Collection Attorneys.

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Based on the record, it's undisputed that Mr. Cook was the source of $1.89 billion of funds that was recovered for the plaintiffs on their judgment.

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Paragraph 9 of the Cook Retainer Agreement provides that any funds recovered

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are to be remitted into a joint escrow account and Cook is to be paid first.

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Paragraph 9 makes clear that Cook's fee is to be paid from the judgment recovered.

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There is no language in the Cook retainer agreement that suggests that Cook is to be paid out of litigation attorney's fee.

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So the sole issue presented is whether plaintiffs or parties who are bound by the contract.

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under basic principles of contract interpretation.

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A writing must be interpreted as a whole, giving reasonable, lawful, effective meaning to all of its terms in light of the circumstances surrounding the parties at the time the contract was made.

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This is an enforcement contract that was entered into after the judgment

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to bring about a recovery, which specifies Cook is to be paid first.

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The nature of the contract and the mechanics of payment of Cook's fee strongly suggests that the plaintiffs were intended to be parties.

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The plaintiffs are specifically identified as parties in the arbitration provision

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because they are paying his fees in terms of recovery.

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What is the status of the arbitration?

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Excuse me.

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Is that going on now, the arbitration?

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I'm sorry.

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The arbitration, what is the status of the... The status of the arbitration... Between your client and lead counsel?

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We have completed the factual, the evidentiary portion of the arbitration, and it's in briefing now.

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Well, so what's the relationship between that and this case?

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Why should the courts, you're asking the court here to exercise equitable authority to recognize a lien.

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Why should they do that in your case since the arbitration proceedings are underway and halfway through?

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Well, because the money is in the QSF trust and in order to effect

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to have an effective remedy, we need our lien.

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And we're entitled to the lien under our contract with the plaintiffs and the attorneys.

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I'm not sure I follow that because if the money's in a trust and the purpose of to make sure that the plaintiffs, the party that the council represented doesn't abscond with the money, the money presumably will be held until the lawyer's fee is determined or not.

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No, that's not true.

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The trust is being administered by the New York District Court and that money could leave the trust.

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We have been asking the New York Court on an attorney lien in the New York Court under Section 475 of the New York Judiciary Law

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But that court hasn't agreed that we have the attorney lien there.

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But if you're right about your- Wait, are you seeking an attorney lien against this?

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So you're basically pressing the same claim there that you're pressing here?

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This is a different lien here.

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This is a different lien right.

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My client, the argument in the New York court was that my client was never, never appeared pro habbiti.

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In this court, my client did appear pro habbiti and is entitled to lien rights in this, provided that the plaintiffs agreed to give him a lien.

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And what we're showing here is that the plaintiffs have agreed to give him a lien and that he is entitled to his lien right here.

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But if we, if, if,

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For us to decide—I'm confused by what you just said—whether or not the plaintiffs have agreed to lien, we have to look to their agreement with lead counsel, don't we?

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That's what we look to see.

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And that agreement says very clearly several times,

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that the plaintiffs are not, although they've agreed to lead counsel hiring your client, that makes very clear in several places that the plaintiffs are not responsible for any of the expenses in connection with that retainer.

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We believe that that clause can also be interpreted as simply a cost plus fee, or fee plus cost agreement, where it says that unless... Paragraph three, client shall have no liability

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for any expenses in connection with the preparation of this lawsuit.

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All such expenses shall be the sole obligation of the attorneys.

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I mean, the attorneys will, under no circumstances, represent to any vendor, supplier of services, that's your client, or contractor that they are incurring expenses on behalf of the plaintiffs.

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It says it three times.

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I believe it can be interpreted as simply assuring the plaintiffs that under no circumstances, unless there's a recovery, will costs be paid.

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Now, the other aspect to this... Wait, wait.

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It doesn't say that.

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It doesn't say that they are occurring under no circumstances, unless there's a recovery.

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You wrote that in, right?

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It's not in the agreement.

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The agreement says what it says, and the agreement, I believe, can be interpreted to say just what I've said, which is that no cost will be incurred

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to the plaintiffs and plaintiffs will not be responsible unless there's recovery, at which point costs can be paid to whether it's lobbyists or all the other people that were responsible for this judgment.

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So those costs can be paid.

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I think the other critical point here is that the underlying agreement was not shown to my client.

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So there's another analysis here that would be actual authority.

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The other analysis is was there apparent authority and was there ratification and estoppel.

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And we have a declaration that was submitted to the district court showing the apparent authority and estoppel.

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And those would be another basis upon which the plaintiffs would be bound.

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Thank you.

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I see I have a few more minutes.

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You can go ahead.

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You didn't say anything.

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I thought you were done.

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I wonder why your client needs a lien in this case.

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I'm just having a little trouble.

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I mean, is there any question that litigation attorneys are

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going to be insolvent or will be not reachable out of jurisdiction or will spend the money.

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We don't see cases between lawyer and lawyer.

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Well, it's the whole purpose of a lien right, Your Honor.

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The whole purpose of that is that

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No, I don't know that they are insolvent, but the whole purpose of a lien is to have a property right claim against that, an equitable claim against that, until we have our determination.

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And the money is about... But why would one need that in the absence... I mean, I understand that it's a general matter why the law so provides, but I'm trying to understand in this case, other than leverage, what protection would you need from any such...

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Well, because without the lien, the money gets dispersed to the various attorneys, and there are many of them out there that are going to get this money.

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And then we have a collection proceeding going on after that.

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The lien protects that.

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The lien stops.

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that whole, another round of a collection proceeding after these lawyers.

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Yes, they may come forward and pay it, but... The lien doesn't stop it.

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Presumably, the lien would be in place until, I mean, you still have to make calculations in order then to release the funds that are subject to the lien.

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That's right.

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So, in either event, you have to have the final litigation that establishes the details of the amount.

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that each service provider is entitled to, no?

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That's right.

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In effect, what it will do is stop distribution out of the trust until our clients have their judgment on that, and then we can go to the trust with that judgment and recover.

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That's a simple answer to it, and otherwise the money will get distributed out of the trust, and then we've got collection of proceedings against a handful of lawyers to try to recover that money.

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That's the whole purpose of the loan fund.

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Just curious, what is the status of the distribution from the trust?

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Excuse me?

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What is the status of the trust at this point?

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The trust is on the verge of distributing the money to the attorneys.

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Most of the money has been distributed to the plaintiffs, but the attorneys' money has been held up on that.

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And so we're talking about a period of three to six months.

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Why has the money been held up?

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Excuse me?

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You said the money has been held up?

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Well, the money has not been distributed.

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There have been a number of different claims against that money in the USF Trust.

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One of them is our claim, but there are many others.

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And you'll see there is another claim here from Mr. Klen.

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So that money has been held up pending that.

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But we're talking about a period of about six months until this is resolved.

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And that's the requested lien right.

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That's what we have a right to.

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Anything else?

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I don't think so.

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True.

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Thank you.

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I'm probably over my time.

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Yeah, you are.

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Thank you.

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So we'll hear from Mr. Bales now in response to your argument, then we'll move on to Glenn, okay?

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Good morning, may it please the court.

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I'm John Vale for the plaintiffs in this case.

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And there are two elements to the equitable lien that's being sought here.

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One is an agreement with the client.

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Two is an agreement with the client that the funds paid to an attorney

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be paid be paid from the clients from the Corpus recovered.

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What interest to your clients have in resisting the lean.

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Well they have as any person does they have an interest in not having.

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their funds sequestered for a dispute about with which they have nothing to do.

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We've heard that they're actually getting paid or have been paid, that those aren't being held up.

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There are some monies that have been paid.

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There are some monies that have been retained.

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There are monies retained to pay claims that lawyers have against the clients.

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The participants here have all participated in a process before the district court in New York.

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Judge Forrest appointed a special master.

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The special master has made a report to the district court.

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The time for objections to the special master's report has passed.

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And now we're awaiting an order from Judge Forrest about her resolution of, in part, the same disputes, analogous disputes, that are here.

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I don't want to say the same because here the liens are claimed as a matter of D.C.

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law.

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I'm just curious why we're here, why this isn't something that could be dealt with by an agreement among all the claimants on the attorney's fee portion to keep it in trust until the

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allocation has worked out, or to keep enough of it in trust, the disputed part in trust until the allocation has worked out.

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I understand you have many people who are involved in a complex process of litigation, and I'm just curious why you would be fighting this on behalf of plaintiffs, given the posture of the case.

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Because the plaintiffs feel duties to the lawyers who have represented them for the past 15 years.

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This is a unique situation, Your Honor.

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The plaintiffs here are mostly Marines, and the brotherhood idea of the Marines shows through in all the actions they've taken.

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They feel these duties to people who have been with them from the long beginning of this case and the unlikelihood of recovering anything from the Islamic Republic of Iran.

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And they want to do that.

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They want to pay these people.

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The claims involved here are huge.

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I am not certain of the present magnitude of Mr. Glenn's claim.

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But at one point, it ranged to $60 million.

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Mr. Cook's claim at one point was $210 million.

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So the sums involved are huge.

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They interfere with distribution to a small army of lawyers.

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who did basically damages proofs in these cases.

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They took those cases on contingency, and it's almost two years since the Supreme Court has said that they should be paid, that the plaintiff should be paid.

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And these people are still waiting for their money, and the plaintiffs want to pay them.

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Wait a minute.

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I thought you said that most of the money had been distributed to the plaintiffs.

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Much of the money has... That's what you said when I asked you the question.

[00:15:50] Speaker 05:
Well, that was, I believe, Mr. Miller.

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Much of the money has been distributed, but some of the money is still being retained by Judge Sporkin, who is the trustee of the QSF.

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And is this litigation the holdup, or there are other?

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This litigation, I believe.

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The New York litigation also.

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I would represent to the court that this litigation is part of the holdup, yes.

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And it seems like that's within your power to dispel.

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I mean, the clients should be able to have their money.

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Your Honor, in the suggestion of mootness that we filed, we have filed a transcript from the arbitration in which

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The litigation attorneys have agreed to assume responsibility for anything that is awarded to Mr. Cook.

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the litigation attorneys are trying to insulate the plaintiffs.

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In other words, it won't come out of the plaintiff's pocket.

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That's correct.

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But Mr. Cook has never asserted that it would.

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But yes, he has asserted because of the nature of this lien.

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You noted that you don't see many cases between attorneys.

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That's because inequitable charging lien in D.C.

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does not exist between attorneys.

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He has no lien.

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Do you know what percentage of the total recovery goes to the lawyers?

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Do we know that?

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Has that been resolved?

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Yeah, that was— That number's resolved, right?

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That was clear that it was, yes.

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And Cook and Glenn have agreed that whatever they—or the lawyers have—your client—

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Lee counsel has agreed that whatever these two lawyers get comes out of their pockets, not out of their recovery, out of their fee, not the plaintiff's, right?

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Well, I can't say there's an agreement with that, with Mr. Glenn.

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They've announced that.

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Yeah, they haven't announced that.

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They have with Mr. Glenn.

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Then given that, why isn't, why, I don't understand then why this case is delaying the distribution of all

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of the funds from the fund to the plaintiffs.

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I just don't see why that's the case.

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Nor do I, Your Honor, but that would have to be a question for Judge Sporkin and his counsel.

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It's a question we have posed to Judge Sporkin and his counsel.

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Because earlier, as I understood it, one of the points you were making was that uncertainty about the amount that's owed to, say, Cook is a reason that the plaintiffs might resist

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this kind of proceeding because they don't want to be, they don't want to have their recovery subject to ambiguity about what share of that recovery should be taken aside to give to Cook.

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The plaintiff's estimation of liability to Mr. Cook might be two orders of magnitude less than the amount of the lien that Mr. Cook claims.

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So it's the amount of the lien, because if everybody agrees that whatever Cook recovers comes out of the lead attorney's share.

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Which has been agreed.

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Then it shouldn't matter to the plaintiffs, because then they know what's going to be locked off for lead counsel, and then all we're talking about is how that amount is allocated as amongst the various counsel that have a stake in that pot.

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But there's still the issue of timing, which is a concern to the plaintiffs.

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And this is their money.

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They get to do what they would like to do with it.

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They're the clients, right.

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So in DC, an attorney has a charging lien where the attorney is

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representing a client and the client and the attorney understand that the attorney is going to be paid out of the case's proceeds.

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There's a, let me take issue with that.

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It's where the attorney is retained by the client.

[00:20:04] Speaker 06:
Right.

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Attained by the client or surely, I mean, an agent of the client.

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If you're retained by a client, you're representing the client.

[00:20:14] Speaker 05:
Well, not for purposes of the equitable lien.

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Let me analogize to a law firm.

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Under the theory that Mr. Miller and Mr. Storch would advance,

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each associate not so it's a legal entity.

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So if you have a lawyer who's representing a plaintiff litigation attorneys and they seek to bring on and they are empowered by their contract with the plaintiffs to bring on other counsel.

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My question is aren't those other counsel counsel for the plaintiffs.

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They're not for example counsel

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doing you know contract work for the litigation attorneys writing their contracts with the plaintiffs.

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They're doing legal work for the plaintiffs.

[00:21:01] Speaker 05:
That's Democratic Central Committee answers that question.

[00:21:04] Speaker 06:
Not exactly because in Democratic Central Committee the court said at the outset that the lien that the

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that the subsidiary attorney was seeking was a lien against the primary attorney.

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And they said, therefore, this issue doesn't even arise.

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And then there's dictum about charging liens more generally.

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But that's a very different situation.

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That's more like a lawyer that the primary lawyer hires to write up its contracts as distinct from here, where counsel peers pro hoc for

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litigation counsel.

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Counsel presumably has attorney-client privilege because there are lawyers for the client, and so there is an attorney-client relationship, and of course it's mediated through the supervision of litigation counsel, but the underlying question of who are they representing seems to me the answer is at least arguably that they're representing the plaintiffs.

[00:21:56] Speaker 05:
It's very clear that the plaintiffs authorized the lead counsel

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to employ other attorneys, in part, to represent them.

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It is also clear that they said, you cannot do that at our expense.

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It's clear in the contract.

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And it's also, as a matter of law, Fay and Perlis had a pre-existing legal duty to the plaintiffs to do the collection work on their behalf

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for the contingent fee that they were supposed to receive.

[00:22:32] Speaker 06:
Right, and that's why all council here, nobody disputes that the percentage of the percentage that Cooke is claiming comes out of Fay and Perlis' money.

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So it's coming out of the award as a tranche of Fay and Perlis' money.

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So it is coming out of the award.

[00:22:57] Speaker 06:
So if you're a lawyer thinking, am I going to go do this work under the umbrella of lead litigation attorneys?

[00:23:02] Speaker 06:
And you're thinking, do I need to write some special security in?

[00:23:06] Speaker 06:
You think, no, I don't, because my money is coming from what we recover.

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That will be on the table.

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That will be there.

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And even if Fay and Pearls goes bankrupt, my money is coming out of the recovery as a percentage that has been allocated to me by Fay and Pearls.

[00:23:23] Speaker 05:
No, because the plaintiffs have not authorized that distribution of their money.

[00:23:33] Speaker 03:
No, but isn't that the Glenn case?

[00:23:34] Speaker 03:
They could have.

[00:23:35] Speaker 03:
Isn't that the Glenn?

[00:23:37] Speaker 03:
It's Glenn who's claiming a lien against lead counsel's portion of the recovery, of the fee, right?

[00:23:45] Speaker 03:
Yes, it is.

[00:23:46] Speaker 03:
Cook is arguing here, as I understand it, that there's

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an equitable contractual right to a percentage of what the plaintiffs, right?

[00:24:02] Speaker 05:
I think, I would think that, I think you can, that Mr. Cook is also now arguing.

[00:24:09] Speaker 03:
Now he is, yes.

[00:24:10] Speaker 05:
That he's entitled to that tranche.

[00:24:12] Speaker 05:
Yes, now he is.

[00:24:13] Speaker 05:
But again, this is the plaintiff's money.

[00:24:18] Speaker 05:
They control it.

[00:24:20] Speaker 05:
They didn't authorize it.

[00:24:22] Speaker 05:
And nothing in DC law

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recognizes that kind of lien.

[00:24:29] Speaker 03:
The lien simply does not exist.

[00:24:31] Speaker 03:
Mr. Mills, you're way over.

[00:24:33] Speaker 03:
You can have your time after Mr. Storch argues, okay?

[00:24:40] Speaker 05:
Thank you.

[00:24:40] Speaker 03:
So did counsel have any time left?

[00:24:46] Speaker 03:
No, you can take one minute, Mr. Miller.

[00:24:48] Speaker 06:
One minute.

[00:24:51] Speaker 03:
Miller.

[00:24:52] Speaker 06:
Oh, right, right, right.

[00:24:55] Speaker 03:
Rebuttal by Mr. Miller.

[00:24:56] Speaker 03:
Rebuttal.

[00:24:56] Speaker 03:
One minute.

[00:24:57] Speaker 03:
If you want.

[00:24:58] Speaker 04:
Well, I'll be very quick.

[00:25:01] Speaker 03:
Right.

[00:25:01] Speaker 04:
That's why I said a minute.

[00:25:03] Speaker 04:
Let me just clear something up.

[00:25:05] Speaker 04:
There has been an understanding between all of the claimants as to the QSF Trust that nobody is making a claim as to plaintiff's proceeds.

[00:25:15] Speaker 04:
And they can be distributed.

[00:25:16] Speaker 04:
There's no delay in that.

[00:25:17] Speaker 04:
There are issues within the Trust, but it has nothing to do with any of our claims.

[00:25:22] Speaker 04:
So it is questionable as to

[00:25:27] Speaker 04:
whether counsel is here really on behalf of the lawyers or on behalf of the plaintiffs, because they don't really have an issue here.

[00:25:43] Speaker 06:
But you were seeking a charging lien under D.C.

[00:25:47] Speaker 06:
law against that portion of the plaintiff's recovery that would cover your fee claim.

[00:25:56] Speaker 06:
That's right.

[00:25:56] Speaker 06:
You're seeking a lien against the plaintiffs, not against Fay and Merlis.

[00:26:01] Speaker 06:
I mean, I know functionally those are sort of collapsing given the posture, but...

[00:26:04] Speaker 04:
Yeah, that's our view.

[00:26:05] Speaker 04:
The charging wing can be limited, and we're perfectly agreeable to that, limiting it to not the plaintiff's proceeds directly, but only that share of the proceeds that go to the litigation attorneys.

[00:26:21] Speaker 04:
So nobody wants to hold up money for the plaintiffs.

[00:26:24] Speaker 04:
And I think everybody, all council are in agreement on that.

[00:26:28] Speaker 04:
So that would be the limitation.

[00:26:32] Speaker 04:
That's how we would understand it.

[00:26:33] Speaker 04:
Since we've agreed that they will be responsible for the award, then we can simply limit that lien to their share of the fees to make sure that there's no interference with any remaining distributions to the plaintiff.

[00:26:48] Speaker 04:
But my understanding is that something in the range of 95% that's been distributed to the plaintiffs

[00:26:53] Speaker 04:
So there really is no issue for the plaintiffs here today.

[00:26:56] Speaker 04:
They don't have a dog in the site.

[00:26:58] Speaker 03:
All right.

[00:27:00] Speaker 03:
Okay.

[00:27:00] Speaker 03:
So now we'll hear from Mr. Storch, right?

[00:27:07] Speaker ?:
Okay.

[00:27:10] Speaker 02:
Good morning, Your Honors.

[00:27:11] Speaker 02:
May it please the Court, Stephen Storch, for Appellant J. Glenn.

[00:27:16] Speaker 02:
First, I think it's clear, but I just want to reiterate, Mr. Glenn, who is a war veteran, has been very explicit below that he does not want a penny from the plaintiffs.

[00:27:26] Speaker 02:
His claim and his claim for a lien is against the portion that is owed to Fay and Perlis.

[00:27:33] Speaker 02:
The way the QSF has been set up is the trustee is distributing money to the plaintiffs on their claims and then is making separate distributions to the attorneys on their claims.

[00:27:46] Speaker 03:
And has that process begun?

[00:27:47] Speaker 02:
The process has begun.

[00:27:49] Speaker 02:
What has slowed it up are a number of things, including some of the plaintiffs

[00:27:52] Speaker 02:
did not have the correct information as to their whereabouts.

[00:27:56] Speaker 02:
They were trying to trace down beneficiaries.

[00:27:58] Speaker 03:
No, that wasn't my question.

[00:28:00] Speaker 03:
My question was, has some of the funds been distributed to the attorneys?

[00:28:04] Speaker 02:
Yes, it has.

[00:28:04] Speaker 02:
Some of the funds have been distributed to the attorneys.

[00:28:07] Speaker 03:
What percentage would you say?

[00:28:09] Speaker 02:
I don't know the answer to that.

[00:28:11] Speaker 02:
We've been trying to get that information.

[00:28:13] Speaker 02:
We don't have that.

[00:28:15] Speaker 02:
Mr. Glenn's claim against... Is that why you want to lean?

[00:28:18] Speaker 02:
Correct.

[00:28:19] Speaker 02:
And Mr. Glenn's current claim

[00:28:21] Speaker 02:
Against these funds is $11,267,000 and change based on the pro rata distribution that is being distributed out from the fund.

[00:28:33] Speaker 02:
So we're able to calculate Mr. Glenn's fee.

[00:28:36] Speaker 02:
It does not in any way impair the money that would go to the plaintiffs.

[00:28:40] Speaker 02:
It's been held up.

[00:28:41] Speaker 03:
And just out of curiosity, why does Lee counsel think Mr. Glenn is not entitled to that?

[00:28:48] Speaker 02:
Well, Mr. Glenn was a damage attorney.

[00:28:50] Speaker 02:
Their answer is you didn't do the work well.

[00:28:52] Speaker 02:
I see.

[00:28:53] Speaker 02:
As we have in the record below, Mr. Glenn did 41 depositions on the damages case.

[00:28:59] Speaker 02:
He met with clients that we've laid out in the record what he did.

[00:29:03] Speaker 02:
And the fan, Pearl, his answer is we don't think you did the job.

[00:29:06] Speaker 06:
Have those calculations been used to compensate those plaintiffs?

[00:29:11] Speaker 06:
The evidence that Mr. Glenn presented and the proceedings in which he represented those plaintiffs on damages issues, has that evidence in those findings been used to distribute to those plaintiffs?

[00:29:24] Speaker 02:
I don't believe so.

[00:29:24] Speaker 02:
It's been presented to the trustee overseeing the QSF trust.

[00:29:28] Speaker 02:
I don't know.

[00:29:30] Speaker 02:
The way the distributions are made is somewhat opaque to us.

[00:29:34] Speaker 02:
We would deny intervention in that proceeding so we don't get all the information as to what's going on, much of it's under seal.

[00:29:42] Speaker 02:
But I think the fact that we're not going after the plaintiff's the plaintiff's money is extremely important here because I don't even think we need to discuss this in terms of an attorney charging lien.

[00:29:53] Speaker 02:
I think this is really a traditional equitable lien.

[00:29:56] Speaker 02:
But your problem is DCC, right?

[00:29:59] Speaker 03:
Is this court's opinion in DCC?

[00:30:01] Speaker 02:
Yes, and I don't think it's a problem because DCC is different.

[00:30:04] Speaker 02:
Why is DCC different?

[00:30:07] Speaker 02:
The attorney who retained the other attorney said, I'm going to pay you out of the legal fees I get in the fair.

[00:30:15] Speaker 03:
Well, that's what the retainer between lead counsel and the plaintiff says.

[00:30:20] Speaker 02:
Right, but in DCC, the attorney filed his lien not against the fund of the attorney's fees in one case.

[00:30:27] Speaker 02:
He actually filed his lien against the fund created in another case.

[00:30:31] Speaker 02:
And what they said in DCC, and it really is a dictator, because ultimately DCC said, hey, we're not in power to decide the attorney fee issue.

[00:30:40] Speaker 02:
But in DCC, they said, yeah, the plaintiffs never agreed that you could take money out of that other fund.

[00:30:47] Speaker 02:
The only agreement you're pointing to

[00:30:49] Speaker 02:
is an agreement with an attorney to take it out of a different fund.

[00:30:52] Speaker 02:
So you're asking us to make two jumps here.

[00:30:54] Speaker 02:
One, that the attorney could bind the clients.

[00:30:57] Speaker 02:
And two, that somehow we should shift the agreement now to a different fund.

[00:31:01] Speaker 02:
The district court relied on another case, the Hogan case out of the Ninth Circuit.

[00:31:06] Speaker 02:
And that's a similar issue.

[00:31:08] Speaker 02:
There, there was an agreement between the attorney that the attorney was going to pay the other attorney a co-counsel fee.

[00:31:14] Speaker 02:
That attorney, who was supposed to pay the fee, went bankrupt.

[00:31:18] Speaker 02:
He was also disbarred.

[00:31:20] Speaker 02:
The attorney who claimed he was owed money went into the bankruptcy court and his claim was discharged.

[00:31:25] Speaker 02:
He was denied it because of the bankruptcy.

[00:31:27] Speaker 02:
He then went and filed the lien against the client's money saying, hey, I should be paid out of your money.

[00:31:34] Speaker 02:
But the district court in Hogan in the Ninth Circuit said, well, wait a minute.

[00:31:37] Speaker 02:
You can't backdoor your claim now.

[00:31:39] Speaker 02:
Your claim is against the attorney.

[00:31:41] Speaker 02:
Now you're trying to generate a claim against the client's.

[00:31:44] Speaker 02:
who you don't have a direct claim against.

[00:31:47] Speaker 00:
So you're drawing a distinction between a lien that would be asserted against the ultimate clients, the plaintiffs, and a lien that would be asserted against the attorneys.

[00:31:55] Speaker 00:
And there's the attorney charging lien, which seems like, just as a general matter, it goes against the clients.

[00:31:59] Speaker 00:
And then there's the equitable lien, as you described it, which goes against the attorneys.

[00:32:03] Speaker 00:
Correct.

[00:32:04] Speaker 00:
Were the, in the proceedings below, I thought the proceedings below were really about an attorney charging lien.

[00:32:09] Speaker 02:
We also raised the equitable lien argument below.

[00:32:11] Speaker 02:
Maybe we didn't emphasize it enough, to be honest, but we did raise that there was an equitable lien, and we emphasized that we're not going against the client's money, that this dispute is between us and the attorneys.

[00:32:22] Speaker 02:
And in fact, I don't think there was a dispute down below.

[00:32:25] Speaker 02:
Occasionally, the Thay and Pearl will say, hey,

[00:32:28] Speaker 02:
You're trying to stop the distribution.

[00:32:32] Speaker 02:
But even in their own brief, I think their brief on page three, in this case, acknowledges, yeah, the money's supposed to come out of our share.

[00:32:39] Speaker 00:
Is there any indication that the district court understood that you were asserting an equitable lien against them separately?

[00:32:44] Speaker 00:
of money that went to the attorneys as opposed to the money that was going to the plaintiffs?

[00:32:49] Speaker 00:
Because I understood the court to assume that you were asserting an attorney charging lien.

[00:32:52] Speaker 02:
They did.

[00:32:53] Speaker 02:
They did.

[00:32:54] Speaker 02:
But we did have a two-pronged assertion there, the charging lien and the equitable lien.

[00:32:58] Speaker 02:
If I may, on the charging lien, we also pointed out that

[00:33:02] Speaker 02:
We actually have the agreement of the clients.

[00:33:05] Speaker 02:
Mr. Glenn put in an affidavit below that said, when I signed these 33 clients up, I told them that my percentage would be one-third of the Fay and Perlis fee and that I would be paid out of that fee.

[00:33:21] Speaker 02:
And he had, we submitted, I think it was 33 contracts,

[00:33:25] Speaker 02:
that had the client's signature on it and Mr. Glenn's signature on it.

[00:33:30] Speaker 02:
Now, it didn't say about the one-third of the Fey and Perlis.

[00:33:33] Speaker 02:
It just said that Fey and Perlis were being retained.

[00:33:36] Speaker 02:
But as Judge Lamberth below acknowledged, an oral agreement is sufficient for purposes of an attorney charging lien.

[00:33:44] Speaker 03:
But not when the retainer between the lawyer and the client is clear, clearly to the contrary.

[00:33:54] Speaker 02:
It's not exactly, because as we pointed out, the contract said that we're going to retain other attorneys.

[00:34:02] Speaker 03:
So it's not contrary to come in and say... But not... But that the plaintiffs would not be responsible for any of the expenses of those attorneys.

[00:34:10] Speaker 02:
But they're not.

[00:34:11] Speaker 02:
The plaintiffs aren't.

[00:34:11] Speaker 02:
We're not going after the plaintiffs.

[00:34:13] Speaker 02:
We're not asking the plaintiffs for a dime.

[00:34:16] Speaker 03:
We are saying... That's why the problem you have is the DCC case.

[00:34:22] Speaker 03:
We're in DCC land here, right?

[00:34:24] Speaker 02:
No, because DCC, they were actually going after the client's money.

[00:34:28] Speaker 02:
In DCC, the agreement was for a specific fund of attorney's fees that the attorney was supposed to get.

[00:34:36] Speaker 02:
For whatever reason, maybe that fund was too small or didn't materialize, then the attorney said, you know what, the clients have this money in this other bank trust account, and we want that.

[00:34:46] Speaker 02:
And the court said, you can't get that.

[00:34:48] Speaker 02:
At best, your agreement says you're entitled to the fees that are generated from that other case.

[00:34:53] Speaker 02:
So that's why I think DCC really is distinguishable.

[00:34:57] Speaker 02:
And I think Allam, subsequent to the DCC case, articulated that, you know, don't treat these attorney liens as different than an equitable lien.

[00:35:06] Speaker 02:
Because what you have here is a situation where

[00:35:08] Speaker 02:
You know, the money goes to Fay and Perlis.

[00:35:12] Speaker 02:
And, you know, to Judge Pillard's question, they're already fighting between themselves.

[00:35:18] Speaker 02:
There are all sorts of competing claims.

[00:35:20] Speaker 02:
The purpose of the lien is to protect you from having to go and do all those fights.

[00:35:27] Speaker ?:
I see.

[00:35:27] Speaker 02:
Okay.

[00:35:27] Speaker 02:
Thank you.

[00:35:28] Speaker ?:
Okay.

[00:35:28] Speaker ?:
Thank you.

[00:35:36] Speaker 05:
Let me begin by addressing a fundamental legal point here.

[00:35:44] Speaker 05:
Mr. Storch is distinguishing between a charging lien and an equitable lien.

[00:35:51] Speaker 05:
They are not different things.

[00:35:54] Speaker 05:
D.C.

[00:35:54] Speaker 05:
has no statutory attorney lien.

[00:35:58] Speaker 05:
It recognizes at equity one lien

[00:36:03] Speaker 05:
one lien only, an equitable charging lien that has two elements to satisfy.

[00:36:11] Speaker 05:
An agreement with the client to be retained and an agreement with the client that the attorney be paid from a corpus recovered in the action.

[00:36:23] Speaker 00:
what's the so that i understand that means that there could never be an equitable lean against attorneys for fees that they owe to other attorneys not in d.c.

[00:36:33] Speaker 00:
d.c.

[00:36:33] Speaker 00:
does not recognize that there could be these people both of these things really that that just seems that just seems like a natural equitable instrument

[00:36:43] Speaker 00:
Why would it be the case under law that you could attach a lien against clients but you couldn't attach a lien against attorneys?

[00:36:51] Speaker 05:
Because equity was concerned with the client using excess power by having command over the corpus against the lawyer.

[00:37:06] Speaker 05:
that's not so between lawyers and the lawyers between each other are both sophisticated players.

[00:37:13] Speaker 05:
DC will recognize a contractual lien.

[00:37:17] Speaker 05:
Judge Pillard noted that, that they could, these people could have bargained for a lien.

[00:37:25] Speaker 05:
They didn't.

[00:37:27] Speaker 06:
Isn't the same or is the same

[00:37:31] Speaker 06:
equitable concern present among lawyers where there's litigation counsel, as you put it, having excess power over the corpus against the lawyers who had a smaller role?

[00:37:45] Speaker 05:
One reason there is not is because of the ethical duty that lawyers have to sequester contested funds that are in their possession.

[00:37:56] Speaker 05:
So equity does not need to come to the rescue in that way.

[00:37:59] Speaker 06:
That's why I'm a little puzzled why you are resisting this.

[00:38:04] Speaker 06:
And also why there's not counsel on this fee matter separate from litigation counsel yourselves.

[00:38:15] Speaker 06:
You are counsel for the plaintiffs in the underlying action.

[00:38:19] Speaker 05:
That's correct.

[00:38:20] Speaker 06:
Now there's a fee dispute between various attorneys.

[00:38:25] Speaker 06:
it may or may not be in the plaintiff's interest to take a position that is in Fay and Perlis's interest.

[00:38:33] Speaker 06:
Why no separate counsel?

[00:38:35] Speaker 05:
We are clear.

[00:38:36] Speaker 05:
We are representing the plaintiffs and their interests.

[00:38:39] Speaker 05:
A fundamental rule of law is that the owner of property gets to control their own property.

[00:38:51] Speaker 05:
The plaintiffs here are resisting

[00:38:54] Speaker 05:
a foreigner, someone with whom they have no contractual relationship, exercising control over their funds.

[00:39:05] Speaker 05:
The QSF was created for the benefit of the plaintiffs.

[00:39:09] Speaker 05:
The trustee is a trustee for the plaintiffs.

[00:39:13] Speaker 05:
He's not a trustee for the lawyers.

[00:39:16] Speaker 06:
Is it litigation counsel's position that Mr. Glenn and Mr. Cook are entitled to no payment?

[00:39:24] Speaker 05:
litigation counsel have taken the position, have announced the position in the arbitration that indeed so, and that they will be responsible for it.

[00:39:34] Speaker 05:
That they're entitled to no payment.

[00:39:36] Speaker 05:
And litigation counsel.

[00:39:38] Speaker 06:
Did you say that they've taken the position that they're entitled to no payment?

[00:39:42] Speaker 05:
Well, they're taking their, they're resisting their payments in the arbitration, but if an award is made in the arbitration, litigation counsel will pay it.

[00:39:55] Speaker 05:
And I believe the same will be true.

[00:39:57] Speaker 05:
Mr. Glenn's claim is proceeding both

[00:40:02] Speaker 05:
He's got his position before the district court in New York.

[00:40:06] Speaker 05:
He's got a claim pending before the district court in DC over the matters that underlie this request for a lien.

[00:40:15] Speaker 03:
But he's not in the arbitration proceeding, right?

[00:40:19] Speaker 03:
No, he's in court.

[00:40:21] Speaker 03:
But you said that the statement lead counsel made about being responsible was made in the arbitration proceedings with Mr. Cook.

[00:40:28] Speaker 05:
Yes, so that I can represent that, you know, counsel will take the position that they are responsible for an award to Mr. Glenn in the same way.

[00:40:44] Speaker 05:
The lawyers here are seeking an extraordinary status under equity

[00:40:53] Speaker 05:
to which they clearly are not entitled under the law of the District of Columbia.

[00:41:00] Speaker 03:
And that's the only law applicable.

[00:41:02] Speaker 03:
If we agree with you that there's no lien, then what happens next in Glenn's case?

[00:41:12] Speaker 03:
I understand the other cases in arbitration.

[00:41:14] Speaker 03:
Does Glenn's claim get litigated in the district court?

[00:41:19] Speaker 05:
Glenn's claim will continue in the district court.

[00:41:21] Speaker 03:
Is that being litigated now?

[00:41:22] Speaker 03:
The issue, yes.

[00:41:23] Speaker 03:
Is that being litigated now?

[00:41:24] Speaker 03:
Is that going on in the district court now?

[00:41:27] Speaker 05:
Yes, there's a rule 26F conference on Friday in that case.

[00:41:34] Speaker 05:
I see.

[00:41:34] Speaker 05:
So here is simply about whether they are entitled to an extraordinary position of a protected creditor for which they could have bargained and did not.

[00:41:48] Speaker 06:
Have you received any payment of fees so far?

[00:41:53] Speaker 06:
Have I?

[00:41:53] Speaker 06:
No.

[00:41:54] Speaker 06:
Has the litigation counsel?

[00:41:55] Speaker 05:
Yes.

[00:41:57] Speaker 06:
And your retainer has an express lien in it, and you didn't assert that at any point?

[00:42:06] Speaker 03:
No.

[00:42:11] Speaker 03:
Okay, thank you.

[00:42:12] Speaker 03:
Did Mr. Storch, he had no time, right?

[00:42:15] Speaker 03:
Okay, one minute.

[00:42:21] Speaker 02:
Your Honor, the case is pending now between Judge Lamberth.

[00:42:25] Speaker 02:
Mr. Glenn has a claim for failure of Mr. Fay and Mr. Perlis to pay the fees.

[00:42:30] Speaker 02:
After we've fully briefed this appeal, Judge Lamberth denied the motion to dismiss the claim against Fay and Perlis, and that case is now pending.

[00:42:39] Speaker 02:
Its significance for this appeal is that in the ELAM court, as we cited, the court said

[00:42:45] Speaker 02:
stop making this artificial distinction between a lien and a cause of action.

[00:42:50] Speaker 02:
If you have a cause of action for fund, then there's no reason why there shouldn't be a lien.

[00:42:57] Speaker 02:
Mr. Fay and Mr. Perlis are actually asking to put themselves in an extraordinary position, which is, have the plaintiffs pay us the money that Mr. Glenn is claiming, and we'll take that money, and we'll say we don't think you did a good job, and we'll hold on to it and litigate with them.

[00:43:12] Speaker 02:
That's an extraordinary position.

[00:43:14] Speaker 02:
The liens come into operation not by express agreement, by operation of law.

[00:43:20] Speaker 06:
If Fay and Pearls were insolvent, I could see that you would need a lien.

[00:43:27] Speaker 06:
What is the practical need for a lien here?

[00:43:30] Speaker 02:
The practical need is first, the law doesn't require it, but second,

[00:43:33] Speaker 02:
There are competing claims.

[00:43:34] Speaker 02:
Fay and Perlis have litigated claims against each other for breaches of fiduciary duty, for having dissipated money, not done things properly.

[00:43:44] Speaker 02:
There are other attorneys that are out there that have actually put an affidavit claiming about difficulty in having gotten collections.

[00:43:52] Speaker 02:
It's just not a risk that Mr. Glenn should have to bear.

[00:43:57] Speaker 02:
It's simple.

[00:43:58] Speaker 02:
This is not their money.

[00:44:00] Speaker 02:
It's a portion of it.

[00:44:01] Speaker 02:
They could put it aside.

[00:44:03] Speaker 02:
in the QSF trust, not impact the plaintiffs.

[00:44:06] Speaker 02:
We could do our litigation in front of Judge Lamberth.

[00:44:09] Speaker 02:
We would be happy to do it on an expedited track.

[00:44:12] Speaker 02:
And then if we're successful, and we believe we will be, but there'll be money there for us to collect.

[00:44:17] Speaker 02:
It wouldn't be the first step in then having to go against Fey and Perlis, listening to them dispute, well, who owes what?

[00:44:24] Speaker 02:
You owe that much.

[00:44:24] Speaker 02:
I owe that much.

[00:44:25] Speaker 02:
Oh, I had to pay so-and-so.

[00:44:27] Speaker 02:
That then sets Mr. Glenn on years of litigation.

[00:44:31] Speaker 02:
which frankly is a tactic in defending against his claims.

[00:44:35] Speaker 02:
So that's why we ask for equitable help in this regard.

[00:44:38] Speaker 03:
OK.

[00:44:38] Speaker 02:
Thank you.

[00:44:39] Speaker 03:
Thank you all.

[00:44:39] Speaker 03:
Case is submitted.