Law firms hit ex-NFLers with settlement liens
|Former NFL player Kevin Turner leaves a Senate committee hearing in 2014. Turner, who died last year, said in a 2015 email he was worried about being double charged by his law firm.
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Less than a year before he would die of the brain disease chronic traumatic encephalopathy, former NFL player Kevin Turner, whose name resided atop the concussion litigation threatening the sport, emailed his lawyer, worried that the law firm might double charge him and others.
The NFL planned to pay $112.5 million in legal fees as part of an emerging settlement, but thousands of players like Turner signed earlier contracts with counsel that included contingency fees of up to 45 percent of any payout. That means lawyers would get paid both from the NFL fund and from the players who signed contingency fee contracts.
Law firms have filed more than 320 requests to place liens on former NFL players for alleged work the firms did for the retirees as part of concussion litigation.
|Law firm||Number of player lien requests*|
|Goldberg Persky & White||20|
|John D. Giddens||18|
|Smith & Stallworth||16|
|Berkowitz & Hanna||2|
|Wayne Ferrell Law||1|
* From February 2016 through last week
Source: Federal court filings
“If the contract were to remain valid, the attorneys would get paid by two sources,” Turner wrote on April 13, 2015, to his attorney, Steven Marks of Podhurst Orseck, one of the key law firms leading the settlement and thus in line for a good share of the $112.5 million. “Please help me clear this up. My health is declining rapidly and I’m trying to get my estate in order.”
Turner’s fears were well-founded. At least 18 law firms filed in federal court requests for liens on more than 320 former players between February 2016 and last week, according to a SportsBusiness Journal review of the filings (Podhurst has filed liens on 59 players, the most of any firm, and Turner’s estate is fighting it in court). Most of the requested liens, which ask the court not to allow the settlement fund to pay the players until the firm gets its share, are filed because the retirees signed new legal representation.
At stake are tens of millions of dollars, if not more. Take Turner, whose estate is due a $5 million payout. His old law firm Podhurst is seeking 25 percent of that, or $1.25 million. Turner is on the highest end of payouts, but over the more than 5,000 players who signed contingency fee contracts, the money adds up. And for those who have liens put on them, it could be worse.
In most of the more than 320 cases of players getting liens, the law firm requested it because the player switched counsel. That means that player could be on the hook for two contingency fees, which could all but wipe out their award. Chris Kemoeatu, who played six years for the Pittsburgh Steelers before retiring in 2012, has two liens filed against him totaling 73.33 percent of his payout.
The NFL intended the $112.5 million to cover all legal fees so lawyers would not take a share of the settlement, which is worth up to and possibly more than $1 billion. In a typical class-action lawsuit, plaintiff attorneys sign clients, reach a settlement or verdict, and take their cut. The NFL wanted to ensure the cut didn’t come out of the players’ share, so the league agreed to the $112.5 million separate from the players’ money. But most of the law firms are not backing off the fees.
“If one of your clients is [awarded] $1.5 million and you are taking 20 to 40 percent of that, from 400 to 1,000 clients, I mean do you really need that much money?” asked Jennifer Hiete, a California-based lawyer who’s been retained by more than 20 former players to fight their old law firms on the contingency fees. “Do you really need to take double from your client? Can you sleep at night?” Her player clients are now paying Hiete a fee, though she declined to say how much.
The law firms defend the charges in court filings usually by listing the work they did for the players, including arranging doctors’ visits to establish the baseline testing necessary to make a claim. Much of the settlement, agreed to without the expense of discovery, was led by a handful of firms.
“All they did was put my name on a list,” said Kenyon Rasheed, a former New York Jets and Giants running back, who hired Hiete to contest the fee that law firm Zimmerman Reed seeks. Rasheed, who operates a sports consulting practice, claimed Zimmerman Reed did nothing after the firm signed him in 2011.
“I haven’t talked to my attorney one time,” he alleged. “I didn’t know there was a deadline to get examined until my buddy Ed [Sherrard, a former Giants teammate] called me. I literally didn’t know who represented me.”
Zimmerman Reed, which according to court filings has filed liens on 54 players, disagreed.
“Our law firm did a considerable amount of work for our client, Mr. Rasheed, under our signed retainer agreement,” Charles Zimmerman, one of the firm’s two founding partners and who goes by the moniker “Bucky,” wrote in an email to SportsBusiness Journal. “Of course, the particulars of this work and the medical history and work up of Mr. Rasheed’s potential claim are attorney client privileged communications.”
Brian Gudmundson, a Zimmerman Reed partner, emailed Rasheed on Jan. 10, 2017: “Your statements that you did not know you were represented by counsel because we never contacted you, never sent you to see neurologists, or kept you personally updated are false. We sent you dozens of updates, of which we maintained complete records. We also offered you computer-based neurological testing, which you accepted in September of last year, and in which you actively participated.” Rasheed provided the email to SportsBusiness Journal.
Hiete, Rasheed’s lawyer, said nothing she’s seen backs up Gudmundson’s email.
Hiete will get to argue to the federal court overseeing the case that Zimmerman Reed does not deserve its 20 percent fee from Rasheed, who is not ready to file a claim (the settlement lasts 65 years, so he has time). But most of the thousands of players who signed retainers will likely not fight the charges, Rasheed said, because as football players they are just used to someone taking part of their money.
And therein lies another incongruity that the now deceased Turner foresaw when he emailed Marks, his lawyer in 2015: Players who did not sign with law firms, who did nothing to get the litigation going, would get more than those that did.
“Guys who never even took any action, would wind up receiving 30-40% more than those who went public when it was not popular to do so,” he wrote. His email is included as an exhibit in court filings from his estate contesting Podhurst’s lien to collect 25 percent of what will be a $5 million claim.
Indeed, there are more than 20,000 former players eligible to file claims, meaning well more than half will pay no legal fees (the lead counsels have filed for a new 5 percent fee of the total settlement, though the court has not ruled).
Podhurst’s Marks did not reply for comment, nor did many of the 18 firms that have filed liens that were contacted by SportsBusiness Journal. Some of the firms are well-known advocates of players. Jason Luckasevic filed the first concussion lawsuit against the NFL in 2011, in what looked like a quixotic quest. His firm, Goldberg, Persky & White, whose motto is “working lawyers for working people,” last month filed in federal court requested liens against 20 players. Hausfeld LLC, which has been a key litigator for collegiate athletes and NFL retirees, on March 31 filed five requests for liens. One of those liens is against the estate of R.C. Owens, who passed away in June 2012, three months after he signed with Hausfeld.
The firm Farrise Law, in an apparent pre-emptive move, filed requested liens on 50 players, even though none have terminated their contract with the counsel.
Several of the firms, perhaps recognizing they already can tap into the $112.5 million, have voluntarily reduced the contingency fees. Pope McGlamry initially charged 30 percent to 40 percent for most clients, but has dropped it in most cases to 20 percent. The lead counsel of the entire class, Seeger Weiss, dropped its fees altogether.
Sitting at a lunch overlooking the Pacific Ocean, Rasheed is so upset discussing the subject that he doesn’t even finish a chicken sandwich over an hourlong meal, taking the second half home. He conceded the law firms could have legitimate concerns about poached clients. He recalled attending an NFL-sponsored medical screening at the Houston Super Bowl and wading through a scrum of lawyers in the building lobby who were trying to sign clients. But while he admits he may not have known what he was signing with Zimmerman Reed, once the sides reached a settlement with legal fees carved out, the contracts should be null and void, he said.
In fact, that is the argument Turner’s estate is making in federal court, that the intent of the settlement approval is that players should not pay legal fees.
When Kevin Turner and his lawyer were exchanging emails, the tone was far more amiable than it is now. In reply to the former Philadelphia Eagles fullback’s worry about double charging, Podhurst’s Marks wrote back, “Please be assured we are going to be fair and do right by you and your family.
“I understand your concern,” Marks closed the email, “and we will address it to your satisfaction as a professional and a friend.”