A. Background.

Rivkin Radler & Kremer joined me as co-counsel on May 1, 1990, as I was wrapping up pretrial discovery in the 89c1115 case against New England Apple, and as discovery in the cases against Everfresh and Home Juice was heating up.[1]  Over the next ten months, however, Rivkin Radler & Kremer declined repeated requests to help with that discovery.  They also declined my request that they draft what would become the 90c5009 complaint. 

During their first ten months as co-counsel, Rivkin Radler & Kremer’s contribution was limited to two fronts: they provided some paralegal support, and they drafted the briefs opposing the motions to dismiss the 90c5009 complaint. 

B. The difference of opinion over the value of the 89c1115 case against New England Apple Products Corp. 

The 89c1115 case against New England Apple Products Corp. was a strict liability case.  We had no evidence of intentional adulteration, only the authenticity tests performed by Dr. Brause.  New England Apple’s defense was that if its orange juice was adulterated, it was because their suppliers had sold them adulterated concentrate, and not because New England Apple did anything illegal. 

I estimated the value of the claims against New England Apple as being in the range of $50,000 to $200,000. 

Rivkin Radler & Kremer valued the claims at $800,000 to $1,200,000. 

C. Rivkin Radler & Kremer’s disappointment over the verdict in the 89c1115. 

In February 1991 I gently raised with Rivkin Radler & Kremer the asymmetry of our contributions.  The trigger for the discussion was notice from Judge Hart that he had put the 89c1115 case on his trailing trial calendar.  That status required the parties to prepare a final pretrial order.  I asked Rivkin Radler & Kremer to take full responsibility for the preparation of the pretrial order and the trial itself.  The firm agreed.

Dale Crider was the partner who led that effort.  In June 1991, after a tedious, two-week battle between expert food chemists, the jury returned a $100,000 verdict against New England Apple.  Rivkin Radler & Kremer’s $20,000 contingent fee was a fraction of the value of the professional time it had invested in the case. 

Shortly after the verdict came back Crider informed me that his firm was suspending their involvement in the rest of Grove Fresh’s cases for six or eight weeks.  During that time he and his partners would weigh whether to cut their losses and terminate their representation of Grove Fresh.

In late July or early August Crider told me that his firm had decided to stay in the litigation, but with the intention of seeking a settlement of Grove Fresh’s remaining claims at an early date.  He would not commit to any specific projects, however. 

D. Joe Duffy’s settlement solicitation to Crider.

Joe Duffy was the lead lawyer for Labatt at Schiff Hardin & Waite.  On August 15 (a Thursday), he called Crider and offered to take him to lunch the next day to discuss settlement.

Crider had never met Duffy, nor had he ever attended a single hearing, deposition, or discovery conference in any case except the one against New England Apple. 

At lunch, Duffy offered $500,000 to settle the claims in 89c1113, 89c1117, and 90c5009.  He asked Crider to make a settlement demand for Grove Fresh. 

E. The meeting with Troy.

After his lunch with Duffy, Crider reported the defendants’ solicitation to Cecil Troy, but not to me.  He also arranged to meet with Troy the following Monday (August 19).  The purpose of the meeting was to get Troy’s authority for a settlement demand. 

Crider finally told me about Duffy’s solicitation at about 9:15 am on August 19, four days after the fact and just 45 minutes before his meeting with Troy.  He invited me to the meeting.  He made a formal presentation to Troy and me, supported by charts and figures he had prepared in advance of the meeting.  At the conclusion of his presentation he asked Troy for authority to make a demand for $1,000,000 in lost profits and then warned Troy to be prepared to settle for less. 

Crider’s recommendation for an opening demand was strangely low.[2]  A year earlier our experts on damages (Coopers & Lybrand) had made a preliminary estimate of lost profits in excess of $2 million.  (Their final report arrived several weeks after Crider’s lunch with Duffy and came in at $2.6 million.) 

Grove Fresh also had a claim for treble damages and attorney’s fees under RICO.  Moreover, under the Lanham Act Grove Fresh could opt to recover the defendants’ illegal profits instead of its lost profits; that amount was substantially in excess of $10 million.  Crider’s recommendation for a settlement demand did not include a component for any of these claims.

I opted not to confront Crider over the suspicious circumstances—the four-day delay in telling me about Duffy’s solicitation; the three-day delay in telling me about the meeting with the client; his low-ball recommendation.  Instead, I endorsed the idea of settlement discussions, but I suggested that we postpone formulating a specific demand until after we received Coopers & Lybrand’s final report on lost profits.  Troy concurred with my advice. 

F. The failed settlement efforts.

Over the next seven or so weeks we had several meetings with defense counsel, but we made no discernable progress.  The defendants asked for a meeting between the principals from which lawyers would be excluded.  Troy agreed. 

At the meeting of principals, with the lawyers in a separate room nearby, the defendants proposed a settlement that would net Grove Fresh $500,000 after payment of a contingent fee to the lawyers.  They proposed to negotiate directly with Rivkin Radler & Kremer and me over the amount of our contingent fee. 

Rivkin Radler & Kremer and I rejected the idea of a separate negotiation over our fees. 

Troy, who was African-American, was angered by the offer.  He rejected it, telling the defendants and their lawyers that they were offering him “nigger money.”  The atmosphere was such that no one thought it would be worth anyone’s while to pursue the talks any further. 

[1] See §§VII-C, XI-H, above.

[2] In the negotiations that began in the Fall of 1992 Grove Fresh made an opening demand of $4 million and eventually settled for a $2.2 million package.