Relman, Dane & Colfax PLLC v. Fair Hous. Council of San Fernando Valley, Civil Action No. 18-00495 (TNM/RMM)

CourtUnited States District Courts. United States District Court (Columbia)
Writing for the CourtROBIN M. MERIWEATHER UNITED STATES MAGISTRATE JUDGE
PartiesRELMAN, DANE & COLFAX PLLC, Plaintiff, v. FAIR HOUSING COUNCIL OF SAN FERNANDO VALLEY et al., Defendants.
Decision Date12 August 2019
Docket NumberCivil Action No. 18-00495 (TNM/RMM)

RELMAN, DANE & COLFAX PLLC, Plaintiff,
v.
FAIR HOUSING COUNCIL OF SAN FERNANDO VALLEY et al., Defendants.

Civil Action No. 18-00495 (TNM/RMM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

August 12, 2019


REPORT AND RECOMMENDATION

This case arises from a contract dispute between Relman, Dane & Colfax PLLC (the "Relman Firm" or "Relman"), a civil rights law firm located in Washington D.C. ("D.C." or "the District"), and its former clients, Defendant Fair Housing Council of San Fernando Valley ("FHC") and Defendant Mei Ling ("Ms. Ling," and together with FHC, "Defendants"). The Relman Firm contends that Defendants terminated and voided the contracts pursuant to which they had retained the Relman Firm as counsel in a matter pending in a federal district court in California, thereby reneging on their contractual obligation to pay the Relman Firm a contingency fee equaling a percentage of Defendants' recovery. See generally Compl., ECF No. 1. The Relman Firm contends that Defendants' actions constitute an anticipatory breach of their respective contracts, and seeks a declaratory judgment and other relief. See id. at 151 (prayer for relief).

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Defendants each separately filed Motions to Dismiss, which are pending before the Court.2 See Mot. to Dismiss ("FHC MTD"), ECF No. 10; Mot. to Dismiss ("Ling MTD"), ECF No. 22. Both Defendants contend that this Court lacks subject matter jurisdiction because the claim is unripe for review. See FHC MTD at 23-32; Ling MTD 15-18. Defendants also both assert that they lacked sufficient contacts with D.C. for this Court to assert personal jurisdiction over them. See FHC MTD at 32-41, Ling MTD at 18-24. Defendants alternatively assert that venue is improper, and ask the Court to transfer the case to a proper venue in the Central District of California (CACD), where both Defendants reside, abstain from hearing the Declaratory Judgment Act claims, or stay the case. See FHC MTD at 29-32, 41-49; Ling MTD at 24-30. Ms. Ling also seeks dismissal under Rule 12(b)(6) for failure to state a claim, asserting that the Relman Firm failed to assert cognizable damages for its anticipatory breach claim. See Ling MTD at 30-32.

BACKGROUND

I. FACTUAL BACKGROUND

A. Initial Meeting and Retention

Plaintiff Relman Firm is a civil rights law firm based in Washington D.C. with a practice group dedicated to litigating fair housing matters. See Compl. ¶ 20. Defendant FHC is a three-employee non-profit that operates in Panorama City, CA and investigates housing discrimination

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complaints and finds fair housing solutions for disabled and low-income individuals in the Los Angeles area. See Kinlaw Decl. ("Kinlaw 1st Decl."). ¶ 2, ECF No. 10-2.

On February 11, 2010, Michael Allen, a Relman partner based in Washington D.C., travelled to an annual Fair Housing Laws and Litigation Conference ("2010 Fair Housing Conference") in San Diego, CA to make a presentation about a successful False Claims Act ("FCA") matter that the Relman Firm had initiated. See Allen Decl. ("Allen 1st Decl.") ¶ 6, ECF No. 14-1. Defendant FHC's Executive Director, Sharon Kinlaw, was one of the principal organizers of the conference. See id. During the conference, Mr. Allen met Ms. Kinlaw and Ms. Ling and discussed potential fair housing and disability rights violations and the nature of the Relman Firm's work. See id. ¶ 9. The parties dispute who solicited whom at the conference. For several months after the conference, the parties communicated through telephone, email, and mail regarding investigations into potential violations of fair housing law by Los Angeles and its Community Redevelopment Agency. See Kinlaw 1st Decl. ¶¶ 8-10; Allen 1st Decl. ¶ 15.

Eventually, via mail and telephone, the parties discussed forming an attorney-client relationship to litigate a FCA lawsuit. See Allen 1st Decl. ¶¶ 19-21, Kinlaw Decl. 10. On December 8, 2010, FHC and Ms. Ling retained the Relman Firm by signing separate, but identical retainer agreements (collectively, the "Agreements"). See Compl. ¶ 23. The Relman Firm mailed the Agreements to the parties, and neither FHC nor Ms. Ling traveled to the District to execute the Agreements. See Allen 1st Decl. ¶¶ 21, 25-26; Kinlaw 1st Decl. ¶ 13; Ling Decl. ¶ 15.

The Agreements state that the Relman Firm "is entitled to its reasonable attorney's fees" and certain costs, "[i]n the event relief is obtained." FHC Retainer Agreement 2, ECF 10-3; Ling Retainer Agreement at 2. If the litigation is resolved by settlement or an offer of judgment that

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does not separately address the provision of fees, the Agreements entitle the Relman Firm to one-third of a monetary award, or its actual fees and costs, whichever is greater. See id. If the litigation is resolved by a summary judgment ruling or a trial at which FHC or Ms. Ling prevails, the Relman Firm is entitled to one-third of the monetary award, plus costs, or the court's award of fees and costs, whichever is greater. See id. If FHC or Ms. Ling does not prevail in the litigation, the clients are not responsible for the Relman Firm's fees, and are responsible only for costs. See id. The Agreements define reimbursable costs to include "duplicating costs, telephone charges, postage, travel, computer research, filing fees, deposition costs, and the like." See id. at 3.

B. The Relman Firm's Representation of FHC and Ms. Ling

Upon being hired, the Relman Firm investigated the City of Los Angeles's and a California agency's alleged failure to comply with Section 504 of the Rehabilitation Act and the Fair Housing Act. See Compl. ¶ 29. The Relman Firm memorialized its investigation in a disclosure statement to the U.S. Department of Justice on January 28, 2011. See id. ¶ 30. Subsequently, the Relman Firm filed a FCA suit ("the FCA Litigation") on behalf of the Defendants on February 1, 2011 in the CACD. Id. ¶ 31. Four Relman attorneys — two of whom were not barred in Washington D.C. — represented the Defendants and entered their appearances in the FCA Litigation. See FHC MTD at 11 n.1, 13; id., Ex. 3 (ECF Docket, Case No. 11-cv-00974 (CACD) ("FCA CACD Docket"). The case remained under seal for more than six years, but the Relman Firm regularly consulted with government counsel regarding legal analysis and factual evidence including architectural site surveys, expert reports, and deposition transcripts. See Compl. ¶¶ 32-33. During that six-year period, the Relman Firm developed the

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evidence and legal theories to support the claims against Los Angeles and the California agency and prepared to litigate the matter if DOJ declined to intervene in the case. See id. ¶ 5.

C. FHC's and Ms. Ling's Termination of the Relman Firm

On December 18, 2016, Ms. Kinlaw terminated the Relman Firm as counsel for FHC in the FCA Litigation via email and accused the Relman Firm of unethical conduct. See Compl. ¶ 35; Pl.'s Opp'n to FHC, Ex. E (FHC Termination Email), ECF No. 14-6. Later, FHC's lawyers emailed the Relman Firm's lawyers to void FHC's Agreement with the Relman Firm. See Compl. ¶ 36; Pl.'s Opp'n to FHC, Ex. F (FHC Void Letter), ECF No. 14-7.

Ms. Ling also terminated the Relman Firm via email and subsequently mailed a letter to void the Agreement. See id., Ex. D (Dec. 19, 2016 Email from Mei Ling), ECF No. 14-5; id., Ex. G (April 30, 2018 Letter from Mei Ling's Counsel "Voiding" Contract), ECF No. 14-8. Ms. Ling contended that her termination of the relationship with the Relman Firm terminated "any contingency agreement with Relman, Dane and Colfax." Compl. ¶ 48. In a filing in the FCA Litigation, Ms. Ling asserted that the Relman Firm had "forfeited any fee to which it may have been entitled by breaching its fiduciary duty to Ms. Ling." Id. ¶ 9.

D. The Government's Intervention in the FCA Litigation

In May 2017, the federal government intervened in the FCA Litigation. See id. ¶¶ 38-39. The Relman Firm contends that the evidence it uncovered factored into the government's decision to intervene. See id. ¶¶ 39-41. Once the government intervened and took control over the litigation, little work remained for the Relman Firm to perform. See id. ¶ 41 (citing Boese, John T., The Department of Justice's Role, in Civil False Claims and Qui Tam Actions § 4.05). In the FCA Litigation, the government seeks damages exceeding $2 billion, and the relators

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(FHC and Ms. Ling) would be entitled to 15-25% of the proceeds in the action. See Compl. ¶ 44 (citing 31 U.S.C. § 3730(d)(1)).

II. PROCEDURAL HISTORY

The Relman Firm filed its Complaint in this Court on March 1, 2018. See id. The complaint seeks to enforce the Agreements. See id. ¶ 1. Specifically, the Relman Firm alleges that Defendants' repudiation of their relationship with the Relman Firm while the FCA Litigation remained pending constituted an anticipatory breach of the Agreements, thereby depriving the firm of the legal fees due under the Agreements' contingency fee arrangement. See id. ¶¶ 67-68. The complaint seeks a declaratory judgment that Defendants have anticipatorily breached their contract with the Relman Firm and that Defendants' "payment obligations under the retainer agreements with the Relman Firm remain in full force and effect." Id. ¶ 11.

FHC filed a Motion to Dismiss on April 10, 2018. See FHC MTD. On May 9, 2018, District Judge Trevor N. McFadden referred this matter to Magistrate Judge Robin M. Meriweather for full case management up to but excluding trial. See 05/09/2018 Min. Order. Subsequently, Ms. Ling filed a Motion to Dismiss on June 26, 2018. See Ling MTD.

On June 20, 2018, FHC filed a notice related to a jurisdictional challenge to "mandatory fee arbitration proceedings" between FHC and the Relman Firm before the Los Angeles Bar Association Dispute Resolution Services, Inc. Fee Arbitration Program. See Notice of Related Ruling, ECF No. 21. The arbitrator's June 8, 2018 ruling overruled the Relman Firm's jurisdictional challenges, finding that the arbitration program had...

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