A federal judge in Camden, New Jersey, dismissed a suit accusing lawyers from Mazie, Slater, Katz & Freeman of collecting excessive contingency fees in the $358 million settlement of multidistrict litigation over alleged defects in the blood pressure drug Olmesartan.
The attorneys have framed the dispute as one among former law partners, now embroiled in a “longstanding vendetta” since their firm’s breakup.
Senior U.S. District Judge Robert Kugler dismissed the suit in Johnson v. Mazie on collateral estoppel grounds, after finding that it raised the same issues as an other suit he had dismissed in 2022, Marino v. Mazie.
The U.S. Court of Appeals for the Third Circuit upheld his dismissal of Marino in 2023.
Marino and Johnson, which Kugler referred to as Mazie I and Mazie II, respectively, were both brought by Bruce Nagel of Nagel Rice.
4 Prongs
Granting a defense motion for judgment on the pleadings, Kugler said the first, second and fourth prongs of the Third Circuit’s test for collateral estoppel were met in Mazie II: The identical issue was decided in a prior adjudication, there was a final judgment on the merits, and the party against whom collateral estoppel was asserted had a full and fair opportunity to litigate the issue in question.
The third prong, Kugler said, asks whether the party against whom the bar is asserted was a party or in privity with a party to the prior adjudication. There, over time Third Circuit guidance as to the definition of privity “has loosened to the point that the word is now used as a ‘way to express the conclusion that nonparty preclusion [i.e., collateral estoppel] is appropriate on any ground,’” Kugler wrote.
“This loosening of the definition introduced the concept of ‘virtual representation’ of privity. Here, Mazie I plaintiffs have served as the virtual representative of the Johnson plaintiffs because ‘there is such an identification of interest between the two as to represent the same legal right,’” Kugler wrote.
“Based on this guidance, the court finds that prong 3 of the collateral estoppel test is met. All plaintiffs in this action as well as those in Mazie I are in ‘privity’ with each other because: all plaintiffs in both actions signed contingency fee agreements with defendants and participated in the Olmesartan settlement; and all plaintiffs in both actions were awarded an Olmesartan settlement amount from which defendants collected their contingency fee,” Kugler wrote.
“Since Mazie I and this action have identical claims with parties in privity to each other and the Mazie I claims were dismissed with prejudice for failure to state a claim, the court grants defendants’ motion to dismiss on the basis of collateral estoppel,” Kugler wrote.
No Sanctions
Nagel said he will seek to appeal the ruling.
“The district court overlooked the fact that the Third Circuit already ruled that certain causes of action were not pled in the first action and that this case asserted claims that were never originally asserted. What is key here is that Mazie Slater got paid from the common benefit fund for work done on behalf of these same clients and also got a full contingent fee for the same work. By getting paid twice for the same work, the full contingent fee they charged was not proper. This issue needs to finally be addressed by the court as it occurs in mass tort litigation and we will appeal this dismissal,” Nagel said in an email.
Mazie said of the ruling, “This is just another meritless lawsuit brought by Bruce Nagel that a court has dismissed on the pleadings. It follows a pattern by Mr. Nagel to continually harass our law firm. We’re gratified that the court dismissed this lawsuit.”
In light of the dismissal, Kugler also dismissed motions for sanctions from both sides as moot.
Nagel claimed that Mazie Slater should be sanctioned because the firm wrote a letter to Robert Borteck, a third-party attorney who signed an affidavit of merit for Nagel. Mazie Slater’s letter threatened to seek sanctions against Borteck for an allegedly “frivolous” affidavit of merit he signed in the case.
Mazie Slater alleged in a filing opposing that motion that Mazie II was “a copy-cat legal malpractice case, identical in substance to a prior case filed by the same attorney, Bruce Nagel. That case was dismissed with prejudice by this court as a matter of law, and the Third Circuit affirmed that dismissal.”
Mazie Slater also claimed in court papers that Borteck, as an attorney who practices in estate administration, tax planning and contested probate matters, ”has absolutely no experience in any of the areas relevant to this case: personal injury, product liability, and mass torts.” Therefore, Borteck’s affidavit of merit was allegedly “a frivolous paper signed by an attorney in violation of Rule 11,” Mazie Slater claimed.
Mazie Slater also sought sanctions against Nagel for alleged violations of Rule 11(b) of the Federal Rules of Civil Procedure. That rule forbids filing pleadings for improper purposes, such as harassment or needlessly increasing the cost of litigation, or pleadings that are frivolous or lack evidentiary support.
Ex-Colleagues in ‘Longstanding Vendetta’?
The firm’s motion alleged that Nagel has a “longstanding vendetta” against Mazie Slater and partners David Mazie and Adam Slater ever since a falling out among the three, who once practiced together in the same firm, Nagel, Rice & Mazie.
“Since the 2006 break-up of their former firm, Nagel and his law firm Nagel Rice have systematically filed, and encouraged others to file, a string of harassing actions and objections against his former law partners, including an objection to Mazie Slater’s application for class action attorney’s fees,” Mazie Slater alleged in its motion for sanctions against Nagel Rice.
But Nagel painted the opposite picture.
Nagel alleged in court papers responding to Mazie Slater’s motion for sanctions that “[a]fter Mr. Mazie left our firm, he embarked on a vicious attempt to destroy our reputation and professional accomplishments.”
