Hagens Berman Sobol Shapiro, LLP Ordered To Pay $10.8M for Violating Duty of Loyalty
March 23, 2006A jury ordered a law firm to pay at least $10.8 million for dropping three small bottlers from a dispute with giant Poland Spring Water Co. in order to bring a more lucrative class action suit. The jury unanimously found Wednesday that lawyers from Hagens Berman Sobol Shapiro, a Seattle law firm, violated their duty of loyalty to three small businesses that in 2003 were close to settling a claim with Nestle Waters North America, Poland Spring's owner.
Jurors will return to federal court next week to consider possible punitive damages.
In its decision Wednesday, the jury awarded Maine companies Glenwood Farms Inc. and Carrabassett Spring Water $3.9 million each, and New York-based Tear of the Clouds $3 million.
"This was not a case of the attorneys taking care of consumers. This was a case of the attorneys grabbing everything they could for themselves," said Tear of the Clouds co-owner Robert F. Kennedy Jr.
The bottlers contended the "natural spring water" labels on the Poland Spring brand were misleading because the water is pumped from wells, not springs. But they were seeking an out-of-court settlement without a public disclosure that would damage the entire Maine bottled water industry, attorney William Robitzek said.
The three companies said Hagens Berman was assisting them in their case against Poland Spring, but defected at the last minute and filed class action claims in five states, causing Nestle Waters to withdraw its settlement offer.
Hagens Berman argued that it was the bottlers who were greedy and were willing to sell out consumers to grab a quick payday.
Ultimately, a different class action lawsuit brought by other lawyers was the first to be certified and that led to a $12.1 million settlement. Most consumers received coupons for Poland Spring water. The lead lawyer was awarded $810,000 in fees.
Peter DeTroy, the lawyer for Hagens Berman, wouldn't discuss his options, but noted that the trial is still not over.
"Obviously, we're disappointed but we don't think this is the last word," he said.
