Weiser Law Firm, P.C. v. Hartleib

665 F.Supp.3d 647

The WEISER LAW FIRM, P.C., et al., Plaintiffs, v. Michael HARTLEIB, Defendant.

CIVIL ACTION NO. 2:19-cv-02728-KSM

United States District Court, E.D. Pennsylvania

Filed March 29, 2023

Philip S. Rosenzweig, Silverang, Rosenzweig & Haltzman, LLC, King of Prussia, PA, for Plaintiffs.

Eamon C. Merrigan, Goldberg, Miller & Rubin, P.C., Philadelphia, PA, for Defendant.

MEMORANDUM

MARSTON, District Judge

This case spawns from a years-long dispute between Plaintiffs, the Weiser Law Firm, P.C. (the "Law Firm") and Robert Weiser, Esquire, and Defendant Michael Hartleib. Plaintiffs assert claims for defamation, commercial disparagement, and false light invasion of privacy. Presently before the Court is Hartleib's motion for summary judgment. (Doc. No. 193.) For the reasons below, the Court grants in part and denies in part the motion.

I. BACKGROUND

A Allegedly Disparaging Statements

In their First Amended Complaint, Plaintiffs brought claims for defamation, commercial disparagement, and false light in connection with seventeen statements Hartleib allegedly made to judges, members of the legal community, and clients. (See Doc. No. 69.) Following the Court's ruling on Hartleib's motion to dismiss, the claims survived only with respect to the following two statements:

• Statement No. 9: A March 14, 2019 email Hartleib sent to Judge Vano's chambers asking Judge Vano to "set[ ] the record straight" in the CenturyLink Litigation, on which 14 attorneys were copied.¹ (Id. at ¶ 183(i); see also Doc. No. 69-28.)

• Statement No. 11: An August 24, 2018 email from Hartleib to Judge Watson in the Big Lots Litigation² raising "concerns over Weiser's billing practices in [a] prior case." (Id. at ¶ 184(b); see also Doc. No. 69-25.)

Bearing this in mind, the Court sets forth the relevant facts below.³

B. Factual Background

The Law Firm provides legal services for shareholder class actions and shareholder derivative actions, among other practice areas. (See Doc. No. 194-4 at 71:15-73:11.) Weiser's practice focuses primarily on shareholder derivative litigation. (Id. at 75:1-76:8.)

1. The Sprint Litigation

Hartleib, whose "holdings initially were in Nextel," was unhappy "at the loss of value that took place after" Sprint and Nextel merged. (Doc. No. 194-2 at 30:15-32:15, 45:17-46:4.) Subsequently, he retained Bruce Murphy, Esquire, to pursue legal redress in connection with the Sprint-Nextel merger. (Id. at 46:5-47:2.) Murphy reached out to Weiser, but Weiser was not interested in pursuing a Sprint derivative action with Hartleib as the named plaintiff. (See Doc. No. 69-2 at 2 (Mar. 27, 2009 Email from Weiser to Murphy) ("I think he has a potential conflict in light of other litigation he's involved in. Thus, I don't think he would make an adequate representative for sprint."); Doc. No. 69-3 at 2 (Mar. 27, 2009 Email from Murphy to Hartleib) ("Rob Weiser and I have conferred and thought about the motion to appoint the Sprint Derivative Action Representative. We believe you may have a potential conflict in light of the other litigation in which you are involved . . . . Therefore, we will not be able to file the Sprint derivative suit in your name.").) Ultimately, the Law Firm represented named plaintiff Monica Ross-Williams in a Sprint derivative action instead, which was later consolidated in the state court of Kansas. (See, e.g., Doc. No. 193, Exs. B, G, & H; Doc. No. 194-11 at ¶ 18 (admitting that "Plaintiffs represented Monica Ross-Williams in connection with the Sprint Derivative Litigation"), ¶ 19 (admitting same and that the "Sprint Derivative Litigation . . . was consolidated in the State Court of Kansas").)

In 2016, several of the Sprint shareholder derivative lawsuits pending in the Kansas courts (including the Ross-Williams suit) achieved a collective settlement. (See, e.g., Doc. No. 193, Ex. B (noting that on February 26, 2016, Plaintiff filed an Unopposed Motion for Preliminary Approval of Settlement and that the court granted the motion); Doc. No. 194-4 at 143:18-24 (Weiser's testimony that Ross-Williams was considered "a plaintiff amongst the settling plaintiffs group," all of whom were on equal footing).) The court preliminarily approved the settlement and when the Law Firm and others sought the court's final approval of the terms of the settlement, including attorneys' fees for plaintiffs' counsel, Hartleib filed a pro se objection. (See Doc. No. 194-11 at ¶ 20 (admitting that "Hartleib objected to the already approved settlement in the Sprint Derivative Litigation").) On May 26, 2016, Hartleib appeared at the final approval hearing before the Honorable James Vano in support of his objection. (Doc. No. 193, Ex. A; see also Doc. No. 194-11 at ¶ 22 (admitting that "Hartleib appeared at a hearing to object to the settlement in the Spring Derivative Litigation").) On November 22, 2016, Judge Vano approved the Sprint Derivative Settlement, but only awarded a small percent of the attorneys' fees requested. (Doc. No. 193, Ex. 11 (approving the settlement, limiting attorneys' fees and expenses to $450,000, and rejecting the requested $4.25 million fee award as "unjustifiably high"); see also id. (finding the "billing records . . . paint[ed] a troublesome portrait of exploiting Sprint's missteps for a substantial reward for counsel, and minimal relief to Sprint and its shareholders that suffered" and noting that "no motion practice or serious discovery efforts were ever undertaken to address the egregious acts originally alleged against the individual Defendants who were responsible for the losses to Sprint"); Doc. No. 194-11 at ¶ 33 (admitting that the Kansas state court approved the settlement but cut the attorneys' fees for Plaintiffs and their peers by 90%).)

In the opinion, Judge Vano specifically called out the amount of time billed by one of the Law Firm's contract attorneys, Alexander J. Silow.⁴ (See Doc. No. 193, Ex. B ("Of the nearly 18,000 [sic] of work, 6905.25 of those hours were billed by attorney Alexander J. Silow for document review. This is astonishing! The adequacy of Mr. Silow's billing records are discussed in detail below."); id. ("Mr. Silow's billing records reflect that on most days, he performed billable work between 10 to 15 hours per day. In fact, only 46 out of the 550 billing records—8.36% in total—show Mr. Silow working under ten hours a day. The Court is very skeptical about the credibility of Mr. Silow's billing records. Working 14 hours a day, as Mr. Silow's records reflect he did for 315 of the days in question, would mean that he would be performing document review from 6:00 AM until 8:00 PM every day, without any breaks to eat meals or attend to other personal matters. This is unbelievable!").)

The parties appealed Judge Vano's November 22, 2016 decision. (Doc. No. 194-11 at ¶ 34.) In February 2017, during the pendency of the appeal, the Law Firm discovered that Silow had misrepresented himself as a barred attorney by providing another individual's bar number. (Id. at ¶¶ 38-39.) Silow had been placed with the Law Firm through Abelson Legal Search, a Philadelphia legal recruitment and placement firm. (Id. at ¶ 42.) The Law Firm notified the Court of Appeals about the information it learned about Silow.⁵ See id. The Court of Appeals ultimately affirmed the reduced fee award in April 2018. See id. at 635 ("Based on our review of the record on appeal in light of Kansas law, we do not find the district court's decision to approve attorney fees and expenses in the amount of $450,000 to be an abuse of discretion.").

2. Statement No. 11 to Judge Watson

In the Big Lots Litigation, another derivative action involving the Law Firm, Hartleib (who was not a Big Lots shareholder) emailed the court about the Law Firm after the court had preliminarily approved the settlement in that case. (See Doc. No. 69-25 at 12 n.2.) Specifically, on August 28, 2018, in the opinion finally approving the settlement, the Honorable Michael H. Watson noted that Hartleib had emailed the court⁶ to raise concerns about the Law Firm's billing practices:

On August 24, 2018, well after the time to object and the fairness hearing took place, the Court received an email⁷ from [Hartleib], a shareholder who had an interest in a different case involving The Weiser Firm . . . Hartleib raised concerns over Weiser's billing practices in this prior case and stated that he wanted to inform the Court so that it could scrutinize the fee request in this case . . . Hartleib does not indicate that he is a shareholder⁸ in Big Lots or otherwise an interested party in this case. Furthermore, the Court always scrutinizes the billing records of plaintiffs' counsel before approving fee awards.⁹

(See id.)

Hartleib testified that his "intent was to provide information that [Judge Watson] may or may not deem relevant to his determination as to fairness of fees, appointment of lead counsel, any of those things." (Doc. No. 194-2 at 320:22-5; see also id. at 321:6-14 ("Given what had transpired in Kansas, I deemed it prudent to inform the judge as to what took place. At that time, I didn't know who was involved in the case and who billed. I didn't know if Silow was involved in that case. I didn't know who was involved. It's just giving the judge information that he may or may not deem relevant.").)

Weiser testified that he was not aware of anyone who read the email, other than Judge Watson. (Doc. No. 194-5 at 328:10-13.) As to the harm he suffered, Weiser testified: "[I]t is like the world I am in is small. I may see Judge Watson again. Judge Watson didn't seem overly concerned or moved by [Hartleib's] note. On the other hand, maybe I apply to be Lead Counsel in front of Judge Watson this year, why deal with my trouble. You got a couple [movants], they are all more or less qualified. They are pretty much all in the same boat. Is this enough to throw the judge; maybe, maybe not." (Id. at 330:8-331:1.)

3. Statement No. 9 to Judge Vano

Hartleib also raised...