I’ve discussed a few times this fight over whether a patent assertion entity should be required to pay full hourly fees, or anything, to a firm that dumped it after losing the case on summary judgment, when the client hired another firm, got the case reversed on appeal by paying hourly rates to the new firm, and later settled the case for significant money. The last post on it was here, and, full disclosure: I was an expert opposed to Jenner & Block, which was awarded money in the arbitration and prevailed in the state court fight over confirmation of that award.
Generally, the question before the Supreme Court is whether the Federal Arbitration Act preempts a state from setting aside an award if it violates a state public policy.
An amicus brief in support of cert was just filed by the Eagle Forum (yes, Phyllis Schafly’s outfit), which is interesting in and of itself. A link to that brief is here. According to it, there is a circuit split on this issue. If, as apparently the courts below held, an arbitration award cannot be challenged even if it requires enforcement of an unethical fee agreement, it’d be nice to have the Supreme Court make that point, so the rest of us can take corrective action in legislatures. Can you imagine the holding, if the allegations are true: “an unreasonable fee can be enforced in arbitration because that’s what Congress intended when it adopted the FAA in 1925…”
It seems to me that if this is the law, maybe every lawyer-client arbitration clause will need to say: “In addition to losing your right to trial by jury, any ethical limitation on our fees will not apply…”
Think on that one.