The opinion of the court was delivered by: Thomas P. Griesa, U.S. District Judge
The court has approved an infant's compromise in this case. The court has also rejected numerous efforts to vacate the settlement. Now pending before the court is a motion to approve the attorneys' fees of plaintiff's former counsel, the Balestriere Fariello law firm ("the Firm").
The court hereby declines to consider the Firm's application for fees in connection with the CESD settlement, awards the Firm $193,363.73 for its work on the MTV settlement, and awards the Firm 15% of any future recoveries pursuant to the audit rights set forth in the settlement agreement.
The complicated history of this litigation need not be fully recounted here. However, the pertinent facts will be discussed.
At some point in the summer of 2010, the parents of infant Caitlin Sanchez approached John Balestriere about having the Firm represent Sanchez in a potential lawsuit against her former employer, MTV Networks and Nickelodeon/Viacom Consumer Products, Inc. (collectively, "MTV"), and also potentially against her former talent agency, Cunningham Escott Slevin Doherty ("CESD") Talent Agency. Sanchez had been performing as the voice of "Dora the Explorer," a character on a Nickelodeon cartoon, and she claimed she had not been appropriately compensated by MTV.
Although the Firm initially billed the Sanchezes on an hourly basis, Balestriere and Sanchez's mother subsequently entered into a contingency fee arrangement for a suit against MTV. As pertinent here, the arrangement provided that the Firm would receive 35% of any recovery, which would increase to 37.5% if the recovery occurred after discovery commenced. Sanchez herself did not sign that agreement and is not personally mentioned in the agreement.
Balestriere eventually filed a lawsuit on Sanchez's behalf against MTV in Supreme Court, New York County, which was removed to this court on the basis that the Labor Relations Management Act ("LRMA") completely preempted Sanchez's state law claims.
Sanchez moved to remand. Defendants opposed and moved to dismiss. Discovery commenced. The parties entered into settlement negotiations. While both motions were pending, the parties notified the court that they reached a settlement. The settlement, in general terms, provided Sanchez with a lump sum payment, as well as rights to conduct future audits of MTV in order to determine whether MTV was in compliance with its obligations, and also required Sanchez to perform some additional services for MTV in return for further compensation. Sanchez, her parents, and Balestriere all reviewed and signed the settlement agreement.
Because Sanchez is an infant, the court was required to approve the terms of the settlement. The court entered an order approving the settlement on November 30, 2010. The procedures governing infant's compromises also required the court to approve an award of attorneys' fees if the fees were to be paid out of the settlement amount. However, in approving the settlement, the court was not made aware of the attorneys' fees sought by the Firm and did not approve any such fees.
At some point after the settlement, the Firm represented Sanchez in negotiations with CESD concerning a claim against CESD. She obtained a monetary settlement from CESD without ever filing a lawsuit.
Pursuant to the contingency fee arrangement, the Firm claims to have become entitled to 37.5% of the fees from both the MTV and CESD settlements. The settlement funds were paid directly to the Firm, which kept its share of those funds before paying Sanchez.
After the CESD settlement, Sanchez terminated the Firm, apparently because of a dispute over the tax implications of the settlements. Represented by new counsel (who has since also been terminated), Sanchez moved to vacate her settlement with MTV Networks. Sanchez claimed that for various reasons the settlement had operated as a "fraud on the court," including that the court had approved the settlement without reviewing the Firm's fees. The court denied the motion and rejected this challenge to the settlement, which the court found to have been a fair and ...