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Case 2:14-cv-08390-DMG-PLA Document 622 Filed 05/10/19 Page 1 of 10 Page ID

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1 JOHN P. REITMAN (State Bar No. 80579)


jreitman@lgbfirm.com
2 JACK A. REITMAN (State Bar No. 283746)
jareitman@lgbfirm.com
3 LANDAU GOTTFRIED & BERGER LLP
1880 Century Park East, Suite 1101
4 Los Angeles, California 90067
Telephone: (310) 557-0050
5 Facsimile: (310) 557-0056

6 Attorneys for Brian Weiss,


Court Appointed Receiver of Eagan Avenatti, LLP
7

8 UNITED STATES DISTRICT COURT


9 CENTRAL DISTRICT OF CALIFORNIA - LOS ANGELES DIVISION
10

11 BAHAMAS SURGERY CENTER, Case No. 2:14-cv-08390-DMG


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12
LLC, et al.,
RECEIVER’S REPLY IN
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

13 Plaintiff, SUPPORT OF HIS MOTION FOR


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14 vs. “INDICATIVE RULING” (1)


REMOVING EAGAN AVENATTI
15 KIMBERLY-CLARK CORPORATION, LLP AND MICHAEL AVENATTI
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16 a Delaware Corporation, and AS CLASS COUNSEL AND (2)


HALYARD HEALTH, INC., a Delaware APPOINTING JASON M. FRANK,
17 Corporation, SCOTT H. SIMS AND ANDREW D.
18 STOLPER OF FRANK, SIMS &
Defendants. STOLPER, LLP AS LEAD CLASS
19 COUNSEL
20
Hearing Date, Time, and Location:
21 Date: May 24, 2019
Time: 9:30 a.m.
22 Place: Courtroom 8C
350 West 1st Street
23 Los Angeles, CA 90012
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25

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Case 2:14-cv-08390-DMG-PLA Document 622 Filed 05/10/19 Page 2 of 10 Page ID
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1 Brian Weiss, the court appointed receiver (“Receiver”) of Eagan Avenatti,


2 LLP (“EA”) submits this reply in support of his motion (the “Motion”) for an

3 “indicative ruling” removing EA and Michael J. Avenatti (“Avenatti”) as counsel of

4 record for the Class and appointing Jason M. Frank, Scott H. Sims and Andrew D.

5 Stolper of Frank, Sims & Stolper, LLP (“FSS”) as Class counsel.

6 I. INTRODUCTION
7 Just hours after Avenatti submitted a declaration to this Court agreeing to
8 relinquish his “role as lead class counsel at this time,” Avenatti sent an email to

9 Kimberly Clark’s counsel stating that the Receiver was attempting to “hijack the

10 ligation away from me.” Docket. No. 618-2 (emphasis added). Avenatti further

11 threatened to sue Kimberly Clark’s counsel if he or his client supported the


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12 Receiver’s request that FSS be named as class counsel. Id. In Avenatti’s view, the
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13 Motion constitutes “tortious interference” for which Avenatti is “exploring” filing a


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14 lawsuit “in the immediate term” and Kimberly Clark or anyone supporting that

15 request is aiding the Receiver and “may be subject to liability.” Id. On the other
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16 hand, Avenatti informed Kimberly Clark that it is “free to cooperate with

17 [Hearon/Ibrahim] as to the motion and any attendant matters.” Id. To the extent

18 there was ever any about whether Avenatti plans to control the litigation through

19 Ibrahim/Heron, his email to Kimberly Clark’s counsel removes that doubt. If

20 Avenatti did not intend to control the litigation through them, then they too would be

21 “hijacking” the litigation from him.

22 Avenatti’s ongoing attempt to exert influence over the Class must viewed in
23 connection with two related prisms. First, Avenatti hand-picked Ibrahim to take

24 over for him in the Medline vs. Kimberly Clark matter. If Hearon/Ibrahim are

25 selected as lead Class counsel in this case, there may be an incentive for Ibrahim and

26 Avenatti to favor the Medline case because their respective fees do not need to be

27 approved by the Court in that matter. This is especially true because the economic

28 relationship between Ibrahim and Avenatti on this matter is unknown. Second,


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1 Avenatti has a propensity to place his interests ahead of his clients, as evidenced by

2 the bi-coastal charges he is facing. Combined, the Medline conflict, Avenatti’s

3 predilection for looking after himself (and only himself), and the tight relationship

4 between Messrs. Hearon, Ibrahim and Avenatti lead to the conclusion that

5 appointing Hearon/Ibrahim is a risk the Court need not take. 1

6 On the other hand, the Receiver’s agenda is straight-forward and dictated by


7 the Stipulation and Order pursuant to which he was appointed to administer the EA

8 receivership estate – the Court knows what it is getting with the Receiver’s proposal

9 in the Motion. It is in the Class’s interest to have competent lawyers appointed who

10 have no ties with Avenatti or potential conflicts as a result of representing other

11 parties (e.g. Medline) in related matters against Kimberly Clark. It is for these
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12 reasons that the Receiver moved to have FSS appointed.


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13 II. ARGUMENT
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14 A. The Receiver and EA do not Lack Standing.


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15 The Receiver (contrary to Messrs. Ibrahim, Hearon, and Avenatti’s


16 contentions) and EA have standing and this Court has the power to appoint whatever

17 Class counsel it believes will best serve the Class. At all times, EA has been counsel

18 of record in Class pleadings filed in this matter, EA’s attorneys and staff were

19 deployed on this matter and EA’s funds were used to pay the costs incurred by

20 Avenatti and other EA attorneys engaged in this matter. Thus, even if Avenatti

21 rather than EA is “lead Class counsel,” it is undisputed that EA is counsel of record

22 in the action.

23

24

25
The Receiver is not suggesting that Messrs. Ibrahim or Hearon are fundamentally
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inadequate to represent this Class, sans Avenatti’s involvement or influence. In
27 another set of circumstances (in which Avenatti and his influence is completely
removed from this case), the Receiver believes they are capable of doing so.
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1 Nevertheless, Avenatti contends he is lead Class counsel and EA (and the


2 receiver) has no standing, based on a statement this Court made in dicta when

3 denying Defendants’ motion to decertify the Class due to EA’s bankruptcy. Docket

4 No. 452 at 2 (“As an initial matter, the Court notes that class counsel is Michael

5 Avenatti, not Eagan Avenatti.”). However, the Court went on to explain that “[e]ven

6 if the Court refuses to treat lawyer Avenatti and the law firm of Eagan Avenatti as

7 separate entities, Defendants have not cited any controlling authority suggesting that

8 a law firm in Chapter 11 bankruptcy can no longer adequately serves as class

9 counsel.” Id. The Court then discussed the various reasons why EA could still serve

10 as adequate Class counsel while in bankruptcy, before ultimately holding that

11 Defendants failed to “demonstrate that Avenatti and his firm’s ability to competently
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12 and vigorously represent Plaintiff and the class has been in any way diminished by
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13 his law firm’s Chapter 11 filing.” Id. at 3.


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14 Moreover, as stated in the Motion, the Court has the ultimate authority (and
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15 responsibility) to select appropriate class counsel in class actions that are before it.

16 See Z-Seven Fund, Inc. v. Motorcar Parts & Accessories, 231 F.3d 1215, 1219 (9th

17 Cir. 2000); Fed. R. Civ. P. 23(g)(1)(B), (E); see also Committee Notes on Fed. R.

18 Civ. Proc. 23 – 2003 Amendment (“If, after review of all applicants, the court

19 concludes that none would be satisfactory class counsel, it may deny class

20 certification, reject all applications, recommend that an application be modified,

21 invite new applications, or make any other appropriate order regarding selection and

22 appointment of class counsel.”).

23 The single thing the Receiver, Messrs. Hearon and Ibrahim, Defendants, and
24 (surprisingly) Avenatti can agree on is that new Class counsel should be selected.

25 The Receiver has proposed an appropriate substitution in Messrs. Frank, Sims and

26 Stolper of FSS, who (i) have experience in prosecuting large, complex class actions

27 such as this case; (ii) formerly worked on this case for EA; and (iii) have no

28 allegiance to Avenatti. The Court is well within its authority to appoint FSS’

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1 attorneys as Class counsel if it deems that is the best choice.

2 B. The Receiver Attempted to Contact the Class Representative.


3 Avenatti’s second salvo is that the Motion should be denied on its face
4 because the Receiver failed to meet with Ms. Raschel Campos, Class Representative

5 for the BSC Class. Avenatti Opp. 9-10. Given the events that transpired, this is not

6 unlike slashing the tires of the car in front of you and then yelling at that driver for

7 having flat tires.

8 As stated in the Declaration of Brian Weiss in Support of the Receiver’s


9 Opposition to the Motion of Messrs. Hearon and Ibrahim (“Weiss Dec. Opp.”,

10 Docket No. 617-1), during the week of March 25, 2019, the Receiver had scheduled

11 a meeting with Ms. Campos. Ms. Campos abruptly cancelled the meeting later that
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12 week and has not returned any of his subsequent calls. Weiss Dec. Opp., ¶ 4; see
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13 also Declaration of John P. Reitman in Opposition to the Motion of Messrs. Hearon


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14 and Ibrahim (“Reitman Dec. Opp.” Docket No. 617-2), ¶ 2.


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15 The Receiver later learned through Mr. Hearon that Avenatti had contacted
16 Ms. Campos that same week (presumably to seek her support for the

17 Hearon/Ibrahim Motion). Reitman Dec. Opp. Docket No. 617-2), ¶ 2. Given the

18 timing of these events, it strains credulity that Ms. Campos’ “ghosting” of the

19 Receiver is unrelated to Avenatti contacting her. What is more likely is that

20 Avenatti cajoled Ms. Campos to cancel her meeting with the Receiver and to cease

21 communications with him. 2 In doing so, Avenatti violated the Receivership and

22 Restraining Order (In re Eagan Avenatti, 8:18-cv-01644-VAP-KES, Docket No. 53).

23 Avenatti further violated that order by supporting and pursuing Hearon/Ibrahim’s

24 motion for appointment as interim Class counsel.

25 Avenatti also claims the Receiver “has breached his fundamental duty to the
26

27
Based on Avenatti’s email to Mr. Devereaux, it is possible Avenatti threatened Ms.
2

28 Campos as well.

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1 client Bahamas by filing a motion opposed by the client and failing to even inform

2 the client of his course of action beforehand.” Avenatti Opp. 10:8-10. This is false,

3 given the above facts. Moreover, the Receiver had no fundamental duty to the BSC

4 Class, as he is not an attorney and the EA receivership estate is prohibited from

5 representing any of EA’s clients. Weiss Dec. Opp., Ex. 1, p. 5, ¶ 9.

6 Moreover, the Class Representative does not have the authority to select Class
7 counsel – only the Court does. A class representative’s preference for class counsel

8 “is not dispositive of the selection of class counsel.” Horne v. Smithfield Packing

9 Co., 2013 U.S. Dist. LEXIS 103712, at *5 (E.D.N.C. July 23, 2013); In re Bank of

10 Am. Sec. Litig., 210 F.R.D. 694, 703 (E.D. MO. 2002) (“A determination of what is

11 best for the class is not dependent on the special desires of the named plaintiffs.”).
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12 “The ultimate responsibility to ensure that the interests of class members are not
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13 subordinated to the interests of either the class representatives or class counsel rests
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14 with the district court.” Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072,
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15 1078 (2d Cir. 1995).

16 C. The Receiver has Conducted Due Diligence in selecting FSS.


17 Avenatti’s attack on the Receiver not being a lawyer and not conducting due
18 diligence is likewise baseless. Part of the Receiver’s job in winding down EA is to

19 find suitable replacement lawyers for the cases EA had been handling, now that EA

20 does not employ any lawyers for that purpose. This is what Receiver has been doing

21 in connection with all of EA’s cases, including this one. The Receiver is also

22 experienced in hiring attorneys in complex cases in which he acted and acts as a

23 fiduciary. See e.g. In re Walldesign, 8:12-bk-10105-CB (prosecution and

24 management of nearly 100 fraudulent transfer actions). Further, the Receiver

25 understands and exercised his fiduciary duties prior to reaching his conclusion that

26 FSS is best positioned to serve as Class counsel. Moreover, as stated above, the

27 ultimate decision of which counsel to select as Class counsel is reserved for this

28 Court to make, after due consideration.

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1 D. Avenatti’s Vitriol towards FSS is Unsubstantiated.


2 The most notable portion of the Avenatti Opp. is the six pages (11-16) he
3 spends slinging mud at his former colleagues. As Avenatti has made abundantly

4 clear, he is more than willing to ‘burn the entire house to the ground’ in an attempt

5 to get what he wants – anyone who disagrees with him is an enemy and no quarter is

6 given.

7 Avenatti’s vitriol-laced arguments against the qualifications and ethics of the


8 FSS lawyers are unsubstantiated. 3 The qualifications of the FSS lawyers speak for

9 themselves. And, consistent with the qualifications, this Court has previously

10 appointed Messrs. Frank and Sims as class counsel. See Birbrower v. Quorn Foods,

11 Inc., Case 2:16-cv-01346-DMG-AJW, Dkt. No. 83 at ¶ 5. 4 Avenatti’s arguments


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12 are paradoxical given that those lawyers were perfectly acceptable to Avenatti when
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13 he employed them and had them work on this matter prior to their departure from
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14 EA.
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15 Moreover, Avenatti has not presented any evidence that FSS’ members have
16 attempted to defraud anyone, much less their respective clients. On the other hand,

17 Avenatti is under a 36-count federal criminal indictment, and it is not as if Avenatti

18 is facing the prospect of the spending the rest of his life in federal prison for forging

19 postage stamps. Avenatti has been indicted for, inter alia, bank fraud, wire fraud,

20 tax evasion, and, most significantly, embezzling millions of dollars from his own

21 clients, and in the related New York case, attempting to extort Nike, Inc. for over

22 $20 million. Understandably, Avenatti has announced on Twitter and in numerous

23 media interviews that those charges are “bogus”; and he is entitled to the

24

25 3
See Receiver’s contemporaneously filed evidentiary objections to the (first)
Declaration of Michael Avenatti.
26

27 If this Court has any questions regarding the qualifications or ethics of the FSS
4

lawyers, the FSS lawyers welcome this Court to inquire, either in advance of, or at,
28 the hearing.

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1 presumption of innocent until proven guilty. However, this is not his criminal case

2 and the Court may draw on appropriate inferences from the evidence before it to

3 select proper Class counsel.

4 With respect to Avenatti’s biased assertion that FSS’ attorneys lack the proper
5 experience to prosecute this case on behalf of the Class, the same criticism applies

6 to Messrs. Hearon and Ibrahim. Footnote 1 of the Avenatti Opp. gives a laundry list

7 of Avenatti’s activities over the course of this litigation, purportedly without

8 significant assistance from anyone. If this is true, then it is just as true for Messrs.

9 Hearon and Ibrahim as it is for FSS. Given Avenatti’s assertion, the only reasonable

10 explanation for his strident advancement of the Hearon/Ibrahim motion is that

11 Avenatti believes he will be able to influence or control their activities for his own
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12 benefit in this case. In that regard, Avenatti (as Mr. Hearon acknowledged –
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13 Reitman Dec. Opp. ¶ 2) has done nothing to settle this case during the four years
LLP

14 since it was filed. Moreover, Avenatti has orchestrated the move of two additional
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15 cases against Kimberly-Clark to Mr. Ibrahim. Weiss Dec. Opp., ¶ 6. This creates a

16 potential conflict, as Mr. Ibrahim would be representing multiple separate plaintiffs

17 against the same defendant, all of which may have differing or conflicting goals and

18 strategies.

19 As the Ninth Circuit held, “[t]he responsibility of class counsel to absent class
20 members . . . does not permit even the appearance of divided loyalties of counsel.”

21 Kayes v. Pacific Lumber Co., 51 F3d 1449, 1465 (9th Cir. 1995). “The ‘appearance’

22 of divided loyalties refers to differing and potentially conflicting interests and is not

23 limited to instances manifesting such conflict.” Id. Consequently, when class

24 counsel represents a separate plaintiff against the same defendant, it creates the

25 “appearance” of a potential conflict that may require withdrawal even when there is

26 “no reason to believe improper influence had resulted from the representation of two

27 parties with conflicting interests.” Id., citing Sullivan v. Chase Ins. Servs. of Boston,

28 Inc., 79 F.R.D. 246, 258 (N.D. Cal. 1978).

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2 E. FSS Does Not Have a Conflict of Interest.


3 Avenatti’s argues that FSS would not be adequate Class counsel because one
4 of its members has judgments against EA and Avenatti, and (according to Avenatti)

5 would have an incentive to settle the case for below its value in an effort to collect

6 his judgments. This argument is wrong four times over.

7 First, the Court is required to approve any class action settlement, so this
8 eliminates the risk of an unreasonable settlement.

9 Second, contingency plaintiff’s lawyers always have a theoretical personal


10 economic interest in settling cases, since it guarantees payment. This is one reason

11 why courts are required to approve settlements and fees awards in class actions. The
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12 fact that one of the FSS lawyers has an economic incentive to successfully resolve
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13 this matter is thus no different than any other class action in this country.
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14 Third, Frank has over $15 million in judgements against EA and Avenatti
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15 ($10 million against EA and $5 million against Avenatti). Any resolution for the

16 Class that would result in a fee award that would cover Frank’s judgments (and

17 other creditors) would likely need to be higher than the actual judgment in this case

18 ($25M). Thus, there is no risk or incentive for FSS to accept a substandard

19 settlement.

20 Fourth, the fact that one of the partners at FSS has a strong personal economic
21 incentive to maximize the recovery for the Class is one of the advantages of

22 selecting FSS over other candidates. One of the unavoidable realities of replacing

23 Class counsel at this late stage is that any new lawyer appointed in this case will

24 face the issue that EA and/or Avenatti will be entitled to a substantial portion of any

25 fee award in this matter due to the work already performed. As a result, the purpose

26 behind the Ninth Circuit’s adoption of the percentage of the benefit method – i.e.,

27 aligning the economic interests of counsel and the Class to maximize recovery –

28 will be difficult to achieve with new counsel. See, e.g., Craft v. Cty. of San

9
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1 Bernardino, 624 F. Supp. 2d 1113, 1123 (C.D. Cal. 2008) (“In common fund class

2 action cases, the trend in the Ninth Circuit is to award fees based on the percentage

3 method. This method aligns the interests of counsel and the class by allowing class

4 counsel to directly benefit from increasing the size of the class fund.”) (citation

5 omitted). The fact that FSS are highly experienced and qualified class action

6 lawyers and have a strong economic incentive to maximize the recovery is a

7 combination that few other (if any) candidates can provide.

8 III. CONCLUSION
9 For all the foregoing reasons, the Receiver respectfully requests that his
10 Motion be granted.

11
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12 Dated: May 10, 2019 Respectfully submitted,


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

LANDAU GOTTFRIED & BERGER LLP


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13
LLP

14
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15 By: /s/ Jack A. Reitman


Jack A. Reitman
16 Attorneys for Brian Weiss, Court Appointed
Receiver of Eagan Avenatti, LLP
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Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 1 of 12 Page ID
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1 JOHN P. REITMAN (State Bar No. 80579)


jreitman@lgbfirm.com
2 JACK A. REITMAN (State Bar No. 283746)
jareitman@lgbfirm.com
3 LANDAU GOTTFRIED & BERGER LLP
1880 Century Park East, Suite 1101
4 Los Angeles, California 90067
Telephone: (310) 557-0050
5 Facsimile: (310) 557-0056

6 Attorneys for Brian Weiss,


Court Appointed Receiver of Eagan Avenatti, LLP
7

8 UNITED STATES DISTRICT COURT


9 CENTRAL DISTRICT OF CALIFORNIA - LOS ANGELES DIVISION
10

11 BAHAMAS SURGERY CENTER, Case No. 2:14-cv-08390-DMG


& B ERGER LLP

12
LLC, et al.,
RECEIVER’S EVIDENTIARY
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

13 Plaintiff, OBJECTIONS TO THE


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14 vs. DECLARATION OF MICHAEL J.


AVENATTI IN OPPOSITION TO
15 KIMBERLY-CLARK CORPORATION, RECEIVER’S MOTION
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16 a Delaware Corporation, and


HALYARD HEALTH, INC., a Delaware Hearing Date, Time, and Location:
17 Corporation, Date: May 24, 2019
Time: 9:30 a.m.
18 Place: Courtroom 8C
Defendants. 350 West 1st Street
19 Los Angeles, CA 90012
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1 Brian Weiss, the court appointed receiver (“Receiver”) of Eagan Avenatti,


2 LLP (“EA”) objects as follows to the Declaration of Michael J. Avenatti (the

3 “Declaration”) dated May 3, 2019, submitted in support of “Lead Class Counsel

4 Michael Avenatti’s Opposition to Receiver’s Motion for “Indicative Ruling” (1)

5 Removing Eagan Avenatti LLP and Michael Avenatti as Class Counsel and (2)

6 Appointing Jason M. Frank, Scott H. Sims, and Andrew D. Stolper of Frank, Sims &

7 Stolper, LLP as Leads Class Counsel [Dkt. 610].”

8
No. EVIDENCE RECEIVER’S OBJECTIONS
9
1 Declaration, ¶ 3 at 2:22-25 “This a) Improper attorney argument.
10
was not by accident – it is a Johnston v. IVAC Corp., 885 F.2d
11 reflection of the exceptional 1574, 1581 (Fed. Cir. 1989)
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quality of the legal work in this case (attorney argument is no substitute


12
consistently delivered by me, Mr.
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for evidence).
ATTORNEYS AT LAW

13 Hearon and Mr. Ibrahim.


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I can confidently state that few b) No foundation/lack of personal


14
lawyers in America could have knowledge. FRE 602.
15 obtained the verdict in this case.”
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16
2 Declaration, ¶ 5 at 3:4-5: “I have not a) Improper attorney argument.
17 been convicted of any crime and am Johnston v. IVAC Corp., 885 F.2d
18 entitled to a full presumption of 1574, 1581 (Fed. Cir. 1989)
innocence” (attorney argument is no substitute
19
for evidence).
20
b) Relevance. FRE 401, 402.
21
3 Declaration, ¶ 7 at 3:9-13: “The a) Improper attorney argument.
22 Receiver Brian Weiss is not an Johnston v. IVAC Corp., 885 F.2d
23 attorney or party in this action; the 1574, 1581 (Fed. Cir. 1989)
firm he purports to serve as the head (attorney argument is no substitute
24 of – EA – is not lead class counsel for evidence).
25 nor have they ever been lead class
counsel; the Receiver nor the firm b) Relevance. FRE 401, 402.
26 EA presently represents Bahamas in
27 this case nor any other party or class c) No foundation. FRE 602.
member in this case; and no party or
28
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1 class member to this action, let alone


2 the lead Plaintiff Bahamas, has
joined the motion filed by the
3 Receiver.”
4
4 Declaration, ¶ 8 at 3:14-15: “There a) Improper attorney argument.
5
is no evidence that the Receiver met Johnston v. IVAC Corp., 885 F.2d
6 and conferred with the lead plaintiff 1574, 1581 (Fed. Cir. 1989)
Bahamas, me, or any other plaintiff (attorney argument is no substitute
7
or class member before filing his for evidence).
8 motion.”
9 See also Declaration of Brian
Weiss in Support of the Receiver’s
10 Opposition to the Motion of
11 Messrs. Hearon and Ibrahim
[Docket No. 617-1].
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12
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Declaration, ¶ 9 at 3:16-18: “There


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5 a) Improper attorney argument.


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13 is no evidence that the Receiver


LLP

Johnston v. IVAC Corp., 885 F.2d


14
even bothered to inform lead 1574, 1581 (Fed. Cir. 1989)
plaintiff Bahamas or any other class
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(attorney argument is no substitute


15 member that the Receiver would be for evidence).
16
filing the Motion, let alone seek the
client’s consent.” See also Declaration of Brian
17 Weiss in Support of the Receiver’s
18 Opposition to the Motion of
Messrs. Hearon and Ibrahim
19 [Docket No. 617-1].
20 Declaration, ¶ 10 at 3:19-21: “The
6 a) Improper attorney argument.
21 Receiver lacks the experience Johnston v. IVAC Corp., 885 F.2d
required to choose class counsel and 1574, 1581 (Fed. Cir. 1989)
22 did nothing to investigate alternative (attorney argument is no substitute
23 class counsel prior to selecting for evidence).
attorneys Frank, Sims and Stolper.”
24 b) No foundation/lack of personal
25 knowledge. FRE 602.
26

27

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1 Declaration, ¶ 11 at 3:19-21: “The


7 a) Improper attorney argument.
2 Receiver is not a licensed attorney Johnston v. IVAC Corp., 885 F.2d
nor has he ever been. He has no 1574, 1581 (Fed. Cir. 1989)
3 legal training and never attended law (attorney argument is no substitute
4 school. He has never run a for evidence).
contingency/class action law firm
5 like EA. He has no experience in b) No foundation/lack of personal
6 complex class actions. Nor has he knowledge. FRE 602.
ever selected class counsel in a class
7 action, let alone a class action of this c) Relevance. FRE 401, 402.
8 magnitude.”
8 Declaration, ¶ 12 at 3:26-28 and 4:1- a) Improper attorney argument.
9 3: “The Receiver may be qualified to Johnston v. IVAC Corp., 885 F.2d
10 liquidate assets and wind down a 1574, 1581 (Fed. Cir. 1989)
manufacturing company with (attorney argument is no substitute
11 inventory, but he is wholly for evidence).
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12 unqualified to select class counsel in


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

a class of this size, especially when b) No foundation/lack of personal


GOTTFRIE D

13 he does so in opposition to the


LLP

knowledge. FRE 602.


14 wishes of a client he purports to
c) Relevance. FRE 401, 402.
L ANDAU

represent (Bahamas). Moreover,


15 there is no evidence that the
Receiver consulted with other class d) Inadmissible Lay
16
action firms or even explored the Opinion/Improper Expert Opinion.
17 possibility of having any firm FRE 701, 702.
18 assume the lead counsel position
before “choosing” Frank, Sims and
19 Stolper.”
20 9 Declaration, ¶ 13 at 4:4-28: “Frank, a) Improper attorney argument.
Sims and Stolper are not qualified to Johnston v. IVAC Corp., 885 F.2d
21
serve as class counsel in this matter 1574, 1581 (Fed. Cir. 1989)
22 because, as described in more detail (attorney argument is no substitute
below, (a) they assisted the for evidence).
23
Defendants in seeking to derail the
24 trial and disband the class in March b) Inadmissible Lay
of 2017, in direct violation of their Opinion/Improper Expert Opinion.
25
fiduciary duties; (b) they lack the FRE 701, 702.
26 relevant experience to successfully
represent the plaintiffs in this matter; c) Hearsay. FRE 802.
27
(c) they did very little work on this
28 matter before being fired from EA

4
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 5 of 12 Page ID
#:44098

1 and the work they did do was


2 supervised by me; (d) they were
fired from EA after they were
3 caught conspiring to steal clients and
4 documents from the firm and set up
a competing law firm, while at the
5 same time hiding their conduct and
6 being paid millions of dollars by EA
across many months; (e) their
7 appointment would create an
8 immediate conflict of interest with
the class; and (f) serious additional
9 ethical issues surround Frank, Sims
10 and Stolper as shown by, among
other things, Andrew Stolper’s
11 history of committing blatant
& B ERGER

12 attorney misconduct as evidenced


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

by, among other things, U.S. District


GOTTFRIE D

13 Court Judge Cormac Carney being


LLP

14 forced to dismiss serious criminal


L ANDAU

charges against multiple defendants


15 for what he described as more than
16 seven (7) unethical acts on Stolper’s
part, including suborning perjury
17 and witness intimidation.”
18 10 Declaration, ¶ 14 at 4:19-20: “In a a) Improper attorney argument.
scathing decision the likes of which Johnston v. IVAC Corp., 885 F.2d
19 are rarely seen, Judge Carney ruled 1574, 1581 (Fed. Cir. 1989)
20 on the record that Stolper had (attorney argument is no substitute
“forgot that truth is never for evidence).
21 negotiable.””
22 b) Inadmissible Lay
Opinion/Improper Expert Opinion.
23
FRE 701, 702.
24
c) Hearsay. FRE 802.
25
11 Declaration, ¶ 15 at 4:21-25: “Had a) Improper attorney argument.
26 the Receiver done any due diligence Johnston v. IVAC Corp., 885 F.2d
27 of any significance, the Receiver 1574, 1581 (Fed. Cir. 1989)
would have discovered the myriad (attorney argument is no substitute
28 of ethical problems plaguing Frank,
5
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 6 of 12 Page ID
#:44099

1 Sims and Stolper, including but not for evidence).


2 limited to their assistance of the
Defendants in this case on the eve of
3 trial in this matter. Shockingly, he b) No foundation. FRE 602.
4 failed to make any such inquiry
despite me advising him months ago
5 of the unethical conduct of Frank,
6 Sims and Stolper.”
12 Declaration, ¶ 16 at 4:26-28 and at a) Improper attorney argument.
7 5:1-8: “EA was never appointed Johnston v. IVAC Corp., 885 F.2d
8 class counsel. The only class 1574, 1581 (Fed. Cir. 1989)
counsel this Court has ever (attorney argument is no substitute
9 appointed in this case is me for evidence).
10 individually. Indeed, this fact was
affirmed immediately prior to trial b) No foundation. FRE 602.
11 by the Court when the defendants, at
& B ERGER

12 the urging of Messrs. Frank, Sims c) Relevance. FRE 401, 402.


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

and Stolper, attempted to use EA’s


GOTTFRIE D

13 Chapter 11 Bankruptcy filing to


LLP

14 derail the trial and decertify


L ANDAU

the class [Dkt. 412]. Moreover, prior


15 to the instant Motion, during years
16 of litigation, my appointment as lead
class counsel has never been
17 challenged nor have any of this
18 Court’s orders designating me as
lead counsel been appealed.
19 Accordingly, the “law of the case”
20 is clear and there can be no
argument that EA, as opposed to
21 Avenatti, is lead class counsel.
22 The Receiver has been advised of
this repeatedly by me over the last
23
few months – in writing and orally –
24 and yet he has repeatedly failed to
offer any evidence or documentation
25
to the contrary.”
26

27

28

6
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 7 of 12 Page ID
#:44100

1 Declaration, ¶ 17 at 5:9-11: “As


13 a) Improper attorney argument.
2 described more fully below, in May Johnston v. IVAC Corp., 885 F.2d
2016, Frank, Sims and Stolper were 1574, 1581 (Fed. Cir. 1989)
3 fired by EA after having been (attorney argument is no substitute
4 discovered to have been committing, for evidence).
among other things, fraud against
5 the firm across many months.” b) Improper legal conclusion.
6 Hubbard v. Twin Oaks Health &
Rehab Ctr., 408 F. Supp. 2d 923,
7 930 (E.D. Cal. 2004) (sustaining
8 objection because statements in
declaration constituted improper
9 legal conclusions and conclusory
10 statements without supporting
facts).
11
& B ERGER

12
c) Relevance. FRE 401, 402.
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

14 Declaration, ¶¶ 19, 20 at 5:15-21: a) Improper attorney argument.


GOTTFRIE D

13
LLP

“Frank, Sims and Stolper, angry Johnston v. IVAC Corp., 885 F.2d
14 about being fired by EA and EA’s 1574, 1581 (Fed. Cir. 1989)
L ANDAU

alleged subsequent failure to pay (attorney argument is no substitute


15
Mr. Frank monies due him, for evidence).
16 subsequently undertook efforts to
derail this case and infringe on the b) Improper legal conclusion.
17
rights of the class, namely by Hubbard v. Twin Oaks Health &
18 contacting counsel for the Rehab Ctr., 408 F. Supp. 2d 923,
19
Defendants and encouraging them to 930 (E.D. Cal. 2004) (sustaining
file a motion to delay the trial in this objection because statements in
20 matter, have EA replaced as class declaration constituted improper
21
counsel (even though EA was never legal conclusions and conclusory
class counsel) and decertify the statements without supporting
22 class.” facts).
23
...
“They did so in direct violation of c) Relevance. FRE 401, 402.
24 their fiduciary duties to the plaintiff
and the class, as they had done d) No foundation. FRE 602.
25
limited work on the case prior to
26 being terminated.”
27

28

7
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 8 of 12 Page ID
#:44101

1 Declaration, ¶¶ 21, 22 at 5:22-28


15 a) Relevance. FRE 401, 402.
2 and 6:1-6: “On Friday, May 20,
2016, at approximately 11:00 a.m., b) No foundation. FRE 602.
3 EA’s management discovered by
4 shear happenstance that Frank, Sims
and Stolper had been spending,
5 since at least March 2016 (later
6 discovered to be February),
considerable time and effort during
7 working hours and while employed
8 at EA forming a competing law firm
and scheming to steal cases and
9 clients of EA’s in the months to
10 follow. The three attorneys did so at
the same time they were being
11 highly compensated by the firm and
& B ERGER

12 while purposely taking steps to hide


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

their activities from the firm,


GOTTFRIE D

13 including through the use of


LLP

14 personal e-mail accounts and bogus


L ANDAU

firm names.”
15 ...
16 “Within two hours of this discovery
by the firm, the three attorneys were
17 locked out of the firm’s offices and
18 computer systems. For instance,
Mr. Sims was told to immediately
19 pack his personal belongings and
20 leave, and was subsequently
physically escorted out of the firm’s
21 offices.”
22 16 Declaration, ¶¶ 24-25 at 6:9-17: a) Improper attorney argument.
“Judge Carney’s Order dismissing Johnston v. IVAC Corp., 885 F.2d
23
serious criminal charges and 1574, 1581 (Fed. Cir. 1989)
24 cratering the government’s (attorney argument is no substitute
prosecution after years of work in for evidence).
25
the Broadcom matter, all as a result
26 of numerous instances of b) Inadmissible Lay
prosecutorial misconduct carried out Opinion/Improper Expert Opinion.
27
by Mr. Stolper as the lead FRE 701, 702.
28 prosecutor, have significant

8
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 9 of 12 Page ID
#:44102

1 importance to the Court’s c) Hearsay. FRE 802.


2 determination of the motion.”
...
3 “The detailed, conclusive findings in
4 that case, including subjoining
perjury, witness tampering, and
5 leaking grand jury testimony to the
6 media before trial (Los Angeles
Times and Wall Street Journal),
7 coupled with the lack of any
8 evidence of rehabilitation by
Mr. Stolper or remorse, render
9 Frank, Sims and Stolper unqualified
10 to serve as class counsel in this
case.”
11 Declaration, ¶ 26 at 6:18-21:
17 a) Improper attorney argument.
& B ERGER

12 “Contrary to their claims, Messrs. Johnston v. IVAC Corp., 885 F.2d


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

Frank, Sims and Stolper did very 1574, 1581 (Fed. Cir. 1989)
GOTTFRIE D

13 little work on this case prior to their


LLP

(attorney argument is no substitute


14 termination from EA in May 2016, for evidence).
L ANDAU

nearly one year before trial and


15 before the filing of the Motion for
16 Class Certification. And the work
they did perform was supervised by
17 me.”
18 18 Declaration, ¶ 29 at 7:1-5: “This a) Improper attorney argument.
alone shows that their personal Johnston v. IVAC Corp., 885 F.2d
19 animus towards me is likewise a 1574, 1581 (Fed. Cir. 1989)
20 disqualifying factor. Regardless of (attorney argument is no substitute
the charges I presently face, none of for evidence).
21
those charges relate to this case.
22 More importantly, I have a wealth of
unsurpassed knowledge concerning
23
this case, the trial, witnesses,
24 documents, facts and the relevant
law, all as a result of the thousands
25
of hours I have devoted to this case
26 for years.”
27

28

9
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 10 of 12 Page ID
#:44103

1 Declaration, ¶ 30 at 7:8-9: “Simply


19 a) Improper attorney argument.
2 put, Frank, Sims and Stolper lack Johnston v. IVAC Corp., 885 F.2d
such experience and are not “trial 1574, 1581 (Fed. Cir. 1989)
3 lawyers.”” (attorney argument is no substitute
4 for evidence).
5 b) No foundation. FRE 602.
6
c) Inadmissible Lay
7 Opinion/Improper Expert Opinion.
8
FRE 701, 702.

20 Declaration, ¶¶ 31-33 at 7:10-24: a) Improper attorney argument.


9
“Mr. Sims has never given an Johnston v. IVAC Corp., 885 F.2d
10 opening or closing argument in his 1574, 1581 (Fed. Cir. 1989)
career nor has he handled any (attorney argument is no substitute
11
meaningful cross-examinations of
& B ERGER

for evidence).
12 any witnesses. His real-world trial
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

experience is extremely limited. His b) No foundation. FRE 602.


GOTTFRIE D

13
LLP

skill lies in preparing motions and


14 pleadings. And occasionally, but not c) Inadmissible Lay
L ANDAU

often, arguing a motion or appeal. Opinion/Improper Expert Opinion.


15
This case is too significant and FRE 701, 702.
16 complex to serve as a training
ground for Mr. Sims to get “first
17
chair” experience.”
18 ...
19
“Mr. Frank has first chaired one
minor case in his career – years ago
20 – and has never given an opening
21
statement or closing argument in any
meaningful case. Moreover, the
22 number of witnesses that he has
23
examined at trial in the last ten years
is extremely limited. Mr. Frank may
24 be an adequate pre-trial lawyer and
25 may properly prepare cases for
quick settlement, but he does not
26 have the skill set necessary to try a
27 case of this magnitude to a jury.”
...
28

10
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 11 of 12 Page ID
#:44104

1 “Mr. Stolper has previously


2 exhibited significant unethical
conduct rendering him unable to
3 serve as class counsel. Moreover,
4 Mr. Stolper has yet to give a single
opening or closing argument in any
5 substantial civil matter nor does he
6 have relevant civil trial experience,
especially during the last ten years.”
7 Declaration, ¶ 34 at 7:26-27 and 8:1-
21 a) Improper attorney argument.
8 2: “Frank, Sims and Stolper, Johnston v. IVAC Corp., 885 F.2d
however, do not represent any real 1574, 1581 (Fed. Cir. 1989)
9 threat due to their lack of experience (attorney argument is no substitute
10 obtaining trial results as lead for evidence).
counsel. This is too important of a
11 case to be handled by counsel with b) No foundation. FRE 602.
& B ERGER

12 inadequate experience.”
LOS ANGELES, CALIFORNIA

c) Inadmissible Lay
ATTORNEYS AT LAW
GOTTFRIE D

13 Opinion/Improper Expert Opinion.


LLP

14 FRE 701, 702.


L ANDAU

15 22 Declaration, ¶ 35 at 8:3-5: “Messrs. a) Improper attorney argument.


Frank, Sims and Stolper have Johnston v. IVAC Corp., 885 F.2d
16 extremely limited resources as a 1574, 1581 (Fed. Cir. 1989)
17
three person firm and also have very (attorney argument is no substitute
little experience arguing before the for evidence).
18 Federal Courts of Appeal. This
19
alone is disqualifying.” b) No foundation. FRE 602.

20 c) Inadmissible Lay
Opinion/Improper Expert Opinion.
21
FRE 701, 702.
22
23 Declaration, ¶¶ 36-38 at 8:6-12: a) Improper attorney argument.
23 “The goal of Frank, Sims and Johnston v. IVAC Corp., 885 F.2d
Stolper is clear – to be appointed 1574, 1581 (Fed. Cir. 1989)
24
class counsel and settle this case as (attorney argument is no substitute
25 quickly as possible for an amount for evidence).
that will permit an award of
26
attorneys’ fees sufficient to pay b) No foundation. FRE 602.
27 Jason Frank and Jason Frank alone.”
... c) Improper legal conclusion.
28

11
Case 2:14-cv-08390-DMG-PLA Document 622-1 Filed 05/10/19 Page 12 of 12 Page ID
#:44105

1 “Frank, Sims and Stolper have no Hubbard v. Twin Oaks Health &
2 incentive to maximize the recovery Rehab Ctr., 408 F. Supp. 2d 923,
for any other party – not plaintiff, 930 (E.D. Cal. 2004) (sustaining
3 not the class, not EA and not other objection because statements in
4 counsel.” declaration constituted improper
... legal conclusions and conclusory
5 “Were Frank, Sims and Stolper to be statements without supporting
6 appointed, an immediate conflict of facts).
interest would arise between lead
7 counsel and the class.”
8 24 Declaration, ¶ 39, Ex. 1. a) Hearsay. FRE 802.
9

10

11
Declaration, ¶ 40, Ex. 2.
& B ERGER

12
25 a) Hearsay. FRE 802.
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW
GOTTFRIE D

13
LLP

14
L ANDAU

15
26 Declaration, ¶ 41, Ex. 3. a) Hearsay. FRE 802.
16

17

18

19

20
Dated: May 10, 2019 Respectfully submitted,
21
LANDAU GOTTFRIED & BERGER LLP
22

23
By: /s/ Jack A. Reitman
24 Jack A. Reitman
25
Attorneys for Brian Weiss, Court Appointed
Receiver of Eagan Avenatti, LLP
26

27

28

12
Case 2:14-cv-08390-DMG-PLA Document 622-2 Filed 05/10/19 Page 1 of 4 Page ID
#:44106

1 JOHN P. REITMAN (State Bar No. 80579)


jreitman@lgbfirm.com
2 JACK A. REITMAN (State Bar No. 283746)
jareitman@lgbfirm.com
3 LANDAU GOTTFRIED & BERGER LLP
1880 Century Park East, Suite 1101
4 Los Angeles, California 90067
Telephone: (310) 557-0050
5 Facsimile: (310) 557-0056

6 Attorneys for Brian Weiss,


Court Appointed Receiver of Eagan Avenatti, LLP
7

8 UNITED STATES DISTRICT COURT


9 CENTRAL DISTRICT OF CALIFORNIA - LOS ANGELES DIVISION
10

11 BAHAMAS SURGERY CENTER, Case No. 2:14-cv-08390-DMG


& B ERGER LLP

12
LLC, et al.,
RECEIVER’S EVIDENTIARY
LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

13 Plaintiff, OBJECTIONS TO THE


GOTTFRIE D

14 vs. DECLARATION OF MICHAEL J.


AVENATTI IN SUPPORT OF
15 KIMBERLY-CLARK CORPORATION, WILLIAM C. HEARON AND
L ANDAU

16 a Delaware Corporation, and AHMED IBRAHIM’S MOTION TO


HALYARD HEALTH, INC., a Delaware APPOINT CLASS COUNSEL [DKT
17 Corporation, 609]
18
Defendants. Hearing Date, Time, and Location:
19 Date: May 24, 2019
Time: 9:30 a.m.
20 Place: Courtroom 8C
350 West 1st Street
21 Los Angeles, CA 90012
22

23

24

25

26

27

28
Case 2:14-cv-08390-DMG-PLA Document 622-2 Filed 05/10/19 Page 2 of 4 Page ID
#:44107

1 Brian Weiss, the court appointed receiver (“Receiver”) of Eagan Avenatti,


2 LLP (“EA”) objects as follows to the Declaration of Michael J. Avenatti (the

3 “Declaration”) dated May 10, 2019, submitted in support of “William C. Hearon and

4 Ahmed Ibrahim’s Motion to Appoint Class Counsel [Dkt. 609]”:

5
No. EVIDENCE RECEIVER’S OBJECTIONS
6
1 Declaration, ¶ 3 at 2:22-25 “This a) Improper attorney argument.
7
was not by accident – it is a Johnston v. IVAC Corp., 885 F.2d
8 reflection of the exceptional 1574, 1581 (Fed. Cir. 1989)
quality of the legal work in this case (attorney argument is no substitute
9
consistently delivered by me, Mr. for evidence).
10 Hearon and Mr. Ibrahim.
I can confidently state that few b) No foundation/lack of personal
11
lawyers in America could have knowledge. FRE 602.
& B ERGER LLP

12 obtained the verdict in this case.”


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

13 2 Declaration, ¶ 4 at 3:2-5: “Mr. Frank a) Improper attorney argument.


selected Mr. Weiss as his “hand-
GOTTFRIE D

14 Johnston v. IVAC Corp., 885 F.2d


picked” receiver. Mr. Weiss now 1574, 1581 (Fed. Cir. 1989)
15 appears to be re-paying the favor by
L ANDAU

(attorney argument is no substitute


attempting to have this Court for evidence).
16
appoint Mr. Frank as class counsel.
17 This quid pro quo is patently b) Relevance. FRE 401, 402.
improper.”
18 c) No foundation/lack of personal
19 knowledge. FRE 602.
20 d) Inadmissible Lay
Opinion/Improper Expert Opinion.
21
FRE 701, 702.
22
e) Improper legal conclusion.
23 Hubbard v. Twin Oaks Health &
24 Rehab Ctr., 408 F. Supp. 2d 923,
930 (E.D. Cal. 2004) (sustaining
25 objection because statements in
26 declaration constituted improper
27

28
2
Case 2:14-cv-08390-DMG-PLA Document 622-2 Filed 05/10/19 Page 3 of 4 Page ID
#:44108

1
legal conclusions and conclusory
2 statements without supporting
facts).
3
3 Declaration, ¶ 5 at 3:6-12: “Mr. a) Improper attorney argument.
4
Weiss is not an attorney and has no Johnston v. IVAC Corp., 885 F.2d
5 ability to provide legal services to 1574, 1581 (Fed. Cir. 1989)
clients or counsel clients. He has no (attorney argument is no substitute
6
license to practice law nor for evidence).
7 experience doing so. As a result,
following his appointment as the b) Relevance. FRE 401, 402.
8
Receiver of EA, certain clients of
9 the firm decided to change
representation from EA to Mr.
10
Ibrahim. There was nothing
11 improper about this nor is there any
& B ERGER

court order precluding such clients


12
LOS ANGELES, CALIFORNIA

from changing representation. Nor


ATTORNEYS AT LAW
GOTTFRIE D

13 could there be, because it is well


LLP

established under the law that THE


14
CLIENT controls who represents
L ANDAU

15 them – NOT THE ATTORNEY OR


A RECEIVER.”
16

17
4 Declaration, ¶ 6 at 3:13-18: “A a) Improper attorney argument.
18
client can discharge an attorney or Johnston v. IVAC Corp., 885 F.2d
law firm for any reason at any time 1574, 1581 (Fed. Cir. 1989)
19 under black letter law in California. (attorney argument is no substitute
20 I have explained this basic fact to for evidence).
the Receiver and his counsel
21 repeatedly to no avail. b) Relevance. FRE 401, 402.
22 Unfortunately, however, they
believe that clients of EA are like c) Lack of foundation. FRE 602.
23 inventory at a widget factory and
24 thus the Receiver can dictate what
happens to clients of EA and who
25 they chose as their counsel. I have
26 asked for support for their position
and have received none. ”
27

28

3
Case 2:14-cv-08390-DMG-PLA Document 622-2 Filed 05/10/19 Page 4 of 4 Page ID
#:44109

1 Declaration, ¶ 7 at 3:19-25: “As [sic]


5 a) Improper attorney argument.
2 no time have I “transferred” any Johnston v. IVAC Corp., 885 F.2d
case from EA to Mr. Ibrahim. 1574, 1581 (Fed. Cir. 1989)
3 Moreover, I have never been under (attorney argument is no substitute
4 any obligation to seek the consent of for evidence).
the Receiver for EA before signing a
5 substitution of counsel at the request
6 of a client. Nor is there any
obligation that I inform him before
7 doing so, although I have in certain
8 circumstances. Accordingly, when
certain clients of EA have requested
9 that I sign a substitution of counsel
10 or notice of withdrawal, I have
promptly done so as is my
11 obligation. To do otherwise would
& B ERGER

12 constitute a breach of my fiduciary


LOS ANGELES, CALIFORNIA
ATTORNEYS AT LAW

duty.”
GOTTFRIE D

13 Declaration, ¶ 8 at 3:26-27: “I never


LLP

6 a) Improper attorney argument.


14 advised the Class Representative Johnston v. IVAC Corp., 885 F.2d
L ANDAU

Ms. Campos to not speak to the 1574, 1581 (Fed. Cir. 1989)
15 Receiver or avoid him. Any (attorney argument is no substitute
16 suggestion to the contrary is for evidence).
baseless.” (emphasis added).
17

18

19

20 Dated: May 10, 2019 Respectfully submitted,


21 LANDAU GOTTFRIED & BERGER LLP
22

23 By: /s/ Jack A. Reitman


24 Jack A. Reitman
Attorneys for Brian Weiss, Court Appointed
25 Receiver of Eagan Avenatti, LLP
26

27

28

4
Case 2:14-cv-08390-DMG-PLA Document 621 Filed 05/10/19 Page 1 of 4 Page ID #:44080

Michael J. Avenatti, Esq. (Bar No. 206929)


1 10000 Santa Monica Blvd
Los Angeles, CA 90067
2 Tel: (949) 887-4118
m@thefight.us
3
Attorney for Bahamas Surgery Center, LLC;
4 Michael Avenatti; and Avenatti & Associates, APC
5
6
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10
11 BAHAMAS SURGERY CENTER, LLC,
CASE NO.: 14-CV-08390 DMG (PLA)
12
Plaintiff, SUPPLEMENTAL DECLARATION
13 vs. OF MICHAEL J. AVENATTI IN
14 KIMBERLY-CLARK CORPORATION, SUPPORT OF WILLIAM C.
a Delaware Corporation, and HALYARD HEARON AND AHMED
15 HEALTH, INC., a Delaware
Corporation, IBRAHIM’S MOTION TO APPOINT
16 CLASS COUNSEL [DKT 609]
17 Defendants. Hearing:
18 Date: May 24, 2019
Time: 9:30 a.m.
19
Place: Courtroom 8C
20 350 West 1st Street
Los Angeles, CA 90012
21
22
23
24
25
26
27
28

SUPPLEMENTAL DECLARATION OF MICHAEL J. AVENATTI IN SUPPORT OF WILLIAM C. HEARON


AND AHMED IBRAHIM’S MOTION TO APPOINT CLASS COUNSEL [DKT 609]
Case 2:14-cv-08390-DMG-PLA Document 621 Filed 05/10/19 Page 2 of 4 Page ID #:44081

1 DECLARATION OF MICHAEL J. AVENATTI


2 I, Michael J. Avenatti, declare:
3 1. I am an attorney duly admitted to practice before this Court. I am currently
4 lead class counsel for Plaintiff Bahamas Surgery Center, LLC (“Bahamas” or “Plaintiff”)
5 on behalf of itself and the class of persons and entities similarly situated. I was appointed
6 individually as lead class counsel by this Court on November 14, 2016 (Dkt 270 at p. 35),
7 a ruling that was later reaffirmed by this Court on March 24, 2017 (Dkt 452). I have
8 personal knowledge as to all matters set forth in this Declaration, and if called to testify,
9 could and would competently testify thereto. I submit this declaration to address various
10 issues raised in connection with the Receiver’s Opposition [Dkt. 617].
11 2. I (a) originated this complex case years ago; (b) have served as lead counsel
12 on the matter since its inception; (c) have supervised all work done on the case since its
13 inception, including the very limited work done by Jason Frank (“Frank”), Scott Sims
14 (“Sims”) and Andrew Stolper (“Stolper”), all of whom reported to me while they worked
15 at Eagan Avenatti, LLP (“EA”); (d) have been the ultimate decisionmaker on virtually all
16 major aspects of the case before, during and after trial; (e) have devoted thousands of hours
17 of work on the case before, during and after trial; (f) have argued numerous key motions
18 prior to and during trial; (g) have been responsible for nearly every major deposition taken
19 in the case; and (h) presented the opening and closing arguments at trial and examined
20 approximately 80% of the witnesses at trial, including numerous key witnesses.
21 3. As a result of my work, together with that of Messrs. Hearon and Ibrahim, the
22 plaintiffs obtained a jury verdict of over $454 million - one of the largest class action
23 verdicts of the last five years. This was not by accident – it is a reflection of the exceptional
24 quality of the legal work in this case consistently delivered by me, Mr. Hearon and Mr.
25 Ibrahim. I can confidently state that few lawyers in America could have obtained the
26 verdict in this case.
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SUPPLEMENTAL DECLARATION OF MICHAEL J. AVENATTI IN SUPPORT OF WILLIAM C. HEARON
AND AHMED IBRAHIM’S MOTION TO APPOINT CLASS COUNSEL [DKT 609]
Case 2:14-cv-08390-DMG-PLA Document 621 Filed 05/10/19 Page 3 of 4 Page ID #:44082

1 4. Earlier this year, Brian Weiss was appointed as the Receiver over Eagan
2 Avenatti, LLP (“EA”) at the specific request of Jason Frank, a creditor of EA. Mr. Frank
3 selected Mr. Weiss as his “hand-picked” receiver. Mr. Weiss now appears to be re-paying
4 the favor by attempting to have this Court appoint Mr. Frank as class counsel. This quid
5 pro quo is patently improper.
6 5. Mr. Weiss is not an attorney and has no ability to provide legal services to
7 clients or counsel clients. He has no license to practice law nor experience doing so. As a
8 result, following his appointment as the Receiver of EA, certain clients of the firm decided
9 to change representation from EA to Mr. Ibrahim. There was nothing improper about this
10 nor is there any court order precluding such clients from changing representation. Nor
11 could there be, because it is well established under the law that THE CLIENT controls who
12 represents them – NOT THE ATTORNEY OR A RECEIVER.
13 6. A client can discharge an attorney or law firm for any reason at any time under
14 black letter law in California. I have explained this basic fact to the Receiver and his
15 counsel repeatedly to no avail. Unfortunately, however, they believe that clients of EA are
16 like inventory at a widget factory and thus the Receiver can dictate what happens to clients
17 of EA and who they chose as their counsel. I have asked for support for their position and
18 have received none.
19 7. As no time have I “transferred” any case from EA to Mr. Ibrahim. Moreover,
20 I have never been under any obligation to seek the consent of the Receiver for EA before
21 signing a substitution of counsel at the request of a client. Nor is there any obligation that
22 I inform him before doing so, although I have in certain circumstances. Accordingly, when
23 certain clients of EA have requested that I sign a substitution of counsel or notice of
24 withdrawal, I have promptly done so as is my obligation. To do otherwise would constitute
25 a breach of my fiduciary duty.
26` 8. I never advised the Class Representative Ms. Campos to not speak to the
27 Receiver or avoid him. Any suggestion to the contrary is baseless. I have communicated
28 with Ms. Campos in accordance with my obligations as Lead Class Counsel.
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SUPPLEMENTAL DECLARATION OF MICHAEL J. AVENATTI IN SUPPORT OF WILLIAM C. HEARON
AND AHMED IBRAHIM’S MOTION TO APPOINT CLASS COUNSEL [DKT 609]
Case 2:14-cv-08390-DMG-PLA Document 621 Filed 05/10/19 Page 4 of 4 Page ID #:44083

1 9. Until recently, I also represented other parties suing the Defendants. This was
2 a well-known fact to the Defendants and was publicly disclosed in the media. At no time
3 has any objection been raised as to any alleged conflict with my role as Lead Class Counsel
4 in this case.
5 I declare under the penalty of perjury under the laws of the United States of America
6 that the foregoing is true and correct. Executed on this 10th day of May, 2019 in Los
7 Angeles, California.
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/s/ Michael J. Avenatti
10 Michael J. Avenatti
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SUPPLEMENTAL DECLARATION OF MICHAEL J. AVENATTI IN SUPPORT OF WILLIAM C. HEARON
AND AHMED IBRAHIM’S MOTION TO APPOINT CLASS COUNSEL [DKT 609]