Opinion ID: 3187214
Heading Depth: 2
Heading Rank: 1

Heading: The Securities-Fraud Class Action

Text: In 2002 a class of plaintiffs retained the Joyce firm to prosecute a securities-fraud action against EPS Solutions Corporation and Enterprise Profit Solutions Corporation (collectively, “EPS”). Under the retainer agreement, the Joyce firm would receive a $200,000 flat fee and 25% of any award or settlement, plus reimbursement of costs. The agreement permitted the Joyce firm to retain local counsel outside Illinois if the firm deemed such assistance necessary, with 1Bolded words appear as they do in the policy and are terms specially defined in section (D) of the policy. 4 No. 14-3341 any resulting third-party legal fees to be treated as costs under the agreement. In 2007 the Joyce firm won a substantial arbitration award against EPS. By that point, however, EPS had become insolvent, and its insurers were the only source of funding to collect on the award. This is where the dispute between the firm and its clients arose. The Joyce firm thought it had fully satisfied its obligations under the terms of the original retainer agreement by securing the arbitration award. The firm recommended the retention of Morgan, Lewis & Bockius LLP, a California law firm, to handle the collection litigation against EPS’s insurers. The clients, however—or at least a large subset of the class that later pursued a claim against the Joyce firm— thought the firm should have continued to represent them under the terms of the original retainer agreement. Regardless, the Joyce firm arranged for Morgan Lewis and later Reed Smith LLP to pursue the insurance litigation. Because of its “intimate knowledge of the facts and legal theories,” the Joyce firm assisted in the litigation on an hourly-fee basis, with payment deferred until and only if there was an actual recovery. The case ultimately settled when EPS’s insurers agreed to pay $8.6 million.