Court Opinion

ID: 4151743
Source: CourtListenerOpinion
Date Created: 2017-03-10 16:01:30.159529+00
Date Added: 2024-06-11T12:58:03.562262
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

 ZVI SHTAUBER,

         Plaintiff,
                 v.                                         Civil Action No. 16-961 (JDB)
 ALLAN GERSON,

         Defendant.

                                  MEMORANDUM OPINION

       Allan Gerson, the defendant and an attorney, contracted with Zvi Shtauber, the plaintiff,

for Shtauber to provide services to assist Gerson in a lawsuit. Their contract specified a fee-sharing

arrangement, where Gerson would share with Shtauber a portion of any contingency fee he earned

from the lawsuit. Shtauber alleges that Gerson failed to pay, and now sues for enforcement of that

contract, or alternatively for recovery in quantum meruit, and for a declaratory judgment that he is

entitled to a portion of Gerson’s fees in the future. Gerson moves to dismiss, arguing that the

contract is unenforceable as contrary to public policy because a fee-sharing contract between a

lawyer and a nonlawyer violates the D.C. Rules of Professional Conduct, and that Shtauber cannot

pursue a claim for quantum meruit when there is a contract between the parties. The Court will

deny Gerson’s motion.

                                         BACKGROUND

       The facts relating to the contract’s formation are largely undisputed, although it seems that

the facts regarding performance on the contract are hotly disputed. What follows is the plaintiff’s

version of events. According to Shtauber, Allan Gerson is a well-known D.C. attorney. Complaint

[ECF No. 1] ¶ 5. In 2004, Gerson explored the possibility of suing Arab Bank and other financial

                                                  1
institutions “on behalf of victims of genocide and terrorism in Israel and in territories administered

by the Palestinian Authority.” Id. Gerson hired Shtauber to assist in the lawsuit. Id. ¶ 6. Shtauber,

a resident of Israel, has experience in relevant fields of national security and has served as both the

Foreign Policy Advisor to the Israeli Prime Minister and as Israel’s Ambassador to the United

Kingdom. Id. Shtauber connected Gerson to an Israeli attorney, David Mena, to help litigate the

case against Arab Bank, and provided additional “consulting services” in connection with Gerson’s

suit. Id. ¶ 7.

        Gerson and Shtauber entered into an Agreement on April 21, 2005 regarding payment for

Shtauber’s services. Id. ¶ 8; see Agreement [ECF No. 1-2]. The Agreement provides that Gerson

and another attorney (together, the “Gerson Group”) had entered into a joint counsel arrangement

with another law firm, Motley Rice LLC, to litigate the claims against Arab Bank. Agreement ¶ 2;

Compl. ¶ 9. The Agreement acknowledges that Shtauber had provided valuable services already,

and states that “Shtauber’s primary responsibility in the future shall be . . . consultative work with

regard to investigative/political/public affairs aspects” of the case, and to “assist in liaising with”

Mena. Agreement ¶ 3; Compl. ¶¶ 10–11. The Agreement also states that Shtauber is entitled to

20% of any contingent fees paid to the Gerson Group from claims referred to them by Mena.

Agreement ¶¶ 3–4; Compl. ¶ 12. It also requires Gerson to provide monthly status reports to

Shtauber regarding the fees, and states that Shtauber was not required to incur any expenses.

Agreement ¶¶ 8, 10; Compl. ¶¶ 15–16.

        Shtauber alleges that Gerson has breached the Agreement by failing to pay him the required

fees. Id. ¶ 18. (The underlying litigation against Arab Bank reached a partial settlement in 2016,

and thus Gerson and his co-counsel are entitled to fees. Def.’s Mot. to Dismiss [ECF No. 5] at 2.

Further, Shtauber alleges that Gerson has failed to provide the required status reports, and has

                                                  2
required Shtauber to incur expenses (namely, legal fees) in breach of the Agreement. Compl. ¶¶

19–20. In Count I, Shtauber seeks to recover damages under the contract, which he estimates at

$160,000 plus interest. Id. ¶ 23. In Count II, he seeks quantum meruit, i.e. compensation for the

reasonable value of his services, estimated at $720,000 plus interest. Id. ¶ 29. In Count III, he

seeks a declaratory judgment that he is entitled to 20% of all contingent fees that the Gerson Group

is paid on claims referred by Mena. Id. ¶ 34.

       Gerson, unsurprisingly, disputes Shtauber’s claims. He has filed a motion to dismiss for

failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Gerson agrees that the two

entered into a contract for Shtauber to provide consulting services related to Gerson’s litigation

against Arab Bank. He argues, however, that Counts I and III must be dismissed because the

contract is unenforceable as against public policy because the D.C. Rules of Professional Conduct

for attorneys bar fee-sharing with non-lawyers. See Mot. to Dismiss at 3 (citing D.C. Rules of

Prof. Conduct Rule 5.4(a) (2005)). Count II, he argues, must be dismissed as well because it is

not plead with sufficient particularity, and because under D.C. law quantum meruit can only be

sought when there is no valid contract. Id. at 5, 7.

                                       LEGAL STANDARD

       When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a

court presumes the truth of a complaint’s factual allegations, though it is “not bound to accept as

true a legal conclusion couched as a factual allegation.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (internal quotation marks omitted). The court then asks whether the facts alleged

suffice “to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (internal quotation marks omitted). On a motion to dismiss, the court considers “facts

alleged in the complaint, any documents either attached to or incorporated in the complaint and

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matters of which [the court] may take judicial notice.” Mpoy v. Rhee, 758 F.3d 285, 291 n.1 (D.C.

Cir. 2014) (internal quotation marks omitted). Because the Agreement was attached to Shtauber’s

complaint, it will be considered in connection with Gerson’s motion to dismiss.

         Here, the District of Columbia’s contract law applies, as per the terms of the Agreement.

See Agreement ¶ 11.           “When deciding state-law claims under diversity or supplemental

jurisdiction, federal courts apply the choice-of-law rules of the jurisdiction in which they sit.”

Mastro v. Potomac Elec. Power Co., 447 F.3d 843, 857 (D.C. Cir. 2006) (internal quotation marks

omitted). Under District of Columbia law, the parties to a contract may agree upon the law they

wish to apply, so long as there is some reasonable relationship with the state specified. Ekstrom

v. Value Health, Inc., 68 F.3d 1391, 1394 (D.C. Cir. 1995) (citing Norris v. Norris, 419 A.2d 982,

984 (D.C. 1980)). Despite some quibbling over this issue in the parties’ briefs, the contract itself

clearly states that it “shall be governed by the law of the District of Columbia.” Agreement ¶ 11.

                                                 ANALYSIS

    I.       Counts I and III

         Gerson argues that the fee sharing arrangement is forbidden by the D.C. Rules of

Professional Conduct (“Rules”) in effect at the time, and therefore is unenforceable as against

public policy. Shtauber responds that the Agreement is not contrary to the Rules, but even if it is,

it’s still enforceable.

         The Agreement was signed in 2005. At the time, Rule 5.4(a) of the D.C. Rules of

Professional Conduct stated: “A lawyer or law firm shall not share legal fees with a nonlawyer”

and then provided four exceptions. 1 See also D.C. Code § 11-2501 (attorneys admitted to the D.C.

bar are subject to the Rules). The first two exceptions concern payments to an attorney’s estate

         1
           The Rules were substantially amended in 2007. All references to the Rules in this opinion refer to the
version in effect in 2005, unless otherwise noted.

                                                       4
after death. The third exception states a “lawyer or law firm may include nonlawyer employees in

a compensation or retirement plan, even though the plan is based in whole or in part on a profit

sharing arrangement.” Rule 5.4(a)(3). The fourth states that fee sharing “is permitted in a

partnership or other form of organization” that meets specified requirements, as laid out in Rule

5.4(b), for a nonlawyer to exercise managerial authority over the firm or have a financial interest

in the firm. Id. 5.4(a)(4).

        Shtauber argues that Rule 5.4(a) doesn’t apply to this situation at all, because the comments

to Rule 5.4 indicate that it only pertains to how law firms are organized when a nonlawyer exercises

managerial authority or has a financial stake. Because the Agreement does not give Shtauber any

managerial role or financial interest in Gerson’s firm, this rule is inapposite, he claims. He argues

that Rule 5.3 is applicable instead. Rule 5.3 describes “Responsibilities Regarding Nonlawyer

Assistants.” It requires both a partner in the employing firm, and the assistant’s direct supervisor,

to ensure that “the person’s conduct is compatible with the professional obligations of the lawyer,”

and specifies when a lawyer is liable for the assistant’s conduct. See Rule 5.3. Comment 1 to

Rule 5.3 makes clear that this Rule is designed to apply to persons such as “secretaries,

investigators, law student interns, and paraprofessionals.”

        Shtauber misreads both Rule 5.4 and Rule 5.3, however. Rule 5.4 is the pertinent one here,

and it forbids the fee sharing arrangement between Shtauber and Gerson. Rule 5.4 by its plain

language applies to “shar[ing] legal fees with a nonlawyer.” Although Comment 5 emphasizes

that nonlawyer assistants are governed by Rule 5.3, neither that comment nor the comments as a

whole indicate that Rule 5.4 only pertains to the organization of law firms. Rather, Rule 5.4(b)

governs the organization of firms where a nonlawyer has a financial interest or managerial

authority. Rule 5.4(a)(4) allows firms that meet the requirements of Rule 5.4(b) to be an exception

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to Rule 5.4(a)’s general prohibition on “shar[ing] legal fees with a nonlawyer.” Rule 5.4(a)’s clear

prohibition on fee sharing is not limited to fee sharing within firms, just because one of the

exceptions addresses that situation. Rule 5.3 covers a different situation entirely, and is not

relevant. There is no allegation that Shtauber was an assistant such as a paralegal or legal intern

who was employed and directly supervised by Gerson or any other attorney or law firm.

        Rule 5.4(a) clearly prohibits the fee sharing arrangement described here. The Agreement

between Shtauber and Gerson states that “Dr. Shtauber’s fees under this Agreement shall be 20%

of any and all contingent legal fees” due to the Gerson Group for claimants referred to them by

Mena. Agreement ¶ 4. In addition to this arrangement being forbidden by the plain language of

Rule 5.4(a), the D.C. Bar has issued an ethics opinion explicitly stating that “[a] payment by a

lawyer to another person for the referral of legal business, which is contingent on the lawyer’s

receipt of fees from the referred legal business and is tied to the amount of those fees” constitutes

fee sharing that is prohibited by Rule 5.4(a). See D.C. Legal Ethics Op. 286 (1998). This does

not describe the exact situation here: Shtauber is not being paid directly for referring clients, rather

he is being paid a contingent fee with respect to clients referred to Gerson by another attorney,

Mena. Nonetheless, Shtauber is being paid “for the referral of legal business” (through an

intermediary) that is “contingent on [Gerson’s] receipt of fees from the referred legal business and

is tied to the amount of those fees.” Thus the Agreement is likely covered by Ethics Opinion 286,

in addition to being forbidden by the plain language Rule 5.4(a).

        Shtauber argues that Ethics Opinion 286 is no longer applicable following the 2007

revision of the Rules. That’s not quite correct. Ethics Opinion 286 also discussed the version of

Rule 7.1(b)(5) in effect pre-2007, which permitted a lawyer to employ a nonlawyer to assist the

lawyer in soliciting new clients. Ethics Opinion 286 clarified that (under the pre-2007 Rules)

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payment of a non-contingent referral fee to a nonlawyer (i.e., a fee for each referral “regardless of

the success or outcome of the representation”) was permissible under 7.1(b)(5) as an exception to

5.4(a), but payment of a contingent fee (i.e., a fee dependent on whether the lawsuit is successful)

was not. Id.; see also D.C. Legal Ethics Op. 253 (1994) (discussing Rule 7.1(b)(5)). The 2007

revision of the Rules eliminated Rule 7.1(b)(5), and thus the portion of Ethics Opinion 286

discussing that provision is no longer applicable. See Ethics Opinions Substantively Affected by

the Amended Rules (Effective 2/1/2007), available at https://www.dcbar.org/bar-resources/legal-

ethics/opinion-table.cfm. However, Rule 5.4(a) was not substantively changed in ways relevant

here. There is no reason to believe, then, that Ethics Opinion 286’s conclusion that contingent fees

are governed by 5.4(a) is no longer valid even under the post-2007 Rules.

       Instead of relying on Ethics Opinion 286, Shtauber asks the Court to consider Ethics

Opinion 233. That opinion states that “[a] law firm may agree with its clients that, depending on

the outcome of a particular matter, a ‘success fee’ will be paid to both the law firm and a consulting

firm of nonlawyer experts retained by the law firm” without running afoul of Rule 5.4(a). D.C.

Legal Ethics Op. 233 (1993). However, that opinion emphasizes that this is analogous to Rule 3.4,

which “permits payment of contingent fees to expert witnesses so long as they are not based on a

percentage of the recovery.” Id. Here, the fee due to Shtauber under the Agreement is explicitly

based on a percentage of the Gerson Group’s recovery. Thus, even under Ethics Opinion 233,

Shtauber and Gerson’s fee arrangement is not permitted under Rule 5.4(a).

       Shtauber’s stronger argument, however, is that even though the agreement is contrary to

Rule 5.4(a), it is still enforceable. A contract that is contrary to public policy is generally

unenforceable. See Remsen Partners, Ltd. v. Stephen A. Goldberg Co., 755 A.2d 412, 414, 417

(D.C. 2000); CapitalKeys, LLC v. CIBER, Inc., 875 F. Supp. 2d 59, 63 (D.D.C. 2012) (applying

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D.C. law); see also W.R. Grace & Co. v. Local Union 759, Int’l Union of Rubber, Cork, Linoleum

& Plastic Workers of America, 461 U.S. 757, 766 (1983) (applying federal law to find that “[i]f

the contract interpreted by [the arbitrator] violates some explicit public policy, we are obliged to

refrain from enforcing it”).

        D.C. courts have not answered the question whether the D.C. Rules of Professional

Conduct are an expression of D.C. public policy thus rendering contrary contracts unenforceable.

Several states have reached that question, and have held that rules of professional conduct are

statements of public policy, and contrary contracts are generally unenforceable. See Gaddy Eng’g

Co. v. Bowles Rice McDavid Graff & Love, LLP, 746 S.E.2d 568, 580–81 (W.Va. 2013)

(Laughry, J., concurring) (noting that although the West Virginia court did not reach that question,

courts in the following states have so held: California, Texas, Michigan, Georgia, Illinois, and

Indiana; as well as the Sixth Circuit applying Kentucky law). Another federal district court, when

considering a different provision of the D.C. Rules of Professional Conduct, determined that D.C.

courts were likely to hold that the Rules were an expression of public policy and therefore contracts

that violate them are unenforceable. See Moskowitz v. Holman, No. 15-cv-336, 2016 WL 356035,

at * 15 (E.D. Va. Jan. 28, 2016).

        New York, on the other hand, takes a more case-specific approach.                 In Marin v.

Constitution Realty LLC, 984 N.Y.S.2d 632 (Table), 2014 WL 658253 (N.Y. Sup. Ct. 2014)

(unpublished), the court took a flexible approach, relying on New York precedent holding that “if

the statute does not provide expressly that its violation will deprive the parties of their right to sue

on the contract, and the denial of relief is wholly out of proportion to the requirements of public

policy or appropriate individual punishment, the right to recover will not be denied.” Id. at *13

(internal quotation marks omitted) (quoting Rosasco Creameries v. Cohen, 11 N.E.2d 908, 909

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(N.Y. 1937)). The court stated that “it ill becomes defendants, who are also bound by the Code of

Professional Responsibility, to seek to avoid on ‘ethical’ grounds the obligations of an agreement

to which they freely assented and from which they reaped the benefits.” Id. at *14 (quoting

Benjamin v. Koeppel, 650 N.E.2d 829, 832–33 (N.Y. 1995) (holding that a fee sharing

arrangement between attorneys was enforceable, even though one attorney failed to register with

the state as required)). The court then weighed the equities, and determined that justice required

that the contract be enforced. See id. at *15.

       The D.C. Court of Appeals considered a similar—but not identical—question in Landise

v. Mauro, 725 A.2d 445 (D.C. 1998). There, an attorney who was barred in Virginia and an

attorney who was barred in D.C. practiced together out of an office in D.C. Id. at 447. The Virginia

lawyer sued the D.C. lawyer claiming that they had a partnership agreement that the D.C. lawyer

had breached. Id. at 447–48. The D.C. lawyer argued that there was no partnership agreement,

and regardless, that it was unenforceable because the Virginia lawyer engaged in the unauthorized

practice of law by practicing in D.C. without being admitted there. Id. at 448–50.

       The Court of Appeals held that the partnership agreement (if there was one) was still

enforceable, even if the Virginia lawyer engaged in the unauthorized practice of law. Id. at 451.

The court noted that the agreement itself was not contrary to any Rules, explaining that “the fact

that [the Virginia attorney] was not admitted to the D.C. Bar did not in and of itself make her or

[the D.C. attorney] incapable of entering into partnership with each other under governing

principles of partnership law, or render their agreement to share fees unethical under our rules.”

Id. at 451. The court then considered the purpose of the prohibition on unauthorized practice of

law, and held that there was no public interest in that policy that would be advanced by not

enforcing the partnership agreement. Id. Further, echoing the language of the New York court in

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Marin, it explained that although some might “declare a ‘pox on both their houses’” because both

parties violated the ethical Rules, “to do so in this context would be overly simplistic as it would

bestow a windfall” on the defendant. Id. at 451–52.

        Based on the reasoning in Landise, this Court believes that if the D.C. Court of Appeals

were to consider this issue, it would follow New York’s flexible approach and hold that while the

Rules express D.C.’s public policy, a court must evaluate the particular circumstances to determine

whether the contract is unenforceable.      Here, “it would bestow a windfall” on Gerson to

categorically deny enforcement of the contract. See Landise, 725 A.2d at 451–52. Gerson was

well aware of the Rules when he entered into this contract—or he should have been, as an attorney

licensed in D.C. As in Marin and Benjamin, “it ill becomes [Gerson], who [is] also bound by the

Code of Professional Responsibility, to seek to avoid on ‘ethical’ grounds the obligations of an

agreement to which [he] freely assented and from which [he] reaped the benefits.” Marin, 2014
WL 658253, at *14; see Benjamin, 650 N.E.2d at 832–33. Shtauber, on the other hand, is not an

attorney and does not seek to benefit from a Rules violation. And although Shtauber had an

attorney when entering into the Agreement this does not (as Gerson argues) lead the Court to

“declare a ‘pox on both their houses.’” Landise, 725 A.2d at 452. In Landise, both parties were

attorneys who knew the Rules and were equally bound by them, and yet the court still looked at

the underlying public policy and whether nonenforcement of the contract would advance that

public policy, or merely result in a windfall for the defendant. It is true that in Landise the

agreement itself was not prohibited by the Rules, only the Virginia attorney’s practicing without a

license in D.C. was. But the agreement in Marin was prohibited by the applicable rules, and that

case demonstrates that the same logic is equally applicable here. Thus, the Court does not think

that this distinction is determinative.

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       D.C.’s treatment of other contracts that violate public policy lends some support to the

conclusion that this Agreement is enforceable. D.C. has a longstanding tradition of strictly

prohibiting home improvement contractors from performing work without a license, and holding

any such contract with an unlicensed contractor unenforceable. See, e.g., Remsen Partners, 755
A.2d at 418 & n.7–8 (“regulations absolutely prohibit contractors from requiring or accepting ‘any

payment for a home improvement contract in advance of full completion of all work required to

be performed under the contract, unless that person is licensed as a home improvement contractor’”

(quoting 16 DCMR 800.1 (1987)); Cevern, Inc. v. Ferbish, 666 A.2d 17, 22 (D.C. 1995)

(explaining policy). In fact, the D.C. Court of Appeals goes so far as to require an unlicensed

home improvement contractor to return any payments received. Remsen Partners, 755 A.3d at

418 (collecting cases). Yet that court has emphasized that while this particularly harsh rule is

appropriate in that industry, it has not been extended to most other areas governed by licensing

requirements. Id. at 418–19. The court in Remsen Partners—a case about fees for an unlicensed

real estate broker—explained that a court may “take into account, among other equitable

considerations, the sophistication or the vulnerability of the user of the service.” Id. at 420. It thus

held that an unlicensed real estate broker need not repay the fees that a client already paid. Id. at

421; see also Beard v. Goodyear Tire & Rubber Co., 587 A.2d 195, 202–05 (D.C. 1991) (declining

to order disgorgement of fees paid to merchant who had not properly registered).

       These cases describe scenarios quite different from the one here. Neither Shtauber nor

Gerson provided unlicensed services, and the question here is not one of repaying fees, but rather

of enforcing a contract. But these cases do indicate that in many settings, D.C. courts will take a

somewhat flexible approach to contracts that are contrary to public policy. This further indicates

that the D.C. Court of Appeals would likely follow Landise in evaluating Shtauber and Gerson’s

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contract with similar equitable flexibility. Thus, because at this stage of litigation we take the

plaintiff’s allegations as true and draw reasonable inferences in his favor, the Court will deny

Gerson’s motion to dismiss Count I. However, this equitable analysis is necessarily somewhat

fact-bound; as the facts develop further, the balance of equities could lead to a different conclusion.

          As for Count III, both parties agree that it is dependent on Count I. Because Count III

seeks a declaratory judgment enforcing the contract, and because the Court has found that the

contract is enforceable despite contradicting the D.C. Rules of Professional Conduct, the Court

will deny Gerson’s motion to dismiss Count III as well.

    II.      Count II

          Shtauber argues, in the alternative, that Gerson was unjustly enriched by receiving

Shtauber’s valuable services without paying for them, and he seeks to recover in quantum meruit.

Compl. ¶¶ 28–29. Shtauber asserts that the “reasonable value” of those services is $ 720,000, and

requests payment of that amount plus interest. Id. ¶¶ 29–30.

          In the District of Columbia, generally a party may not recover on a claim of unjust

enrichment or quantum meruit when there is a contract governing the conduct at issue. 2 Harrington
v. Trotman, 983 A.2d 342, 346–48 (D.C. 2009); Emerine v. Yancey, 680 A.2d 1380, 1384 (D.C.

1996). However, the D.C. Court of Appeals has “in certain instances where the parties had a

contract, allowed recovery under a theory of unjust enrichment or restitution when the claimant

suffered from the other party’s breach of the contract.” Harrington, 983 A.2d at 347–48 (emphasis

in original) (citing, among others, Lee v. Foote, 481 A.2d 484, 485 (D.C. 1984) (per curiam)

         2
           It is true, as Gerson argues, that recovery under a theory of unjust enrichment or quantum meruit “for
performance in return for a promise unenforceable on public policy grounds is forbidden” under D.C. law. Sturdza v.
United Arab Emirates, 11 A.3d 251, 257 & n.26 (D.C. 2011); Cevern, 666 A.2d at 22; CapitalKeys, 875 F. Supp. 2d
at 65. However, this is not relevant to Count II because—at this stage of the litigation—the Court has found that the
Agreement is enforceable. If the Court later determines that the Agreement is unenforceable because it is contrary to
public policy, then this line of cases may become relevant.

                                                         12
(“When an express contract has been repudiated or materially breached by the defendant,

restitution for the value of the non-breaching party's performance is available as an alternative to

an action for damages on the contract.”)). Because Shtauber has alleged that Gerson materially

breached the contract, at this stage he may seek damages for unjust enrichment as an alternative to

damages on the contract.

       Gerson also argues that Shtuaber does not plead Count II with sufficient particularity. He

characterizes Shtauber’s allegations as “mere speculation” which is “insufficient to satisfy Rule

12(b)(6).” Def.’s Mot. to Dismiss at 5 (citing Twombly, 550 U.S. at 555). The Court need not

spend much time dispensing with this argument. Shtauber alleges that he and Gerson entered into

an Agreement where Gerson would pay Shtauber for his services, including but not limited to

connecting Gerson with Mena, continuing to coordinate with Mena, and undertaking

“investigative/political/public affairs” activities. Compl. ¶¶ 10–11. Shtauber further alleges that

Gerson breached this agreement. Compl. ¶¶ 26–28. These are factual allegations, not “mere

conclusory statements” or “recitals of the elements of a cause of action.” Iqbal, 556 U.S. at 678.

There is nothing implausible about such a claim for breach of contract. See id.; cf. id. at 696

(Souter, J., dissenting) (implausible claims involve “little green men” or “time travel”). And

although Shtauber has not substantiated his assertion that the value of his services is $720,000, he

need not plead “detailed factual allegations” at this stage. See Twombly, 550 U.S. at 555.

Therefore, Gerson’s motion to dismiss Count II will be denied as well.

                                         CONCLUSION

       This case raises an open question of District of Columbia law. In light of existing D.C.

Court of Appeals precedent, this Court believes that although the Agreement violates the D.C.

Rules of Professional Conduct, it is nonetheless enforceable in this particular instance. Moreover,

                                                13
Shtauber may seek recovery in quantum meruit as an alternative to damages on the contract.

Therefore, Gerson’s motion to dismiss will be DENIED. A separate order will issue on this date.

                                                                            /s/
                                                                        JOHN D. BATES
                                                                   United States District Judge
Dated: March 10, 2017

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