Billing for Briefs: Nacchio Sues Law Firm Over “Excessive” Fees and “Negligent” Defense

Former Qwest Communications CEO Joseph Nacchio is suing Herbert Stern and his New Jersey law firm, Stern & Kilcullen LLC for overbilling and a “negligent” defense. Stern’s partner, Kevin Kilcullen, also was named as a defendant. Nacchio includes the allegations that the lawyers charged him for underwear. Please tell me this is a misunderstanding over the meaning of the term “briefs.”

Stern is a former federal judge of the United States District Court for the District of New Jersey.

If you recall, Nacchio, 62, was convicted of insider trading and given a 70-month prison sentence in 2007 for illegally selling $52 million of stock in Denver-based Qwest in 2001 based on inside information. His sentence was later reduced by a couple of months due to a calculation error. He was also fined $19 million and agreed to forfeit $44.6 million.

The firm billed him more than $25 million to defend against both civil and criminal charges. He alleges that they included charges for staff breakfasts, attorney underwear, and in-room movies during the trial in federal court in Denver. Worse yet, he claims that the firm was “negligent and careless in handling the defense of the criminal action.” according to the complaint,” including such procedural errors as failing to properly call for the appearance of an expert witness (leading to their inability to call the expert testimony of securities law expert — and former University of Chicago dean — Daniel Fischel.

He is seeking both compensatory and punitive damages as well as attorney’s fees.

Nacchio is still in prison serving his sentence. He will have a difficult time in such actions. Notably, he has withdrawn his appeal of his sentence, which is uncommon when you are alleging inadequate counsel and challenging the decision to exclude Fischel. There was a danger that, if the appellate ruled on such issues, it could drive a stake in the heart of the civil lawsuit. For example, the court would likely have ruled that, even if there were an error in exclusion, it was harmless error.

In 2005, Joseph Tacopina and his firm was sued for malpractice in New Jersey for alleged negligence in a criminal case. Alveras v. Tacopina, 399 F. Supp. 2d 567 (D., N.J. 2005). The court barred the action because it was based on the same claims addressed in his appeal:

While the New Jersey Supreme Court has not specifically addressed the issue, this Court is persuaded by the majority of courts which have rejected civil claims for criminal malpractice when claims for ineffective assistance of counsel have been adjudicated, decided and rejected in the underlying criminal proceeding. Here, Alevras petitioned a judge for a reduction in his sentence based on numerous allegations or ineffective assistance of counsel and other allegations that his attorneys had mislead him in accepting his guilty plea. That petition was denied. Alevras has now raised the same set of allegations in asserting his civil claim for legal malpractice.

The standards for such an appeal and the standard for malpractice are linked on some level. As a general matter, legal malpractice requires the former client to show that the attorney’s neglect was the proximate cause of the loss to the client. That can be difficult in a criminal case where he was found guilty based on the totality of the evidence. Many courts require that a criminal sentence be set aside before a viable malpractice claim in a criminal case can be made. I believe that includes New York but I do not believe that there is such a requirement in New Jersey. Nevertheless, courts clearly look for such an overturning of the original sentence for a strong case to be made.

As for the briefs, it is not clear who billed for the garments. However, it is a bad sign when your lawyer tells you in the middle of a trial that he needs a change in underwear. This level of scrutiny over a lawyer’s brief has not occurred since Covington & Burling partner David Remes dropped his pants in front of an entire audience in 2008.

The case is Nacchio v. Stern & Kilcullen, Superior Court of New Jersey (Newark).

Source: Bloomberg

Jonathan Turley

12 thoughts on “Billing for Briefs: Nacchio Sues Law Firm Over “Excessive” Fees and “Negligent” Defense

  1. My understanding is that Nacchio had totally exculpatory evidence that was never presented to the jury. — That if he hadn’t sold his options when he did, they would soon have expired and been totally worthless.It is possible that his first lawyers deliberately withheld this evidence. There was some BS related to when they entered the witness name.

    It seems to me that his first lawyers got more money because Nacchio was found guilty. Didn’t they bill big for appeal and post conviction services?

    What seems consistent with public information is that Nacchio’s judge, Edward Nottingham, was known to DOJ as receiving attorney subsidies for his “consumption” and that DOJ made a deal to cover that up in exchange for a Nacchio conviction. DOJ had a political motive to prosecute Nacchio because he was the ONLY telecomm exec who resisted warrantless searches.

  2. Ms. Silverking,

    Are you suggesting that this man was framed. It could not be. Only the guilty ones are locked up. All of this self professed innocence. Yes, sure, right. I just love it.

  3. I think Nacchio has a right for recognition of exculpatory evidence related to the options and the procedural due process he received including conflicts of the judge and hidden agendas at DOJ.

  4. One would expect that a defendant of Macchio’s seeming stature would have been intimately involved in his defense and in the process ensure that his side was well presented. If he wasn’t he was a fool and if he was given the amount of restitution he paid, or is paying, it would seem he wants to lower his own expenses.

  5. rafflaw,

    “Those were some expensive “briefs”! Or were they boxers?”

    Don’t mean to confuse the issue but they could possibly have been boxer/briefs :D

  6. You have to have some outlet for your anger when you are looking at four walls all day. I am sure he is totally angry that his team wasn’t able to make responsibility go away totally.

  7. “…staff breakfasts, attorney underwear, and in-room movies …”
    ——————————-
    nasty nasty , somebody had a party at their clients expense…not funny!…not nice!…

  8. What makes you think that Nacchio would know that his expert witness had to be entered on the list by a certain time?

    I don’t even see why he would need an expert witness to tell the jury when his stock options would expire.

    Don’t act like you have never heard of a lawyer selling out his client.

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