Jury Awards More Than $10M in Water Bottlers’ Lawsuit

March 24, 2006

A Portland, Maine jury ordered a Seattle law firm to pay $10.8 million for dumping one set of clients for a more lucrative class-action case. Jurors will return to federal court next week to settle the issue of punitive damages.

The jury unanimously found Wednesday that lawyers from Hagens Berman Sobol Shapiro LLP violated their duty of loyalty to three small water bottlers that in 2003 were close to settling a claim with Nestle Waters North America, the owner of Poland Spring Water Co.

Maine companies Glenwood Farms Inc. and Carrabassett Spring Water, along with Tear of the Clouds LLC in New York, said Hagens Berman was assisting them in their case against Poland Spring over its labeling, but defected at the last minute and filed class-action claims in five states, causing Nestle Waters to withdraw its offer.

Glenwood Farms and Carrabassett Spring were each awarded $3.9 million by the jury. Tear of the Clouds, which is co-owned by Robert F. Kennedy Jr. and sells bottled water to raise money to protect public water sources, was awarded $3 million.

“This was not a case of the attorneys taking care of consumers. This was a case of the attorneys grabbing everything they could for themselves,” Kennedy told the Portland Press Herald in a telephone interview from New York.

The award in U.S. District Court is thought to be one of the largest ever granted in a Maine court and could get larger. Judge George Singal told jurors to return next Thursday for a two-day trial on punitive damages.

“I think this jury sent a message that in a situation where lawyers represent multiple clients, they can’t play one off the other,” said Lee Bals, attorney for Tear of the Clouds.

The 21/2-week trial focused on legal ethics and raised questions on whether lawyers can create theoretical classes of consumers and make legal decisions on their behalf _ such as whether to settle a case and for how much – without consulting anyone.

William Robitzek, the lawyer who represented Glenwood Farms and Carrabassett Spring, told jurors that greed drove Hagens Berman to abandon his clients and violate legal ethics.

The small water bottlers hired Jan Schlichtmann, the lawyer portrayed by John Travolta in the 1999 film “A Civil Action,” in 2002 to take on Nestle over Poland Spring’s labels. They contended the “natural spring water” labels were misleading because the water is pumped from wells, not springs.

Schlichtmann brought in Hagens Berman to assist because of the complexity of the case.

Robitzek said the plaintiffs hoped to avoid a lawsuit and negotiate a deal that would get Poland Spring to correct the situation without a public disclosure that would damage the entire Maine bottled water industry. But instead, he said, Hagens Berman pulled out and filed class-action suits.

The breakup of the deal cost the companies millions of dollars, they said.

Schlichtmann said Wednesday that the law firm was being greedy, and that he felt vindicated by the verdict even though he is no longer part of the case.

“They trashed me and they trashed the clients, but the jury saw it right,” he said. “It was all a bunch of lies. They had no right to sabotage us.”

Hagens Berman argued that it was the bottlers who were greedy and were willing to sell out consumers to grab a quick payday.

Peter DeTroy, the lawyer for Hagens Berman, wouldn’t discuss his options, but noted that the trial is still not over.

“Obviously, we’re disappointed but we don’t think this is the last word,” he said.

Regardless of whether punitive damages are awarded, the outcome could change the way lawyers operate in these cases, said Chuck Harvey, former chairman of the Maine Board of Bar Overseer’s Grievance Commission, which hears public complaints about lawyers.

Harvey said it is “very rare” for legal malpractice cases to go back to juries for punitive damages, because most cases involve claims of simple negligence and ordinary damages.

“This will send the message to the plaintiff’s bar that they have to be very careful,” he said.

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