A federal judge sided with Clare Locke in a fight over $7 million in legal fees that the law firm says it’s owed by a former client.
US District Court Judge Patricia Tolliver Giles on Tuesday upheld an arbitrator’s decision for the firm against Kytch Inc. The arbitrator ordered that funds from a potential multimillion-dollar settlement between McDonald’s Corp. and Kytch, which serviced McFlurry ice cream machines at McDonald’s restaurants, be frozen.
Giles said Kytch didn’t meet the high legal standard for overturning the decision.
Clare Locke handled a wide range of trade secrets and other litigation for Kytch, including a $900 million suit against McDonald’s Corp. The company ditched the firm after four Clare Locke lawyers left in August 2023 to start their own litigation shop.
Clare Locke’s leaders have accused their former colleagues of spinning off the new firm—Meier Watkins Phillips Pusch—to pocket millions of dollars in potential fees in the McDonald’s and other Kytch litigation. Clare Locke sued Kytch April 4, asking the court to confirm the arbitrator’s decision.
Giles said district court judges have limited ability to reject arbitration awards like the one at issue in the case, except in the “narrowest” of circumstances.
The ruling keeps the arbitrator’s decision in place while Clare Locke and Kytch continue to fight over legal fees and costs related to the firm’s work for the company. Clare Locke said in a court filing that its lawyers devoted “more than 10,000 hours” and “countless long days and late nights” to Kytch for the McDonald’s case and other matters.
Daniel Watkins of Meier Watkins, one of the former Clare Locke lawyers, represented Kytch in the Tuesday hearing in the US District Court for the Eastern District of Virginia.
He accused his ex-firm of using the dispute to publicize “confidential information” about Kytch, though he declined to go into additional detail. Watkins also said that Clare Locke may have violated a legal ethics rule that forbids attorneys from revealing information relating to a client without that client’s informed consent.
Clare Locke was represented at the hearing by Williams & Connolly partners Bryan Wilson and Bill Burke. The lawyers for both sides declined to comment following the hearing.
The case is Clare Locke v. Kytch, 24-cv-00545 (E.D. Va., 4/4/24), order 5/14/2024.
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