Duane Morris Mostly Fails to Trim Non-Equity Partner Class Suit

A Duane Morris LLP attorney advanced breach-of-contract, fraud, and other claims in her class action alleging the firm misclassifies some lawyers as non-equity partners to reduce its business and tax expenses.

The firm’s 13 arguments for partial dismissal of the July 2023 lawsuit mostly fell short, the US District Court for the Southern District of California ruled Aug. 1. Meagan Garland must try again with her declaratory judgment and failure-to-make-required-withholdings claims. Her claim for restitution was dismissed with prejudice because it duplicated her unjust enrichment claim.

Garland’s suit is one of several cases, including three this year, scrutinizing the increasingly popular non-equity classification at law firms.

Duane Morris must continue to face Garland’s claim that it breached her contract by making unlawful deductions from her wages after she switched from special counsel to non-equity-partner status, Judge Cathy Ann Bencivengo said. The firm wasn’t entitled to dismissal on the ground that Garland allegedly knew about the deductions and continued to work under the contract, because California state courts don’t consider compliance with an agreement and knowledge to be dispositive in unlawful deductions cases, Bencivengo said.

Garland’s claims for breach-of-contract, restitution of unlawful wages under California’s Business and Professions Code, fraud, conspiracy-to-commit-fraud, unjust enrichment, and quantum meruit aren’t barred by the state Labor Code, at least not yet, the judge said. The Labor Code may provide the exclusive remedy if Garland has an adequate remedy at law on those other claims, but her suit alleges she doesn’t and she can plead in the alternative, Bencivengo said.

Dismissal of Garland’s fraud and negligent misrepresentation claims for failure to plead reasonable reliance on Duane Morris’ alleged representations was premature because whether her status as an employment lawyer meant she couldn’t have done so is a question of fact for later in the case, the court said.

Garland adequately alleged that Duane Morris and affiliate Tax Accounting Group owed her a fiduciary duty by offering and providing her with tax advice, Bencivengo said in declining to dismiss the suit’s breach-of-fiduciary-duty claim. A scheme to defraud non-equity partners was also sufficiently asserted, the judge said in denying dismissal of a related professional negligence claim.

Because Garland asserted that she doesn’t know the exact amounts owed to her, she can pursue her claim for an accounting as well, the court said.

Garland, who is a Black woman, is also suing on behalf of herself and other attorneys for alleged unequal pay based on race and sex.

Fell Law PC represents Garland and the proposed classes. Proskauer Rose LLP represents Duane Morris.

The case is Garland v. Duane Morris LLP, 2025 BL 271716, S.D. Cal., No. 3:24-cv-01783, 8/1/25.