Thompson Hine has filed a $480,000 lawsuit against a Florida-based electronic cigarette company and its president, alleging that they failed to pay for work the firm performed on a suit against the Food and Drug Administration. The firm’s complaint also alleges that Elicko Taieb, the majority owner and president of Smoking Everywhere Inc., misappropriated funds from his company for personal use without first paying the firm for its legal work.
Thompson Hine’s complaint, filed on Nov. 3 in the U.S. District Court for the District of Columbia, contends that Taieb hired the firm on March 19, 2009, to advise the company on the sale and distribution of its electronic cigarettes. According to a March 17 engagement letter, Taieb agreed to pay Walt Linscott, an Atlanta-based Thompson Hine partner, $605 per hour and to pay a retainer of $7,500. The engagement letter also says that rates for other Thompson Hine lawyers and legal assistants would range from $185 to $650 per hour.
On April 28, 2009, the complaint says, Thompson Hine filed suit in Washington against the FDA on behalf of Smoking Everywhere, seeking an injunction that would bar the agency from halting the importation of electronic cigarettes into the United State. The firm ultimately won a preliminary injunction against the FDA.
The next month, Smoking Everywhere stopped making payments to Thompson Hine, eventually racking up $375,250 in unpaid fees, the firm alleges in the complaint. The complaint was filed by Thomas Feher, a Cleveland-based Thompson Hine partner.
Meanwhile, Taieb entered into a second retainer agreement with the firm to have Thompson Hine represent him and his company in an action brought by the attorney general of Oregon alleging that Taieb and his company violated Oregon’s Unlawful Trade Practices Act.
Taieb and Ray Story, vice president of Smoking Everywhere, signed a second engagement letter for the Oregon matter, in which they agreed to pay Kip Schwartz, a Washington-based Thompson Hine partner, $545 per hour and Dennis Southard and Eric Heyer $420 and $300 per hour, respectively. Southard is of counsel to the firm and Heyer is an associate. Taieb and Story also agreed to pay a second retainer of $10,000.
The complaint says Thompson Hine was able to have Taieb dismissed from that lawsuit and to have portions of the complaint against Smoking Everywhere dismissed.
The complaint contends that Taieb failed to pay $105,494 in fees related to the Oregon matter.
In addition to alleging that Taieb has failed to pay for the fees the firm says it owes, the complaint says that he “misappropriate[ed] substantially all of the revenues and assets of SE to his personal use in violation of his duties to the company and for purposes of defrauding creditors.” The complaint alleges one count of breach of contract against Taieb and another for breach of contract against Smoking Everywhere. The complaint also alleges three counts of fraudulent transfer.
According to court records, Taieb has not yet responded to the firm’s complaint and no attorney has entered an appearance on his behalf to date. Taieb could not be reached for comment. Judge Rosemary Collyer is presiding over the case.