Headache for Ameriprise

For nearly a decade, Jon E. Drucker has been a thorn in the side of Ameriprise Financial Inc. The 53-year-old lawyer, who works out of a garage, converted into an office, at his home in Los Angeles, has made a decent living representing advisers and individual investors in lawsuits against Ameriprise, formerly known as American Express Financial Advisors Inc. What's more, Mr. Drucker, who recently negotiated a $100 million settlement with Ameriprise, firmly believes that his biggest case against the Minneapolis-based firm is yet to come. "A lot of lawyers look at only the money, but he's looking at making a wrong [into a] right, and I think that's why he's successful," said John Haritos, a Phoenix-based technology products salesman who started websites deriding American Express and Ameriprise, after, he says, an American Express adviser put him into a handful of unsuitable products that lost money. New York-based American Ex-press Co. spun off American Express Financial Corp. in 2005 and the unit was renamed Ameri-prise Financial Inc. In 2002, Mr. Haritos enlisted Mr. Drucker and filed a class action against American Express. In that suit, he alleged his American Ex-press adviser never informed him of the incentives the adviser received for recommending proprietary products.

A BIG WIN

That suit was settled in 2005 for $100 million. The legal fees for that settlement totaled $27 million. Mr. Drucker did not divulge how much he pocketed but did say that a portion of those fees were divvied up among other lawyers who worked on the case. "He's willing to roll up his sleeves, and that's something that somebody from a larger firm probably wouldn't be willing to do," Mr. Haritos said. "[They] probably figured he's some low-end attorney, but it didn't work out that way." In all, Mr. Drucker has represented 10 named plaintiffs in five class actions against American Express and Ameriprise. All five of the suits were settled out of court. Predictably, Ameriprise takes a dimmer view of Mr. Drucker. "A lawyer making a career filing frivolous class-action lawsuits doesn't merit a comment from us," said Ben Pratt, a spokesman for the Minneapolis-based company. Judy Tenzer, a spokeswoman for American Express, declined to comment. Mr. Drucker's dealings with American Express began in 1998 when he had lunch with his financial adviser, who also happened to be a friend from graduate school. When that adviser, Lawrence Weinman, began expressing concerns that American Express had been deducting overhead expenses from his compensation, Mr. Druck-er's ears perked up. "I said, 'It sounds illegal under California law,' " Mr. Drucker recalled. Mr. Weinman asked Mr. Drucker to represent him in a case against American Express, which eventually resulted in a seven-figure settlement. In his no-holds-barred style, Mr. Drucker recounts how he once tried, unsuccessfully, to get then-New York Attorney General Eliot L. Spitzer to look into American Ex-press' dealings. Last Monday, amid revelations of his involvement with a prostitution ring, Mr. Spitzer stepped down as the state's governor. "If he'd paid more attention to what American Express was doing to its clients and not doing the same thing with the hooker, he might still be governor of New York," he said. Currently, Mr. Drucker is putting the finishing touches on a screenplay that he said involves "international terrorism with a legal twist." He hopes to see it get produced, "like everyone else in L.A.," he said. Mr. Drucker doesn't offer a secret for his legal success other than to pursue "good cases" doggedly. "When you've got a good case, you've got a good case," he said. But he also knows that Ameri-prise and American Express are tough adversaries. "They fiercely litigate all the cases," he said. "If there's a motion to be filed, they file it." Still, the sole proprietor has an ally in the form of technology. "The Internet has leveled the playing field for a guy like me, so I can take on a Fortune 500 company," he said. The son of a Defense Department accountant, Mr. Drucker also has been an entrepreneur. In 1981, he started a contracting business for the installation of solar panels. The business grew to 35 employees, and he sold it in 1986. "I was young and idealistic, and I got into it for idealistic reasons," he said. Later, after graduating from law school at the University of California, Los Angeles, in 1988, he was with a small law firm for two years before moving on to a larger one. In 1997, he joined a software company. But that job, which re-quired him to work no more than 20 hours a week, allowed him time to pursue his own legal cases. It was during this period that he and Mr. Weinman sat down at a sandwich shop for a $15 lunch. Each credits the other for picking up the tab. Mr. Drucker is a rare bird in his profession, according to David Austin, a Phoenix, Md.-based plaintiff in Haritos v. American Express. "I have a tough time saying 'gentleman' and 'attorney' in the same sentence, but he's that and then some," said Mr. Austin, who is a computer graphics artist. The lawsuit that Mr. Drucker filed in January in Minnesota's Hennepin County against American Express and Ameriprise alleges that the franchisers breached the franchise agreement by taking away the American Express Financial Advisors brand name. Ameriprise says the suit is without merit. E-mail Brooke Southall at bsouthall@investmentnews.com.