Risk Update

Conflicts and Ethics — Judicial Disqualification Clarification, Arbitrator Conflicts Concern, Private Credit Conflicts Allegation, DOJ Crypto Conflict

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NYSB: “Opinion 25-124(B)” —

  • Facts/Issue: A new full-time judge asks about disqualification based on his/her prior employment as a sole practitioner. The judge represented defendants in a wide variety of criminal cases in courts throughout the county, including the court where the judge now presides. The judge asks for clarification about instances where the judge served as assigned counsel.”
  • Discussion: As always, a judge is permanently disqualified, without the possibility of remittal, in any case where the judge previously participated as an attorney.”
  • “In other matters involving former clients, a judge is disqualified, subject to remittal, for two years. The two-year period runs from the time the attorney-client relationship completely ends, including any extension due to ongoing connections with the client such as unpaid legal fees. It is understood that, as assigned counsel, the judge was or will be compensated by the designated governmental department(s) at legally specified rates based on vouchers submitted. Accordingly, where the judge served as assigned counsel, the two-year period runs specifically from the end of the attorney-client relationship, just as it does for a judge who served as an assistant public defender.”
  • Conclusion: Where a judge previously served as assigned counsel, the two-year disqualification period for former clients runs from the end of the attorney-client relationship.”
  • Authorities: Opinions 24-168; 21-151.”

“‘Ill-Advised and Questionable’: Judge Leaves Arbitration Award in Place, Despite Allegations Over Neutral Umpire” —

  • “A Manhattan judge has declined to set aside an arbitration award despite questionable behavior by one of the arbitrators in the case, finding respondents failed to meet the high bar required to prove their rights were prejudiced by his actions.”
  • “Manhattan Supreme Court Justice Nicholas Moyne found that, while a representation by neutral umpire Eli Mattioli ‘was at best misleading if not outright false,’ he could not disturb a unanimous final award to which respondents own party-arbitrator had agreed.”
  • “That ruling, which concerns a long-term ground lease for Carnegie House on West 57th in Midtown Manhattan, allowed a 450 percent rent hike to take effect. The historic coop property was considered one of the last affordable buildings on what’s now dubbed ‘Billionaires Row.'”
  • “The building’s tenants sought to vacate the decision from the tripartite arbitration panel last year, alleging party misconduct and arbitrator impartiality, and sought a preliminary inject to prevent the rent reset from taking place.”
  • “Their counsel alleges that Mattioli, while acting as a neutral umpire in the matter, accepted a paid, unrelated engagement from the landlord’s lawyer and then made an incomplete and misleading disclosure about the offer.”
  • “When the tenants requested Mattioli recuse himself, they allege he instead suggested a ‘quid pro quo’ in which he would not accept the other job if they withdrew their recusal motion.”
  • “‘While the conduct surrounding the neutral umpire’s acceptance and later refusal of an unrelated engagement offered by Landlord’s counsel created an appearance of impropriety, this conduct, when assessed against the stringent standards of CPLR Article 75, does not constitute the corruption, fraud, misconduct, or partiality necessary to justify the extreme remedy of vacating a final arbitral award,’ Moyne wrote.”
  • “Morrison Cohen partner and retired judge David Saxe, who represents the tenants, called Moyne’s decision ‘misguided.'”
  • “‘In our mind, once the developer’s counsel reached out to the arbitrator and offered him a job while our arbitration was pending, it was very problematic,’ said Saxe, who previously served as an Associate Justice at the Appellate Division, First Department. ‘The arbitrator’s decision to try and accept that additional retention really created the appearance of ethical impropriety.'”
  • “Mattioli was appointed as neutral arbitrator, or umpire, in the matter in February 2025.”
  • “Court records show he was then approached by Nixon Peabody partner Thomas Mealiffe, who serves as primary counsel for the landlord, 57th & 6th Ground LLC, to serve in an unrelated appraisal proceeding identified in filings as the ‘Durst engagement.’ Mealiffe did so, the judge wrote, without notifying counsel he was offering Mattioli a paid job or that he was communicating with Mattioli on the side.”
  • “‘By itself, this action posed a significant ethical risk that the integrity of the arbitration could be called into question,’ Moyne wrote in his ruling. ‘This is particularly true given that the parties previously agreed that ex parte communications with the Umpire were prohibited.'”
  • “In a subsequent disclosure to the parties that Moyne called ‘demonstrably imperfect,’ Mattioli told the parties he’d been ‘invited’ to serve on the unrelated proceeding but did not say he’d been approached by Mealiffe. ‘In fact, he claimed that he had not had any ex parte communications with Mr. Mealiffe, a claim that was at best misleading if not outright false,’ the judge said.”
  • “Saxe described the umpire’s email to parties as that of someone ‘trying to ‘kosherize’ the situation.'”
  • “‘He was in fact trying to give the impression that this was all above board to get the referral for other business,’ the attorney added.”
    When the tenants sought his recusal, Saxe said Mattioli did every ‘everything in his power to disadvantage the coop,’ including expediting hearings and issuing a final award before the proceeding concluded.”
  • “Though a severe appearance of partiality existed in this matter, Moyne wrote, the tenants failed to show objective facts linking any impartiality to the final award.”
  • “‘While the Umpire’s initial attempt to bargain with the Tenant was ill-advised and questionable, particularly since it came at the suggestion of the Landlord’s counsel, the record does not establish that the conflict resulted in financial motivations or actual prejudice affecting the final valuation, particularly given the unanimous nature of the award,’ Moyne said.”

Complaint Accuses Trump’s Criminal Attorney of ‘Blatant’ Crypto Conflict in His Role at DOJ” —

  • “An ethics watchdog group filed a complaint Thursday seeking an investigation into whether President Donald Trump’s criminal defense attorney — now the No. 2 at the Justice Department — broke federal conflict-of-interest law when he issued a new prosecution policy that benefits the cryptocurrency industry.”
  • “The complaint comes after a ProPublica investigation revealed last month that Todd Blanche owned at least $159,000 worth of crypto-related assets when he ordered an end to investigations into crypto companies, dealers and exchanges launched during President Joe Biden’s term. Blanche, the deputy attorney general, issued the order in an April memo in which he also eliminated an enforcement team dedicated to looking for crypto-related fraud and money-laundering schemes.”
  • “Blanche had previously signed an ethics agreement promising to dump his cryptocurrency within 90 days of his confirmation and not to participate in any matter that could have a ‘direct and predictable effect on my financial interests in the virtual currency’ until his bitcoin and other crypto-related products were sold.”
  • “Later ethics filings show Blanche divested from the investments more than a month after he issued the memo. Even when he did ultimately get rid of his crypto interests, his ethics records show he did so by transferring them to his adult children and a grandchild, a move ethics experts said is technically legal but at odds with the spirit and intent of the law.”
  • “In its complaint this week, the Campaign Legal Center asked the Justice Department’s acting inspector general to launch an investigation. The complaint alleged that the evidence suggests that Blanche ‘blatantly and improperly influenced DOJ’s digital asset prosecution guidelines while standing to financially benefit.'”
  • “The Campaign Legal Center is a nonpartisan government watchdog group dedicated to addressing challenges facing democracy in the U.S. Its trustees and staff include Democrats and Republicans, including Trevor Potter, a Republican former chair of the Federal Election Commission, who serves as president of its Board of Trustees.”
  • “Under the federal conflicts-of-interest statute, government officials are forbidden from taking part in a ‘particular matter’ that can financially benefit them or their immediate family unless they have a special waiver from the government. The penalties range from up to one year in jail or a civil fine of up to $50,000 all the way to as much as five years in prison if someone willfully violates the law.”
  • “In the complaint, Payne alleged that Blanche’s orders violated the law because they benefited the industry broadly, including his own investments. He estimated that Blanche’s bitcoin alone rose by 34%, to $105,881.53, between when he issued the memo and when he divested. At the time he issued the memo, Blanche also held investments in several other cryptocurrencies, including Solana and Ethereum, and stock holdings in Coinbase.”

Private Credit Deal Gone Bad Spawns Court Fight Over Conflicts” —

  • “Planet Networks Inc. thought it had landed a $50 million private credit deal to finance the fiber internet company’s expensive push into New York’s Hudson Valley. Instead, its founder now says a private equity firm dangled the loan to access his trade secrets while its own competing startup tried to swoop into the region.”
  • “The financing gone bad with Wafra Inc.-backed private equity manager Post Road Group has landed in New York state court, with a lawsuit filed earlier this month by Planet.”
  • “The fiber internet company accused the Connecticut-based manager and its co-founder Michael Bogdan of misrepresenting their involvement in Post Road portfolio company Archtop Fiber, founded only months prior, and using the pretext of an investment in Planet to steal competitive information and stall its growth plans.”
  • “‘PRG never intended to enter into a deal with Planet, and it never did,’ the company and its founder Robert Boyle said in the lawsuit.”
  • “Private credit has boomed into a $1.7 trillion industry in part on the pitch to borrowers that expert specialty firms understand their businesses and can reduce the hurdles to completing loans. But as more private equity investors with their own portfolio companies have also become lenders, the potential for conflicts of interest has also grown.”
  • “‘We believe the lawsuit is meritless and plaintiffs’ claims are completely baseless,’ Jeff Kramer, an attorney for the defendants, said in a statement. ‘We intend to defend ourselves vigorously in this case.'”
  • “Planet says Post Road provided a $12 million bridge loan in January 2023 and committed to $50 million in long-term debt that would be hammered out in a 90-day window. The package was more attractive to Planet than competing equity investments because it would allow the 30-year-old company to grow and its founder to retain control.”
  • “According to the lawsuit, Post Road slow-rolled its potential investment in Planet and used ‘bait-and-switch tactics’ to steal its trade secrets, including sensitive information related to permitting maps, technologies, business opportunities and vendor relationships. That helped Archtop, created and controlled by Bogdan, expand into the Hudson Valley, Planet alleges.”
  • “While Planet acknowledges that it knew Post Road had committed hundreds of millions of dollars to Archtop, the private equity firm represented itself as a ‘mere passive’ investor in the competitor, according to the complaint. Planet said it relied on Post Road’s assurances that it could manage any conflicts of interest.”
  • “‘PRG sought to entice Planet with the allure and facade of funding and a beneficial relationship while actually intending to bully Planet into ceding its New York operations to Archtop, misappropriate Planet’s confidential information for Archtop, and bleed it dry while it was reliant on PRG for cash,’ the company said in the lawsuit.”
  • “Now, the type of financing that pitches privacy as a virtue is spilling out in court in what amounts to a rare public rebuke within the close-knit world of digital infrastructure investing.”
Risk Update

Court Conflicts — Clerk Called Out on Courting Relationship Conflict, Judicial Trust Causes Recusal Consideration, Ethics Opinion on Former DA Now Judge, Another Suit in Judicial Romance Matter

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Zachary Zayas, former law clerk in alleged conflict of interest in LI inheritance dispute, working for Nassau law firm” —

  • “A law clerk whose relationship with a Uniondale attorney prompted conflict of interest allegations during a contentious inheritance dispute between two siblings has left his position with Queens Surrogate’s Court Judge Peter Kelly to work at an influential Nassau law firm.”
  • “The Uniondale firm of Ruskin Moscou Faltischek P.C. announced earlier this month that Zachary Zayas, of Massapequa, was now an associate in their trusts and estates department.”
  • “The move came less than a month after Newsday reported that Kelly had failed to disclose for several months that Zayas, his principal law clerk and the son of Joseph Zayas, the state court system’s chief administrative judge, was living with attorney Cheryl Katz as she was arguing cases in his courtroom.”
  • “Those cases included an inheritance dispute between Shannon Hynes, a Franklin Square-based matrimonial attorney and her brother Sean Hynes, a Bellerose-based NYPD detective.”
  • “In early 2023, a Kelly ruling made Sean Hynes the sole executor of his father’s roughly $2.1 million estate. The ruling also gave Sean Hynes the authority to use money from the estate to pay his attorneys, including Katz. Court records show Sean Hynes paid nearly $423,000 to three law firms where Katz worked between 2020 and 2024.”
  • “In its Jan. 6 announcement, Ruskin Moscou Faltischek said Zayas’ practice at the Uniondale firm would focuses on estate, trust and fiduciary litigation, including Surrogate’s Court matters.”
  • “In an interview Tuesday, Shannon Hynes described Zayas’ exit from Kelly’s courtroom as ‘a step in the right direction toward promoting confidence in the justice system,’ but added that she was ‘unsure if my case affected his employment.'”
  • “The investigator discovered Zayas and Katz were in a romantic relationship and sharing a home together in Massapequa. At the time, neither Zayas, Katz nor Kelly had disclosed the relationship to Shannon Hynes or her attorneys.”
  • “But after Shannon Hynes’ attorneys brought the relationship to the court, Kelly disclosed that he’d been aware the two were living together since late 2023, court transcripts show. “
  • “In a sworn affidavit, Katz said the relationship was disclosed to Kelly shortly after it began in June 2023.”
  • “Shannon Hynes said Zayas was in court for most conferences and appearances in the case.”
  • “In May 2024, with most of the major issues already resolved, Kelly recused himself from the case, framing the decision as ‘discretionary’ and adding that Zayas had no decision-making authority or influence over the outcome of the case.”
  • “In 2024, Shannon Hynes said she filed a complaint against Kelly with the state Commission on Judicial Conduct, which investigates allegations of wrongdoing by the judiciary.”
  • “Commission officials have declined to comment while Kelly told Newsday that he ‘acted properly and in compliance with all governing rules and statutes.'”

David Kluft asks: “Should the Judge recuse herself when she no longer trusts the lawyers?” —

  • “In an ugly spat between a hospital and a former hospital executive, the hospital’s lawyers accused the executive’s lawyers of trying to extort the hospital, and the executive’s lawyer’s clapped back by filing defamation claims, making themselves parties.”
  • “In September, the hospital’s lawyers informed the executive’s lawyers that their filings contained false citations (probably fabricated by #AI). Voluminous motion practice followed in which the executive’s lawyers ‘never addressed’ the false citations and doubled down with more.”
  • “After months of this, in early January the Magistrate judge issued a show cause order, noting that even though the false citations were discovered months earlier, the executive’s lawyers ‘were still obligated to acknowledge their transgressions to the court,’ and their ‘lack of accountability def[ies] explanation.'”
  • “The judge further announced that because this episode had resulted in her ‘completely losing trust’ in the executive’s lawyers, and because the court was going to report those lawyers to disciplinary authorities regardless of the outcome of the show cause hearing, she was going to recuse herself as soon as the show cause proceedings were over.”
  • Decision: here.

Judicial Ethics Opinion 25-124(A)” —

  • “Facts/Issue: The inquiring judge has been subpoenaed for a deposition in civil litigation, concerning a matter the judge previously handled as an assistant district attorney. The plaintiff is suing the police department that arrested him/her, claiming that the police engaged in improper actions that led to his/her conviction. There are no claims against the District Attorney’s office, and the judge is involved only as a witness or potential witness, not a party. As the testimony involves his/her former official duties as an assistant district attorney, the judge is represented by an assistant county attorney in the civil litigation. The judge asks about his/her obligations when attorneys from the County Attorney’s office and the District Attorney’s office appear.”
  • “Discussion: In our view, the situation is fully addressed by Opinion 22-168, notwithstanding that the present inquirer is being represented as a witness rather than a party.”
  • “Conclusion: Where a judge is represented by an assistant county attorney as a witness concerning a matter the judge handled during his/her former employment as an assistant district attorney:
    • (1) During the representation, the judge is disqualified, subject to remittal, from matters involving the specific county attorney who represents the judge.”
    • (2) After the representation concludes, the judge may preside in matters involving that attorney, provided the judge can be fair and impartial. Disclosure of the former attorney-client relationship is discretionary.”
    • (3) Both during and after the representation, the judge has no obligation to disclose or recuse with respect to other county attorneys not involved in representing the judge.”
    • (4) The judge’s representation by an assistant county attorney creates no obligation to disclose or disqualify in matters involving the District Attorney’s office.”

Kirkland and Jackson Walker Sued in Judge Romance Lawsuit” —

  • “Two of the United States’ most established law firms, Kirkland & Ellis LLP and Jackson Walker LLP, have been named in a high-stakes federal lawsuit alleging they concealed a secret romantic relationship that influenced the outcome of a major corporate bankruptcy. The proposed class action complaint, filed in the U.S. District Court for the Southern District of Texas in Houston, raises serious claims tied to judicial ethics, bankruptcy procedure, and investor losses tied to energy giant Chesapeake Energy’s Chapter 11 restructuring.”
  • “EJS Investment Holdings, a private investment firm and creditor in the Chesapeake Energy bankruptcy, alleges that Kirkland and Jackson Walker, along with additional parties, failed to disclose a long-running romantic relationship between a Jackson Walker attorney and the judge overseeing the case. The lawsuit argues that this concealment undermined the fairness and integrity of the bankruptcy process, unfairly favoring some creditors over others and resulting in significant financial harm to junior investors like EJS.”
  • “According to the complaint, the undisclosed relationship between former U.S. Bankruptcy Judge David R. Jones and then-Jackson Walker partner Elizabeth Freeman played a role in shaping legal strategies and court outcomes that benefited large institutional creditors, while leaving junior creditors with diminished recoveries. EJS claims these actions caused approximately $64 million in damages to its stake of roughly $150 million in Chesapeake Energy’s bankruptcy.”
  • “The suit contends that all defendants were aware, or should have been aware, of the relationship between Freeman and Jones during their work on the bankruptcy, yet failed to disclose it to the court and interested parties. This alleged nondisclosure, EJS asserts, deprived junior creditors of the opportunity to object or seek recusal based on a conflict of interest.”
Risk Update

Ethics and Conflicts News — Ethics of Joint Representation of Guardian and Care Facility, Firm Accused of Conflict and Fraud Conspiracy, Former GC Faces Self-dealing Lawsuit, Spotlight on DOJ and Attorney Recusals

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David Kluft asks: “Can I represent a long-term care facility at the same time I represent a resident’s guardian?” —

  • “WA Bar Opinion 2025-01 addresses lawyers for long-term care facilities who are asked by their clients to petition a court to have a guardian or conservator appointed for a resident, for example when the resident no longer has capacity to make informed decisions. Sometimes the lawyers are asked also to represent the guardian or conservator once they are appointed.”
  • “The WA Bar opines that because a guardian’s fiduciary responsibilities to the resident are broad, there are many instances in which the interests of the resident, as identified by the guardian, will conflict with the interests of the facility. Therefore, there would be few cases in which such conflicting representations would be consentable/waivable.”
  • “The WA Bar felt there was a little more leeway for conservators, who have a narrower focus on money, and therefore if there are no disputes over money the dual representation may be consentable.”
  • Opinion: here.

Client accuses Willkie of conspiring to commit $735M fraud scheme” —

  • “A Willkie Farr & Gallagher client has accused the law firm of aiding and abetting a $735 million fraud scheme related to a take-private deal for another one of its clients.”
  • “In a complaint filed in New York state court Tuesday, BRC Group Holdings said Willkie allegedly helped former Franchise Group Inc. CEO Brian Kahn hide federal investigations into earlier fraudulent conduct while assisting with a take-private deal that involved both clients.”
  • “According to Law.com, BRC Group Holdings also alleged that Willkie and Kahn worked together to hide crucial information and move the deal forward, which caused BRC Group Holdings to lose $735 million and Franchise Group to go bankrupt in 2024.”
  • “At the time of the deal, Kahn was under active investigation by the U.S. Department of Justice for committing fraud against another now-defunct company, Prophecy Asset Management, and had substantial debts related to a settlement agreement, the complaint says.”
  • “Law.com reports that Kahn pled guilty to conspiring to commit securities fraud against Prophecy Asset Management in federal court in December.”
  • “‘Willkie’s misconduct is particularly egregious,’ according to the complaint. ‘While simultaneously representing BRC as litigation counsel, Willkie prepared transaction documents for Kahn containing representations Willkie knew to be false, failed to disclose material conflicts of interest, and actively assisted Kahn in obtaining consents from the Prophecy settlement trust—all while remaining silent about these facts to its client BRC.'”
  • “In an email to Law.com, a Willkie representative said ‘the facts will make clear that our firm acted appropriately and with integrity at all times, consistent with our values and all ethical obligations.'”

Manufacturer Files Self-Dealing Lawsuit Against Former Deputy GC” —

  • “The San Jose, California-based arm of Singapore electronics giant Flex Ltd. has accused a former deputy general counsel of self-dealing—alleging that while employed as Flex’s lead IP attorney, he transferred company patents to a startup he co-founded called AutoConnect while keeping his tie to that business secret.”
  • “In a 28-page suit filed last week in federal court in San Francisco, Flex accuses Christopher Ricci of fraud, breach of fiduciary duty, fraudulent inducement and misappropriation of trade secrets.”
  • “After obtaining the patents, AutoConnect filed patent-infringement suits against Flex customers Ford, General Motors and Toyota. Some of these patents involved Ford’s SYNC voice-activated entertainment system—parts of which were supplied by Flex.”
  • “In the suit, Flex said it wasn’t aware that Ricci had ties to Manassas, Virginia-based AutoConnect until last year, when it responded to discovery requests from GM and Toyota as they prepared a defense against AutoConnect’s patent-infringement suits.”
  • “Flex said that process unearthed documentation that Ricci co-founded AutoConnect in 2015 with two partners—an arrangement that put him on both sides of the patent-transfer agreement. ‘Unsurprisingly,’ the suit says, terms of the agreement were ‘unreasonably favorable to AutoConnect.'”
  • “Ricci—whose LinkedIn account makes no mention of working for AutoConnect—today is CEO of Marco Island, Florida-based Impel Advantage, which he describes as an insurtech startup.”
  • “At the heart of the dispute is a portfolio of patents Flex sought to monetize. As Flex’s lead IP attorney in 2015, Ricci divested the portfolio to AutoConnect in exchange for a $500,000 promissory note, the complaint states.”
  • “Last June, Flex sent AutoConnect a written notice of default on the note. It said AutoConnect failed to pay or transfer the patents within 10 days. AutoConnect failed to comply, the suit states.”
  • “The complaint alleges Ricci took a number of actions that constituted self-dealing. For example, the patent-transfer agreements required Flex to pick up costs of patent prosecution and maintenance fees.”
  • “More significantly, the suit alleges Ricci did not include in the promissory note or in subsequent addenda a ‘grant-back’ clause that presumably could return the patents to Flex if AutoConnect defaulted.”
  • “‘No reasonable attorney acting in Flex’s best interests would have proposed, let alone agreed to, the terms of the note and the first addendum.'”
    Flex also alleges Ricci reached a deal with AutoConnect partners to become a one-third owner of the company after he left Flex.”
  • “‘At no point did Ricci inform Flex AP of Ricci’s financial interest in AutoConnect or the fact that Ricci was also providing legal advice to AutoConnect,’ wrote an attorney for Flex, Ashley Hyun-Jeong Kim of Bryan Cave Leighton Paisner.”
  • ‘This conflict of interest was in violation of several ethical rules governing Ricci’s conduct as Flex and Flex AP’s lawyer.'”

DOJ Moves to Eliminate Attorney Recusals in Sweeping Power Shift” —

  • “The Trump administration is preparing to upend a foundational safeguard of the Department of Justice, according to three senior administration sources, by proposing a rule that would effectively bar DOJ attorneys from recusing themselves from cases due to conflicts of interest.”
  • “The rule, expected to be filed in the Federal Register as early as this week, would grant Attorney General Pam Bondi final authority over all recusals. Under the proposal, career prosecutors and political appointees alike would be required to remain on assigned matters unless personally excused by the attorney general. There will be a period for public comment once the rule appears in the Federal Register.”
  • “Legal experts warn the move would dismantle a century-old norm designed to insulate federal prosecutions from political pressure and personal bias.”
  • “Current DOJ standards require attorneys to step aside from cases that present even the appearance of a conflict of interest, a principle codified in federal statute and reinforced through decades of internal ethics rules. The proposed policy would reverse that presumption entirely, transforming recusal from a duty into a privilege controlled at the top of the department.”
  • “Once published, the no-recusal rule is expected to face immediate legal challenges on multiple fronts.”
  • “Opponents are likely to argue that the change violates the Administrative Procedure Act, which requires a reasoned explanation for abrupt reversals of long-standing policy. Civil liberties groups are also expected to raise due process concerns, arguing that forcing a conflicted prosecutor to remain on a case undermines a defendant’s constitutional right to a fair trial.”
  • “Additionally, critics point to federal law requiring the attorney general to maintain regulations governing disqualification for conflicts of interest, a mandate the new rule may directly contradict.”
  • “If the rule is formally proposed, it will trigger a mandatory public notice-and-comment period. Legal professionals, advocacy groups, and members of the public will have the opportunity to submit objections and analysis through the Federal Register.”
  • “Whether the courts ultimately block the policy or allow it to stand, the proposal signals a dramatic redefinition of prosecutorial ethics, one that shifts power away from professional judgment and firmly into political hands.”
Risk Update

Client Files and Conflicts — Potential Conflict Results in Co-conspirators’ Counsel DQ, New ABA Opinion on Duty to Share Information with Former Clients

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ABA Clarifies Lawyers’ Duty to Share Information With Former Clients” —

  • “The American Bar Association has issued new guidance clarifying that lawyers may be ethically required to provide former clients with important information related to their representation even when that information is not contained in the client’s official file. The guidance, issued in ABA Formal Opinion 520, addresses lingering questions about lawyers’ post-representation responsibilities under the Model Rules of Professional Conduct.”
  • “At the center of the opinion is Model Rule 1.16(d), which requires attorneys to take reasonable steps to protect a client’s interests when representation ends. Traditionally, this has included returning client papers, property, and unearned fees. However, the ABA now makes clear that simply handing over a physical or electronic file may not always be enough.”
    Information Beyond the Client File May Be Required”
  • “According to the ABA, lawyers may need to provide former clients or their new attorneys with material information that exists outside the formal client file if that information is reasonably necessary to protect the client’s interests. This can include key factual details, procedural history, or strategic insights that were never documented but are known to the lawyer through experience with the matter.”
    “For example, an attorney who withdraws from a case may possess critical knowledge about upcoming deadlines, settlement discussions, witness credibility, or procedural risks that are not reflected in written records. If withholding that information would disadvantage the client, the lawyer may have an ethical obligation to disclose it.”
  • “The opinion emphasizes that the duty is context-specific. Lawyers are not required to recreate entire case histories or provide exhaustive recollections. Instead, the focus is on whether the information is reasonably necessary and practicably available to safeguard the former client’s legal rights.”
  • “The ABA also outlines important limits to this obligation. Lawyers are not required to provide information that the former client or successor counsel can easily obtain through other means, such as court dockets or publicly available records. Additionally, attorneys are not expected to conduct new research or generate new materials after the representation has ended.”
  • “Confidentiality obligations remain intact. Any information disclosed must comply with applicable ethical rules, including those governing client confidentiality and privilege. The opinion does not authorize attorneys to reveal protected information beyond what is necessary to protect the former client’s interests.”
  • “The ABA further notes that lawyers are not obligated to volunteer irrelevant impressions, personal opinions, or speculative assessments. The duty applies only when disclosure is reasonably required to avoid harm to the client during a transition in representation.”
    Clarifying a Longstanding Ethics Gray Area”
  • “Legal ethics experts say the opinion provides much-needed clarity on an issue that has long created uncertainty for attorneys. While most lawyers understand their duty to return client files, fewer have been certain about what obligations exist regarding unwritten knowledge or informal information.”

Potential conflict of interest disqualifies co-conspirators’ counsel” —

  • “A federal court has disqualified an attorney from representing two defendants in a drug distribution and firearms trafficking conspiracy because it found a conflict prevented him from providing comprehensive advice to one client where it may be detrimental to another client.”
  • “The attorney maintained that both defendants had waived the conflict and had no desire to cooperate with the government. The court said that his disqualification was appropriate to protect the integrity of the judiciary and to avoid the appearance of impropriety.”
  • “‘The prudent decision, and the only correct decision is for a lawyer to decline representation of closely related co-conspirators,’ U.S. District Judge Robert S. Ballou held in United States v. McCoy (VLW 026-3-005).”
  • “Matthew Felty of Abingdon, the attorney disqualified from representing the defendants in this case, told Virginia Lawyers Weekly that he consulted with the state bar as soon as the conflict was brought to his attention.”
  • “‘Both of my clients were adamant that I continue with the representation and signed waivers in open court waiving any conflict,’ Felty said. ‘I complied with all of my ethical obligations to my respective clients and to the court.'”
  • “Despite his compliance with ethical rules and his clients’ written waivers after consultation, Felty said the court ‘applied a different, more expansive rule in a case where there was no actual conflict, but only potential, hypothetical or theoretical conflicts.'”
  • “‘I am confident that none of those theoretical conflicts would have turned into actual conflicts,’ he said. ‘I respect the court’s decision and have complied with my ethical obligations in ending my representation of both clients.'”
  • “When the government advised him of the potential conflict in representing both McCoy and Headen, Felty maintained that both understood the conflict, that they did not want to cooperate in any manner with the government or be adverse to each other and that both wanted Felty as counsel.”
  • “The Virginia State Bar later advised Felty that the conflict appeared to be more theoretical than actual, since his clients did not want to cooperate against one another, but said he should inform them he may be conflicted out of both representations if the situation changes.”
    ‘Prudent decision’”
  • “Whereas he undertook representation of two closely related co-conspirators charged in separate criminal complaints, Felty owed a duty to each client to advise them regarding their legal jeopardy, their liberty interests and those factors which could affect their potential sentences.”
  • “Ballou pointed out that factors which could affect the clients’ sentences included ‘providing substantial assistance in the investigation or prosecution of others for their criminal activity and the acceptance of responsibility if pleading guilty.”
  • “‘This duty does not end,’ he continued, ‘upon a client refusing at some point during the representation to cooperate with the government in its investigation or prosecution of others or a client deciding not to acknowledge relevant conduct.'”
  • “Under federal sentencing guidelines, ‘a client who accepts responsibility for his criminal activity must truthfully admit the conduct comprising the offense of conviction and additional relevant conduct for which the client is accountable. …”
  • “‘A lawyer representing intimately intertwined co-conspirators has a conflict that prevents the lawyer from providing comprehensive advice to one client where it may be detrimental to another client,’ Ballou held.”
  • “Therefore, the judge said, a lawyer should decline representation of closely related co-conspirators.”
Risk Update

Risk Reading — Law Firm PR and Risk Management, Former Client Seeks Firm DQ on Antitrust Matter, Lawyer Disqualification Upheld in LLC Dispute

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Lawyer’s disqualification in LLC member dispute upheld” —

  • “The lawyer for a cannabis business organized as a limited liability company could not represent a member in a dispute with another member — notwithstanding the client member’s claim that the LLC lacked an actual, independent interest in the outcome of the litigation, the Appeals Court has found.”
  • “The case involved a dispute between Sean Morrison and Robert Bujold, who both held a 50 percent interest in Cannaburg Cultivation Cooperative when the LLC was sued for breaching a contract with an architectural and engineering corporation. The corporation had been hired to convert a property owned by a company owned by Bujold — 310 Broad Street II, LLC — into a cannabis cultivation facility.”
  • “In the course of the litigation, Bujold asserted third-party impleader claims against Morrison for breach of contract and breach of fiduciary duty. Bujold later moved to disqualify Morrison’s counsel in the impleader action, Katherine Bierwas, who also represented Cannaburg.”
  • “According to Bujold, by taking up Morrison’s case, Bierwas was in violation of Massachusetts Rule of Professional Conduct 1.7, which prohibits the simultaneous representation of adverse parties.”
  • “But Morrison contended that Cannaburg’s interests were not adverse to Morrison’s because the LLC was a ‘nominal’ party in the impleader action with no independent interest in the outcome of the litigation.”
  • “Superior Court Judge Valerie A. Yarashus in a July 2024 decision concluded that Rule 1.7 prohibited Bierwas from representing both Cannaburg and Morrison because their interests were directly adverse and could not be waived.”
  • “An Appeals Court panel affirmed in a per curiam decision.”
  • “‘Here, Attorney Bierwas has a duty to act in the interests of Cannaburg and ensure the directors are acting in the interests of the company, while she also has a competing interest in defending her client, Morrison, from claims that he was breaching his duties to Cannaburg,’ the panel wrote. ‘Thus, as the judge below points out, Attorney Bierwas’s claim that Cannaburg has no viable action against Morrison is the very reason Rule 1.7 exists.'”
  • “The 15-page decision is Fuss & O’Neill, Inc. v. Cannaburg Cultivation Cooperative, LLC, et al., Lawyers Weekly No. 81-004-26.”

PR in Professional Services: Navigating Conflicts Without Going Quiet” —

  • “In professional services, trust is everything. Whether you’re advising on legal, financial, or strategic matters, clients expect discretion—and that extends to how your firm communicates publicly. PR and media relations are powerful tools to build brand visibility and showcase expertise. But when client relationships are sensitive or commercially complex, conflict risks can make media engagement tricky.”
  • “Here’s how to navigate those challenges effectively. Common Conflict Triggers. Before engaging with the media, firms should assess whether public statements:
    • a) make direct or indirect reference to a client or matter (or new business prospect)”
    • b) are addressing—or advocating a position on—a subject-matter which is particularly sensitive to a client or ongoing matter”
    • c) appear to be advocating a position on a subject which is likely to preclude them from future new business opportunities (for instance due to procurement rules, tender processes, panel criteria, etc.)”
    • d) reference existing clients which are happy to be named publicly but which are likely to present conflict issues for the firm when it comes to new business opportunities”
    • e) include insights which have been gleaned from the experience of advising a particular client who may be uncomfortable with details of their experiences being discussed publicly (even if fully anonymised)”
  • “Conflict considerations can present obstacles to a PR and media relations campaign. For instance, when a news story relates to or has features in common with an existing client or matter, it can prevent the firm engaging with what otherwise could have been an opportunity to project expertise to the market and raise brand profile.”
  • “Some PR opportunities will be a definite no-go based on conflict factors. Other times, an opportunity may involve some potential sensitivities, but the issue or story is significant enough that the firm chooses to accept the risk – though proceeds with caution.”
  • “Detailed consideration of conflicts can also present a practical barrier to delivery of PR opportunities when they require a swift turnaround of content, as the process of internal coordination and approval from client relationship holders can be lengthy.”
    Practical solutions”
  • “Ultimately, conflict issues are inevitable in B2B communications. Here are some tips to successfully manage them in a professional services PR campaign:
    • 1. Conflict mapping: When designing a PR strategy, it is valuable to involve both your spokespeople and business development teams to identify which organisations in a target sector, industry, or market should be excluded from media discussion on conflict grounds. This process clarifies which organisations remain viable targets, enabling the PR team to focus resources on monitoring news and pitching stories or commentary related specifically to them. Since it is unlikely that an advisory firm will represent all major players in an industry, there should always be viable options available.
    • 2. Media due diligence: Where conflicts are a particular concern, additional PR due diligence can help assess potential media opportunities. This may include clarifying the reporting angles, identifying sources to be quoted, and understanding which organisations are likely to be mentioned elsewhere in the write-up. Journalists may be willing to share these details in advance of an interview or commentary submission, allowing firms to better evaluate the risks of engagement from a conflict perspective. In addition, it may be useful to review previous media reports, as well as court records, public databases, and other resources to determine what information is already publicly available. This helps guide decisions about what can be appropriately disclosed in the media.
  • 3. Spokesperson briefing and support: Before any direct media engagement, the firm’s spokespeople should be thoroughly briefed and supported by the PR team to ensure they fully understand the relevant conflict requirements and can navigate them confidently in discussions with journalists. This is where media training techniques come in useful, as well as providing comprehensive briefing materials, key messages, and FAQs for a spokesperson to review ahead of any encounter. A preparatory call or mock interview can also be an effective way to build confidence and reduce risk.”
  • “Every professional services organisation has its own culture around how it publicises its work and its clients. Some adopt a more open approach which reflects their appetite for courting publicity, while others are more reserved. This is often shaped by the nature of their client relationships, as clients themselves vary in their attitudes toward PR and publicity. The role of PR professionals is to balance these considerations – adapting media strategies to protect client relationships, minimise risk, while still ensuring consistent brand visibility.”
  • “A firm that represents multiple clients within a particular industry or market is likely to have deeper insights than one that does not. By sharing those insights with the media in a considered and responsible way, the firm can create value not only for its clients but also for the wider industry. With the right strategy, conflict-sensitive PR can still be bold, effective, and trusted.”

CoStar Seeks to Disqualify Quinn Emanuel from Antitrust Case Over Alleged Conflict of Interest” —

  • “… CoStar Group has asked a California federal judge to disqualify Quinn Emanuel Urquhart & Sullivan LLP from representing a competitor in an antitrust counterclaim. This litigation arises in the context of CoStar’s ongoing copyright infringement case against the rival commercial real estate platform. CoStar raises concerns about potential conflicts, given that Quinn Emanuel has previously represented CoStar in unrelated matters.”
  • “The dispute centers on Quinn Emanuel’s prior service to CoStar and involves the law firm’s desire to terminate its ongoing representation of CoStar in separate litigation. The backdrop to this legal entanglement is an intricate battle over intellectual property and antitrust allegations in the competitive commercial real estate data market. CoStar’s motion aims to mitigate risks associated with a law firm holding material confidential information from previous representations.”
  • Text of motion: here.
Risk Update

Experts and Ethics — Side-switching Expert Disqualified, Withdrawal Motion Ethics Opinion Unworkable in New Jersey

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David Kluft asks: “If an expert “switches sides” but his opinion doesn’t change, should he be disqualified?” —

  • “A NJ plaintiff sued an insurance company for wrongly denying his workers compensation claim. The insurance company hired an expert to opine that its claims handler (a separate company) acted reasonably in denying the claim. The insurance company ultimately settled with the plaintiff.”
  • “The insurance company then sued the claims handler, which had refused to cooperate in the workers compensation litigation, for indemnification. The claims handler hired the insurance company’s former expert from the workers compensation case as its expert in the indemnification case to give the same opinion: that the claims handler acted reasonably.”
  • “The insurance company moved to disqualify the expert. The Court held that the test for disqualification of an expert who ‘switches sides’ is (1) whether it was objectively reasonable for the first party to think a confidential relationship with the expert existed; and (2) whether confidential information was actually exchanged.”
  • “The Court held that the expert had ‘switched sides,’ even though his opinion stayed exactly the same. The Court found that it was reasonable to believe the relationship between the insurer and the expert had been confidential even as to the claims handler where the claims handler had not cooperated in the first litigation, and that confidential information (strategies, strengths and weaknesses of the case, etc.) was actually shared. The expert was disqualified.”
  • Decision: here.

The Law Journal Editorial Board Opines: “ABA’s Latest Guidance on Withdrawal Motions May Be Unworkable Under NJ Rules” —

  • “An application to withdraw as counsel forces the withdrawing lawyer to balance two fundamental ethical rules—the preservation of confidential communications relating to the representation under Rule 1.6 of the Rules of Professional Conduct, and the mandatory and permissive bases of withdrawal under RPC1.16. On Dec. 3, 2025, the American Bar Association Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 519 that emphasizes the confidentiality component of the balance and lays out what may and may not be said, and the preferred approach.”
  • “While addressing the same core issue, New Jersey’s RPC1.6 has certain differences that lead us to view the ABA opinion as unnecessary and inapplicable, if not unworkable, under our current Court Rules.”
  • “RPC1.6 prohibits lawyers from disclosing ‘confidential information’ —information relating to the representation of a client—unless a specific exception applies, such as client consent. According to a recent ethics opinion from the American Bar Association, a lawyer’s motion to withdraw as counsel is not permitted to reveal ‘confidential information’ including, for example, information about the client’s failure to pay the lawyer’s bill; that the lawyer and client have a fundamental disagreement; or that the lawyer has a conflict of interest.”
  • “Essentially, the lawyer may (1) use personal information unrelated to the representation, (2) secure client’s informed consent to disclosures, or (3) employ the acknowledged permissive disclosures allowed under Rule 1.6, such as to prevent reasonably certain death or substantial bodily harm.”
  • “To prevent disclosure of confidential information on a motion to withdraw, Opinion 519 suggests the following steps. First, submit the motion referring only to ‘professional considerations’ or ‘irreconcilable differences,’ without disclosing any further information. Second, if the court advises that further information is necessary, the lawyer should try to persuade the court to rule on the motion as is. Third, the lawyer may disclose confidential information if the court ‘orders’ the lawyer to do so, because ABA Model Rule1.6(b)(6) includes an exception for disclosures made ‘to comply with other law or a court order.’ But even then, the lawyer may disclose confidential information only to the extent ‘reasonably necessary’ to satisfy the needs of the court, preferably in camera or under seal. Fourth, if the court does not ‘order’ the lawyer to disclose but states that the motion to withdraw will be denied unless the lawyer provides more information, ‘the lawyer remains bound by the duty of confidentiality.'”
  • Opinion 519 should not be considered when evaluating such motions in New Jersey. First, when confronted with a motion to withdraw with no explanation other than ‘professional considerations’ or ‘irreconcilable differences,’ Opinion 519 imagines that the judge may advise the lawyer that additional information is needed. But we predict that, absent a change to the Rules of Court, most New Jersey judges would simply deny the motion. (See the Appellate Division’s 1994 decision in State v. Johnson, which denied a motion to with draw in part because ‘the attorney did not give the trial court any concrete reasons for requesting the withdrawal, but merely stated that he believed his continued representation of defendant would not provide defendant with effective assistance of counsel and he was ‘not at liberty to disclose the reasons for that’’). Opinion 519 itself acknowledges that some courts expect the lawyer to explain the basis for the motion, and ‘perhaps to do so in significant detail.'”
  • “As noted, Opinion 519 would permit disclosure if the judge ‘orders’ it, but not if the judge suggests that she cannot rule on the motion without it. But the difference may be subtle, and we anticipate many real-world scenarios in which the lawyer will be hard-pressed to determine whether disclosure has been ‘ordered’ or merely suggested. Opinion 519 also notes that even when ordered, disclosure should preferably be made in camera or under seal, but in New Jersey, that would probably require a court order as well, given the absence of any Court Rule or RPC authorizing a lawyer to unilaterally file material in camera or under seal. At each of the four steps, Opinion 519 envisions some sort of dialogue between the lawyer and the motion judge. With far less oral argument, such opportunity for the dialogue that Opinion 519 envisions are unlikely in New Jersey.”
  • “A fundamental difference in NJ RPC 1.6 also militates against the ABA’s approach. Opinion 519 is premised upon the explicit exception in Model RPC 1.6(b)(6) which permits a lawyer to reveal confidential information ‘to the extent the lawyer reasonably believes necessary … to comply with other law or a court order.’ But New Jersey did not adopt the ‘court order’ exception; rather, our RPCs provide that a lawyer may reveal such information ‘to the extent the lawyer reasonably believes necessary … to comply with other law.’ Many other states similarly lack that exception. One wonders what the ABA’s Standing Committee would suggest to lawyers in New Jersey (or other such states) seeking to withdraw.”
    Both Model Rule 1.6 (a) and its New Jersey corollary provide that disclosure is permitted when ‘impliedly authorized in order to carry out the representation.’ Opinion 519 assumes, without analysis, that a disclosure in furtherance of a motion to withdraw is not authorized by that exception, even when Rule 1.16(a) requires the lawyer to seek to withdraw. But the phrase ‘in order to carry out the representation’ is quite broad. It presumably covers the disclosure of confidential information (ex parte, if appropriate) in connection with, for example, (1) discovery disputes over alleged privileged information, (2) motions to disqualify a lawyer due to an alleged conflict of interest, and (3) settlement and mediation conferences, both private and through the court. To be sure, a motion to withdraw is likely to be opposed by the client. (If the client consents to withdrawal, a motion is often unnecessary.) But a motion to withdraw may still be part of ‘carry[ing] out the representation,’ especially if the motion is required by RPC 1.16(a)(1) (mandating withdrawal if the representation ‘will result in violation of the [RPCs] or other law’).”
  • “Opinion 519 acknowledges that courts have taken varied positions on the issue. Opinion 519, with minimal justification, takes the strictest view: unless an explicit exception applies or the client consents, a lawyer may not reveal ‘information relating to the representation’ in support of a withdrawal motion.”
  • “We subscribe to a broader view—minimal disclosure of information relevant to a motion to withdraw is implicitly permitted by RPC 1.6. Our courts have heard and decided many such motions to withdraw and, as far as we are aware, no New Jersey court has suggested that such disclosure is improper.”
Risk Update

Curious Conflicts — “Stranger” Cannot Call Pickleball Club Conflict, Argument on Behalf of Client Proves Conflict

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David Kluft asks: “If I argue there is no conflict between my clients because they don’t have viable claims against each other, have I just proven that there is a conflict?” —

  • “A and B each owned 50% of a Massachusetts LLC. In the context of a complex litigation, they sued each other, and A brought derivative breach of fiduciary claims against B on behalf of the LLC.”
  • “The same lawyer appeared in the case for both B and the LLC. A moved to disqualify her, arguing that her two clients (B and the LLC) had claims against each other. The lower court disqualified her.”
  • “The lawyer argued on appeal that the LLC wasn’t a real party and in any case the LLC’s derivative claims against B were bogus.”
  • “The Appeals Court held: well, you just made the lower court’s point. Your argument on behalf of B that your other client, the LLC, has no viable claims demonstrates a conflict of interest and is ‘the very reason Rule 1.7 exists.’ Disqualification affirmed.”

Who Can Disqualify Counsel? Standing Matters; 3rd DCA Shuts Down ‘Stranger’ Conflict Challenge” —

  • “In Takefman v. The Pickleball Club (Fla. 3d DCA 2025), a plaintiff sued The Pickleball Club LLC, its CEO, and its CFO — then tried to disqualify their law firm on conflict grounds. The problem? He had never been that firm’s client.”
  • “The Third DCA affirmed the denial of disqualification, and the opinion is a clean refresher on standing to disqualify counsel:
    • As a general rule, only a current or former client has standing to seek disqualification based on conflicts of interest or confidentiality concerns.”
  • A third-party litigant without privity to the law firm is a ‘stranger’ to the attorney-client relationship and typically cannot invoke conflict rules as a weapon.”
  • “The court noted a narrow exception: a non-client may sometimes seek disqualification where necessary for the fair and efficient administration of justice. But there was no such showing here. The firm had obtained informed consent from the LLC, CEO, and CFO; there was no evidence of divided loyalty that affected the fairness of the proceedings.”
  • “Practice pointers”
    • “For movants: Before filing a motion to disqualify, ask: Did this firm ever represent me? Can I articulate a concrete prejudice to the proceedings, not just discomfort? If not, you may lack standing — and the motion may look tactical rather than principled.”
    • “For counsel: When representing an entity and its principals, obtain written conflict waivers / informed-consent letters contemporaneously. Keep the file clean enough that, if challenged, you can quickly demonstrate who your clients are and what was disclosed.”
  • “Takeaway: Disqualification is an extraordinary remedy, not a litigation tactic for outsiders. If you’re not the lawyer’s client — and can’t show a systemic threat to the integrity of the case — you likely don’t have standing to knock opposing counsel out.”
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Epiq Assistance — Intapp Intake and Conflicts Consulting (Sponsor Spotlight)

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Risk Update

Conflicts and Clashes — Case Credit, Conflicts & Systemic Risk, Alaska Ends Law Firm Relationship Citing Conflicts

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Hong Kong Lawsuit Against Latham Exposes Big Law’s Systemic Failures” —

  • “A lawsuit filed with the Hong Kong High Court in late December has created a ruckus in the legal community in Asia. A former Latham & Watkins counsel is suing the firm and one of its equity partners for fraudulent misrepresentation. Tingfei Fan claims she was constructively dismissed after raising issues with management over alleged misconduct by partners at the firm. Latham & Watkins has vehemently denied the allegations.”
  • “Her claim includes assertions that she was led by her supervising partner to believe that she was being put up for promotion to income partner for three years but only later found out from other management-level partners that that never happened. She claims this is despite her bringing in more than$19 million in legal fees and revenue between 2020 to 2024.”
  • “But the devil’s also in the details. According to the court documents, the plaintiff, who worked at Latham in Hong Kong for close to a decade, alleged that the equity partner, Ji Liu, who is named as a defendant in the case, disregarded ‘potential conflict of interests by not generating a client matter file or number or doing so under a different client file or matter and directing those under his supervision to work on such matters without a conflict check.'”
  • “One partner at a U.S. firm described that particular allegation as ‘egregious misconduct,’ if true.”
  • “Latham has refuted the claims in a statement to Law.com International, calling them ‘baseless’ and ‘meritless’ and labelling the case an ’employment matter’ brought by someone who has not been at the firm for over 18 months. The case is due to be played out in court.”
  • “One lawyer said some allegations regarding credit misappropriation are ‘not misaligned’ to their experience at the firm but hastened to add that it ‘happens everywhere.'”
  • One former Latham partner who had worked in the Hong Kong office for over a decade and is now a regional general counsel at a Fortune 500 company, commented on my LinkedIn post last week about the lawsuit: ‘Not surprised, not new facts, not new culture.’ She did not respond to a request for further comments.”
    Some of the Latham clients I spoke to last week said the U.S. firm’s lawyers who have done work for them ‘have been excellent’ and’ every firm has bad eggs.’ Yet two said that they are curious how Latham will deal with the matter internally.”
  • “The allegations against Latham illustrate the many systemic failures in the business of law that we have somehow grown resigned to. But common practice is not best practice.”
  • “What I find most difficult to come to terms with is the fact that a lawyer’s career path and trajectory (or the lack thereof) can hinge on just one supervising partner, who incidentally also needs your subordination to sustain or increase their take each year.”
  • “But what if Fan’s claims are true? Where are the checks and balances in place to ensure that all associates and counsel are given due consideration so that no one is forsaken in their pursuit of partnership, even if ultimately they don’t succeed?”
  • “Are there processes in place to ensure no one in the lower ranks is being held down or left behind? Are office managing partners and regional leaders taking charge and resolving such intractable conflicts?”

The WSJ Editorial Board Writes: “Alaska Dumps Some Trial Lawyers” —

  • “Trial lawyers’ contracts with state governments have been a walking conflict of interest for years and more states are calling an end to it. The latest is Alaska, which on Friday terminated its relationship with Baron & Budd, the notorious Texas plaintiffs firm.”
  • “In a letter to the firm, the office of Alaska Attorney General Stephen Cox said Baron & Budd was being dismissed after the firm disclosed that it represents more than 300 clients in cases that overlap with state litigation on chemicals called per- and polyfluoroalkyl substances (PFAS). Alaska says those relationships create a conflict of interest with state litigation on similar matters and should have been flagged long ago.”
  • “Under the terms of the state’s 2021 contract with Baron & Budd, the firm was required to ‘immediately notify’ the state of ‘any potential or actual conflict of interest’ and ‘fully disclose the nature of the conflict.’ The conflicts weren’t disclosed until November, when Alaska asked lawyers with state contracts to provide such information.”
  • “When it submitted its list, Baron & Budd told Alaska it was ‘aware of no conflict of interest that arises from our simultaneous representation of Alaska and these listed clients.'”
  • “But how does that work? Representing multiple entities in pursuit of the same pots of money is a zero-sum game. If a firm shares documents or legal strategies with multiple parties, who benefits and at whose expense?”
  • “The trial lawyer firing is the second round for Alaska, which dismissed South Carolina-based Motley Rice in October for cause over that firm’s conflicts of interest. The state said at the time that Motley had filed civil lawsuits for private clients that raised many of the same issues as those ‘raised in the litigation for which the firm represents the State.'”
  • “Montana, Iowa, Kansas and Utah have also dismissed plaintiffs’ firms in recent years, and Alaska’s terminations are a welcome shake-up for the plaintiffs bar. Kudos to AG Cox for the legal stable-cleaning.”
Risk Update

Judicial Ethics & Law Firm Conflicts News — Talc DQ Fights Continue, Alito Stock Recusal, Texas Marriage Rule Update

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J&J Seeks Beasley Allen’s Removal From NJ Talc Litigation” —

  • “‘‘It stinks’ ain’t the law in New Jersey—you have to show an ethical violation.'”
  • “That was the key argument Beasley Allen’s attorney Jeffrey M. Pollock brought to a New Jersey state court Tuesday in his attempt to convince the judges that the Alabama-based trial firm should be allowed to stay on as co-lead counsel in the massive litigation against Johnson & Johnson over alleged illness from exposure to talc products.”
  • “The company urged the Superior Court Appellate Division panel to reverse a lower court ruling finding J&J’s prior bankruptcy lawyer hadn’t ‘associated’ with Beasley Allen despite collaborating with the trial lawyers in a mediation that sought to keep the multi-district litigation and multi-county litigation in New Jersey out of bankruptcy court. At stake: the major plaintiff-side firm’s cut of potentially $22 billion in claims brought by vaginal cancer patients who accused the health-care giant of selling asbestos-tainted talc products.”
  • “Judges Mark K. Chase and Thomas W. Sumners Jr. focused on whether the activity of former Sidley Austin attorney James Conlan constituted ‘association’ when he jumped ship from the firm to form a settlement consultancy business called Legacy Liability Solutions, where he worked in a non-lawyer capacity. If interactions Conlan—who worked roughly 1,600 hours on J&J’s bankruptcy for Sidley—had with Beasley Allen could be considered ‘associating’ then they could violate New Jersey Rule 5.3(c) blocking conflicts arising from collaboration between attorneys and non-lawyers with conflicts in litigation.”
  • “‘If Conlan was acting as an attorney would that have been problematic?’ Sumners asked.”
  • “‘Yes,’ said Pollock, managing member of Pollock Law. ‘But he was not. He was never on the payroll. He was never hired.'”
    Rules ‘Effecitvely Neutralized’”
  • “J&J portrayed this as an easy case, since no one disputes that if Conlan was acting as an attorney there would be a conflict.”
  • “While case law doesn’t establish what association means, Conlan’s experience on this specific case is more than sufficient to disqualify Beasley Allen, said Peter G. Verniero, a former New Jersey Supreme Court justice and member at Sills Cummis & Gross PC.”
  • “‘Our legal system cannot function if a lawyer for one side is permitted to collaborate or partner with lawyers on another side on the same matter involving the same issues and claims,’ he said.”

Alito recuses himself from oil case ahead of Monday’s arguments” —

  • “Supreme Court Justice Samuel Alito on Thursday recused himself from a battle between Louisiana parishes and major oil companies set to be argued next week. “
  • “Alito regularly steps aside because of his direct stock holdings in more than two dozen companies, but the timing of his latest recusal was unusual. “
  • “The conservative justice participated in the case when the court decided last summer to take it up. His announcement landed less than a week before oral arguments. “
  • “In a letter to the parties, Supreme Court clerk Scott Harris explained that Alito was recusing himself because of his holdings in ConocoPhillips, the parent corporation of Burlington Resources Oil and Gas Company, one of the companies named in the suit. “
  • “Before the justices agreed to get involved, Burlington Resources penned a letter to them saying the company was ‘withdrawing’ and would not ‘have any other involvement’ in ‘the above-referenced case.’ On that basis, Alito initially decided not to recuse himself, according to Harris.”
  • “‘Later briefing, however, noted that Burlington remained a party in the district court,’ Harris wrote in his letter. ”
    “Most Supreme Court justices do not directly own individual stocks. Alito’s decision to do so regularly leads him to recuse and has sparked criticism from some ethics watchdogs.”
  • “Alito has recused himself 12 times this term from voting on a petition or merits-stage case so far, more than twice as many as any of his colleagues, according to The Hill’s review of the court’s docket.”

Texas Supreme Court allows judges to refuse wedding ceremonies based on religious beliefs” —

  • “Texas judges can now refuse to perform same-sex wedding ceremonies based on religious beliefs.”
  • “The Texas Supreme Court amended the Texas Code of Judicial Conduct, adding a comment to clarify that it is not a violation for judges to refrain from performing weddings due to a ‘sincerely held religious belief.'”
  • “Jonathan Saenz, president of Texas Values, called the rule change ‘an important victory for religious freedom.'”
  • “‘A judge should not have to choose between their conscience and their career,’ Saenz said in a statement.”
    “Chief Justice James D. Blacklock and seven justices signed the order adding a comment to Canon 4 of the judicial conduct code.”
  • “A senior staff attorney with the American Civil Liberties Union (ACLU) of Texas provided the following statement:”
    • “Allowing judges who offer marriage services to the general public to deny certain couples the right to marry paves the way for discrimination. Judges should remain neutral and unbiased when performing any public service, but this rule change holds weddings to a different standard and allows public officials to discriminate against us based on who we love, where we’re from, what we look like, or how we worship.”
  • “Jacob Reyes, GLAAD Texas Representative and News Coordinator said:”
    • “Breaking the law to discriminate is something all reasonable people object to. Texans, no matter their identity, expect more from state officials who swear to uphold the Constitution and treat everyone equally. Marriage equality remains the law of the land, as determined by the Supreme Court over 10 years ago and codified by Congress through the Respect for Marriage Act, and all officials have a responsibility to put personal views aside and serve their constituents.”

Judge who allegedly kept ‘Book of Grudges’ faces misconduct charges” —

  • “A Pennsylvania judge who allegedly kept a “Book of Grudges” and a sexually explicit calendar in her office violated judicial conduct standards, according to formal charges filed Wednesday.”
  • “Zanelli allegedly described a local attorney as “just a d- – -” in the “Book of Grudges” and made notes that were critical of another person who appeared in her court in landlord-tenant matters. She placed the ‘Book of Grudges’ in a general work area in the office accessible to her staff to add notations to it if they wished, according to the complaint.”