Bressler Risk Blog

“Connell Foley Survives Investment Firm’s DQ Bid In Bias Suit” —

• “A federal judge in New Jersey has rejected a Black-owned investment company’s request to disqualify a Connell Foley LLP attorney from representing the state in the investment firm’s bias case, reasoning that there is nothing showing the law firm or the lawyer previously represented the company.”
• “U.S. Magistrate Judge Michael A. Hammer found on Tuesday that Blueprint Capital Advisors LLC was unable to prove that Connell Foley attorney Elnardo J. Webster had a previous attorney-client relationship with Blueprint principal Jacob Walthour that would disqualify Webster from representing New Jersey in the instant dispute. The lawsuit accuses the state of committing to investing millions of dollars in the company’s alternative investment program, then passing on the firm’s confidential information to BlackRock.”
• “Blueprint Capital Advisors ‘falls well short of its burden to establish the existence of an attorney-client relationship between Mr. Walthour or BCA and Mr. Webster,’ Judge Hammer said in an opinion. ‘BCA has provided only vague assertions from Mr. Walthour that he considered Mr. Webster his attorney, while attaching multiple exhibits that demonstrate Mr. Walthour and Mr. Webster rarely spoke.”'”
• “In February, Walthour cited a conversation he had with Webster in 2016, as well as a follow-up email containing proprietary and confidential company information and an hourslong in-person meeting between him and Webster later in 2016, among other things, as evidence to back his disqualification bid.”
• “Judge Hammer determined the evidence shown was not enough to back Walthour’s claims of an attorney-client relationship, noting the brief nature of the phone calls, which totaled 11 minutes, and the principal’s admission they had met only a couple of times in person between 2016 and 2024.”
• “Mr. Walthour has presented only three emails he sent Mr. Webster,’ according to the opinion. ‘There is no evidence before the court to suggest that Mr. Webster responded to any of them. … Similarly, the two briefly texted in March 2022 and June 2022, and did not communicate again until June 2024.”
• “Additionally, the judge said he found it difficult to believe that an attorney-client relationship existed when Blueprint decided to go with different legal counsel to handle its bias suit, namely lawyers from Brown Rudnick LLP and Nagel Rice.”
• “According to evidence provided during discovery, it was determined that the investment company reached out to eight different firms in its efforts to engage legal counsel, none of them being Connell Foley, Judge Hammer said.”
• “‘Even as BCA and Mr. Walthour were actively seeking outside legal advice and retaining attorneys for this matter, there is no evidence that they retained, or made any effort to retain, Mr. Webster and his firm,’ according to the opinion. ‘Courts in this district have similarly found a movant’s retention of other attorneys to be highly relevant in determining whether an implied attorney-client relationship was formed.'”

“Trump Organization to fire legal adviser after Trump criticizes lawyer for Harvard work” —

• “U.S. President Donald Trump on Thursday lashed out at a lawyer for the Trump Organization who is also representing Harvard University in its lawsuit against his administration, saying the company should fire him.”
• “Trump’s post on his social media platform Truth Social did not name the attorney, but it appeared to describe prominent Washington lawyer William Burck of law firm Quinn Emanuel.”
• “The Trump Organization is run by Trump’s sons Eric Trump and Donald Trump Jr. Asked whether Burck still worked for the Trump Organization, Eric Trump said in a statement on Thursday: ‘I view it as conflict and I will be moving in a different direction.’ He did not elaborate.”
• “Burck is a lead attorney for Harvard in a lawsuit filed this week accusing the Trump administration of illegally moving to freeze more than $2 billion in federal funding as part of a pressure campaign against the research institution and other schools.”
• “In January, the Trump Organization said it retained Burck, a longtime Republican insider, as an outside ethics adviser to help develop and maintain internal policies to ward against conflicts of interest.”
• “Burck and Quinn Emanuel did not immediately respond to requests for comment.”
• “The White House did not immediately respond to a request for comment.”
• “A representative for Harvard did not immediately respond to a request for comment.”
• “Burck, a former White House lawyer for former Republican President George W. Bush, has also represented Steve Bannon and other Trump backers. Quinn Emanuel, with more than 1,000 lawyers, is a longtime law firm for Tesla CEO and Trump ally Elon Musk.”
• “Harvard’s lawsuit is not the firm’s only case opposing the administration. Quinn Emanuel is separately representing wrongly deported man Kilmar Abrego Garcia in his lawsuit seeking his return from El Salvador to the United States.”

“More Associates Quit and Labor Group Files Complaint Against Skadden in Latest Backlash to Trump Deals” —

• “Scrutiny on law firm deals with the Trump administration, both from within and beyond Big Law, mounted this week, with additional associates announcing resignations at Kirkland & Ellis and a workers’ rights group claiming Skadden, Arps, Slate, Meagher & Flom unfairly limited employee discussions about it.”
• “Those moves came as more Democratic lawmakers sent another batch of letters requesting details about the deals and urging law firms to disavow them.”
• “At least three more lawyers on LinkedIn this week pointed to the deals with Trump as reason to move on from their firm. In separate posts, Harold Grigsby III, Kevin Decker and Maggie Hagen, all Washington, D.C. litigation associates at Kirkland, pointed to the firm’s commitment to provide pro bono and other legal services — while avoiding a Trump executive order — as the impetus for their resignations from the firm.”
• “‘To me, these actions set a troubling precedent,’ Hagen wrote. ‘When law firms yield to political pressure, it compromises the independence of our profession and threatens our ability to zealously advocate for our clients.'”
• “‘I am disappointed by the decision of the world’s most powerful and successful law firm not to fight back against this unlawful incursion, especially when other firms are already doing so successfully,’ Decker wrote, referring to Kirkland’s status as the highest-grossing revenue in the world.”
• “‘This is not neutrality, this is complicity. Complicity I can no longer be a part of,’ Grigsby stated.”
• “A spokesperson for Kirkland did not immediately comment on the announcements. Other firms, though, have also seen resignations for similar reasons after their deals with Trump were struck, including Paul, Weiss, Rifkind, Wharton & Garrison; Simpson, Thacher & Bartlett; Latham & Watkins, and Willkie, Farr & Gallagher.”
• “Despite law firms’ insistence that they will stick to pro bono categories of the deals, including work for veterans and combating anti-Semitism, Trump has openly suggested he will ask the firms to handle coal leasing matters and negotiate trade talks.”
• “Separately, the National Institute for Workers’ Rights on Thursday reportedly filed an unfair labor practice charge with the National Labor Relations Board against Skadden, Arps, Slate, Meagher & Flom. The group claimed the firm restricted access to email distribution lists where firm associates would discuss its agreement with the administration, express concerns about it, and submit resignations, among other things.”
• “‘Skadden interfered with these activities by restricting access to email distribution lists in order to suppress employee discussions about the firm’s policy changes,’ the labor group said.”

“Memphis Law Firm Leaves Tennessee Bar Association for Its Silence on Trump” —

• “A Memphis law firm left the Tennessee Bar Association (TBA) Tuesday after the firm said the group had ‘voted to remain silent’ on President Donald Trump’s actions to erode the rule of law and an independent judiciary.”
• “Donati Law ended more than 40 years of membership with TBA Tuesday in a letter made public on Facebook Wednesday. The Midtown law firm focuses on employment law, personal injury, and criminal defense, according to its website.”
• “‘It is with great sadness that we feel obligated to leave the TBA due to its refusal to take a stand consistent with the ideals of the Rule of Law and an independent judiciary in the face of extreme threats from the executive branch,’ reads the letter addressed to TBA leaders.”
• “The letter says, specifically, that the TBA ‘once again voted to remain silent’ on April 14. Details of the triggering event on this date were not immediately clear, but Donati attorney Bryce Ashby said it was related to activities from another Memphis attorney, Brian Faughnan, of Faughnan Law.”
• “One his blog, Faughnan on Ethics, Faughnan said many bar associations, like the American Bar Association, have spoken out against Trump actions that erode the rule of law. In an April 8th blog post, though, Faughnan said, ‘the Tennessee Bar Association and the Memphis Bar Association have not.'”
• “After private talks with the TBA, he said on April 16, he’d become ‘more and more convinced that the TBA is actually determined to remain silent in an unforgivable act of cowardice.'”
• “Finally, Donati said Trump has ordered retribution against law firms because of positions they have taken on behalf of clients or because of attorneys hired by their firms.”
• “‘These are but a few examples of the full-blown assault on the rule of law and the judiciary,’ reads the letter. ‘These actions damage our system of justice and must be condemned.”
• “‘Remaining silent is complicity. The TBA has stayed silent and once again voted to remain silent on April 14, despite the TBA’s self-professed role as a ‘strong advocate for the profession and the development and maintenance of our justice system.’ As a result, we can no longer continue our membership with the Tennessee Bar Association.'”

“Abbe Lowell Aids Letitia James After Winston & Strawn Exit” —

• “Abbe Lowell is defending New York Attorney General Letitia James against a Trump administration investigation after leaving Winston & Strawn, his firm of the past seven years.”
• “The firm declined to say when Lowell departed. He did not immediately respond to a request for comment.”
• “Big Law firms have been trying to create distance between themselves and matters deemed unpopular by Trump, and eight firms besides Paul Weiss struck deals with him. Banks declined to comment on whether his departure from Paul Weiss was tied to his desire to continue representing James.”
• “Lowell joined Winston & Strawn in 2018 from Norton Rose Fulbright. He was a co-chair of Winston’s white collar and regulatory and investigations practice group and through his career has had a deep bench of high-profile clients who fall on both sides of the political aisle.”
• “He represented President Donald Trump’s son-in-law and senior adviser Jared Kushner in the investigation of alleged Russian collusion during Trump’s 2016 presidential campaign. Lowell was also lead defense lawyer for former President Joe Biden’s son Hunter Biden in a 2024 criminal trial.”
• “Lowell sent a letter Thursday to US Attorney General Pam Bondi that responds to Federal Housing Finance Agency Director William Pulte’s April 14 criminal referral concerning James. The referral accuses James of falsifying property records for a home she owns in Virginia by saying it’s her primary residence and alleges she understated the number of rooms at her home in Brooklyn.”
• “‘No one is better than you to recognize that Attorney General James is being targeted’ for her work, Lowell told Bondi in the letter, obtained by Bloomberg Law. ‘Trump has singled out Attorney General James dating back to her campaign in 2018, and ever more so during and after the trial and verdict in New York.'”

“Solicitor suspended for not disclosing own-interest conflict” —

• “A law firm owner has been suspended for not disclosing conflicts of interest to clients, including that his wife was a director of the property development company they were buying from. This meant Waheed Ur Rehman Mian should not have acted for them, the Solicitors Disciplinary Tribunal (SDT) said.”
• “Clients lost money because the development failed and they have been reimbursed by Mr Mian’s insurers.”
• “Mr Mian, who qualified in 2003, was majority owner, compliance officer and principal solicitor of East London law firm M-R Solicitors, which between June 2017 and November 2019 acted for around 25 of 75 purchasers from two off-plan developments in Leicester that was meant to be built by Aronex Developments.”
• “There were several conflicts Mr Mian failed to disclose to clients, most notably that his wife was a director of Aronex.”
• “At the hearing, Mr Mian claimed he did not know this until summer 2019, and that his wife did not know M-R Solicitors was acting for purchasers.”
• “The SDT did not believe this, saying that up to this point in the proceedings, Mr Mian had stated that his wife was a silent director and shareholder and that the failure to advise clients of the conflict was an error and oversight caused by the strains of a busy practice.”
• “He had several opportunities to raise this defence before the hearing but had chosen not to do so.”
• “In any case, there were ‘other substantial links’ between the firm and Aronex which the SDT ‘did not consider to be merely coincidental'”
• “These included that the firm was the landlord of the leased premises occupied by Aronex and that two members of staff were also involved in the developments.”
• “‘Accordingly, the tribunal found on the balance of probabilities that [Mr Mian] either knew of the conflict, or as an experienced solicitor ought to have been aware. ‘In such circumstances, [he] must have known that such a conflict was a mandatory prohibition on the firm acting for these clients. The firm should never have taken them on.'”
• “The SDT found that his actions had lacked integrity, a charge Mr Mian had contested.”
• “Mr Mian admitted failing to adequately advise clients of the risks inherent in such investment schemes – in particular their deposit being at risk in the event the seller became insolvent – and to ensure clients were informed of the planning issues facing the developments (ancient artefacts had been found on the sites) prior to releasing their funds to Aronex.”
• “This called into question Mr Mian’s ‘continued ability… to practise appropriately’ but it decided that a six-month suspension would suffice. He was also ordered to pay costs of £40,000.”

“Here’s why a lawyer hired by the government can’t represent public employees in an auditor general investigation…” —

• “According to Alberta Premier Danielle Smith, her government was just trying to be helpful when it instructed thousands of public employees to refer calls from the auditor general about his ongoing investigation into allegations of dodgy health care contracts to a lawyer it had retained.”
• ‘The auditor general can ask any employee, former or current, any questions he likes as he is doing the investigation,’ Premier Smith assured the Alberta Legislature yesterday in response to a question from the NDP’s Christina Gray, who is Opposition leader as long as the government refuses to call a by-election in Edmonton-Strathcona that would give party Leader Naheed Nenshi a seat in the House.”
• “Sorry, but that dog won’t hunt. Responding to Ms. Smith, Ms. Gray wondered: ‘Does the premier understand how corrupt this looks?'”
• “Similarly, after the news broke on Thursday of the email sent to Alberta Health Services staff and employees of the provincial Health Department by a senior civil servant instructing them to redirect investigators ‘to our legal counsel,’ Health Minister Adriana LaGrange insisted, ‘this is not about impeding the investigation.'”
• “Ms. LaGrange also claimed that it is standard operating procedure for public employees in Alberta ‘either have legal counsel present, or ministry senior staff present when participating in interviews.’ Presumably she meant government counsel, not their own.”
• “Questions in the Legislature, of course, quickly turned this into a she said/she said dispute. So let’s look elsewhere to understand why the tales told by Ms. Smith and Ms. LaGrange are extremely unlikely. “Our text today comes from the Code of Conduct of the Law Society of Alberta, which states on page 31, ‘A lawyer must not act or continue to act for a client where there is a conflict of interest, except as permitted under this Code.'”
• “Indeed, the question of conflicts is so important, and there are so many situations in which conflicts could potentially arise, that the society’s Code of Conduct devotes 23 full pages to the topic, and at that I daresay that is not exhaustive.”
• “‘A conflict of interest exists when there is a substantial risk that a lawyer’s loyalty to or representation of a client would be materially and adversely affected by the lawyer’s own interest or the lawyer’s duties to another client, a former client, or a third person,’ the Code explains. ‘A substantial risk is one that is significant and, while not certain or probable, is more than a mere possibility. A client’s interests may be prejudiced unless the lawyer’s advice, judgment and action on the client’s behalf are free from conflicts of interest.'”
• “We non-lawyers need not plow through all the situations the document discusses to understand that if a lawyer has been engaged by the government of Alberta to represent its interests in an investigation of this type, it would be impossible in many situations that might arise for that lawyer to properly represent both the interests of his client, the government, and of the government’s employee.”
• “Put simply, Alberta Health (as the Health Department is confusingly known) is a legal entity that has different interests in the AG’s investigation than its employees do.”
• “For example, what if an employee, fearing retribution, asked for her identity to be protected because she has information about a dodgy contract? How can a lawyer representing the department, which is being sued for wrongful dismissal by a former CEO, represent the interests of both the employee and the employer? Common sense suggests the government’s lawyer simply cannot.

“Law Firms Balk at Trump Push for Client Data in DEI Probes” —

• “Large law firms plan to refuse to give the Trump administration information on their clients’ diversity initiatives as part of federal discrimination investigations. The 20 firms facing questions from the Equal Employment Opportunity Commission will reject the agency’s inquiries related to clients over confidentiality concerns, according to three people familiar with the matter. At least three firms—Kirkland & Ellis, Latham & Watkins, and Simpson Thacher & Bartlett—are also seeking to strike a deal with the White House that would resolve the probes.”
• “The EEOC wants the firms to name clients that require them to hit diversity targets for staffing on legal matters and to detail any incentives earned by meeting certain metrics. The agency in a batch of March 17 letters cited Microsoft Corp.’s diversity program for the tech company’s law firms as an example.”
• “‘It’s core to our profession to not disclose things about your clients or communications with your clients,’ said Joshua Roffman, a Washington lawyer who advises companies on diversity initiatives. ‘You don’t even want to open the door a little bit to that.'”
• “William Burck, a litigator at Quinn Emanuel who has emerged as a go-between for firms facing retribution from Trump, and Gibson Dunn lawyer Jason Schwartz are separately advising several of those hit with EEOC inquiries. Allan Bloom, the co-chair of Proskauer’s labor and employment group, and Washington attorney David Fortney are also advising some of the firms.”
• “Those on the EEOC list determined that ignoring the letters or refusing to turn over any information could get them more unwanted attention from the administration, according to the people.”
• “The EEOC investigations are part of the administration’s attack on the legal industry. The White House has issued executive orders targeting firms and extracted deals from others for $340 million in services for Trump-aligned causes. Those directives and agreements have ensnared nine law firms so far.”
• “The EEOC typically polices workplace discrimination by investigating charges filed by workers against their employers. The agency’s commissioners can self-initiate charges to launch investigations, but those charges usually are not made public.”
• “Microsoft has one of the longest-running diversity programs for outside lawyers advising the tech company, dating back to 2008. The company expanded the program in 2020 ‘to address acute representation issues in African American/Black and Hispanic/Latinx communities,’ according to its website. The program encourages firms to hit certain metrics for diversity—including race, sex, and sexual orientation—on legal teams staffing Microsoft matters, as well as firmwide goals for increasing diversity among partners and in leadership roles.”
• “Amazon, HP Inc., Facebook parent Meta Platforms Inc., Nike Inc., AbbVie Inc., and Starbucks Corp. are among other companies that have imposed diversity standards for outside counsel.”
• “The moves were part of an effort to spur change at top firms competing for work, but they drew rebukes from critics who called the programs thinly-veiled ‘quotas’ that violate longstanding federal anti-discrimination laws. The Supreme Court’s 2023 decision restricting the use of race in college admissions increased scrutiny of a wide range of diversity hiring programs across industries.”

“‘Treated like a criminal’: US citizen says he was detained returning from Canada” —

• “A New Hampshire real estate attorney and American citizen returning home from Canada says he was detained at the border without an explanation. Bachir Atallah and his wife, Jessica Fakhri, were traveling back from a quick family trip Sunday when they say U.S. Customs and Border Protection stopped them when reentering the country in Vermont.”
• “‘I literally drove my car to Canada for the weekend, and on the way back, I was treated like a criminal,’ said Atallah, who has been a U.S. citizen for 10 years.”
  “An official for U.S. Customs and Border Patrol on Tuesday called Atallah’s account ‘blatantly false and sensationalized.’ Read the full statement below.”
• “‘They handcuffed me, they twisted my arm, my wrist,’ he said. ‘They walked me inside, and I was looking at my wife in the car.'”
• “Atallah says CBP agents requested to look into his email on his phone, which he refused because of attorney client privilege.”
• “‘So I had to, under duress, give him permission to look through my email, through my priveleged information, and he made me write a statement, signed by me, saying that I gave him permission to look through the email,’ Atallah said.”
• “After nearly five hours, Bachir Atallah says he and his wife were released. They are now pursuing legal action.”
• “Atallah is planning to leave for Lebanon in a few days, and he is not sure what will happen when he tries to return.”
• “Customs and Border Protection responded to a request for comment on Tuesday, with Assistant Commissioner Hilton Beckham sharing this statement:”
  • “The traveler’s accusations are blatantly false and sensationalized. CBP officers acted in accordance with established protocols. Upon arrival at the port of entry, the traveler was appropriately referred to secondary inspection — a routine, lawful process that occurs daily, and can apply for any traveler. Officers worked to ensure an attorney-client privilege was respected during the electronic media search. The traveler provided written consent to a limited search of his electronic device.'”

Hat tip to Mike Guernon who flagged this one for me (and is set to speak on the OCG panel): “California State Bar 28th Annual Statewide Ethics Symposium” —

NOTES:

• Looks like online registration is free (for the first 3000) but the deadline for that is April 23. So don’t dawdle…
• They’re offering 5 hours of participatory MCLE credit for you risk lawyers in the reader ranks…

AGENDA:

• 9:30 a.m.–9:45 a.m. Welcoming Remarks
• 9:45 a.m.–11:00 a.m. Recent Developments in Legal Ethics and Professional Conduct—What You Need to Know
  • This panel will discuss important developments in legal ethics, centering on recent and developing advisory ethics opinions prepared by COPRAC and other professional conduct developments. Topics will include COPRAC’s recent succession planning opinion and interim opinion concerning flat fees; recent developments in multijurisdictional and remote practices; and attorney wellness and mental health.
• 11:10 a.m.–12:25 p.m. Ethical Considerations of Artificial Intelligence in the Practice of Law
  • The panel will discuss current legal artificial intelligence (AI) use cases, emerging issues, pitfalls, and opportunities. We will explore risk mitigation and the increasing emphasis on the role of bias and cybersecurity.
• 12:25 p.m.–1:30 p.m. Lunch
• 1:30 p.m.–2:45 p.m. Blazing a New Trail in the Wild West of Outside Counsel Guidelines
  • This panel will address the evolving landscape of Outside Counsel Guidelines (OCGs) and their intersection with professional reasonability. Topics include: conflicts between OCG requirements and ethical obligations; compliance challenges with billing restrictions and staffing mandates; data security and confidentiality requirements; implementation of diversity directives; and development of internal compliance systems. The discussion will provide practical guidance for both law firm attorneys and in-house counsel on managing client-tendered terms of engagement while maintaining professional independence and ethical compliance.
• 2:55 p.m.–4:10 p.m. Securing the Bench: Protecting Judges Amid Escalating Threats
• This panel will focus on:
  • Types of Threats: An overview of the spectrum of threats—from physical intimidation and targeted harassment to cyberattacks and doxxing—affecting judges today.
  • Legal and Policy Frameworks: A review of current laws, including the First Amendment and the Rules of Professional Conduct, and proposals for strengthening legal protections for judges, including legislative reforms and policy recommendations.
  • Best Practices for Lawyers: What are the limits of zealous representation in the courtroom, in briefing, and in the public arena? When and how does free speech backfire?
  • What are Judges Doing to Protect Themselves? Best practices for personal and institutional risk assessments, including how judges can identify warning signs and work with security professionals; cybersecurity and interagency collaboration.
  • International Perspectives: Insights into how other jurisdictions address judicial safety, offering potential models for reform and improved practices.

For more information and to register, see their website.

Brad Wendel, professor at Cornell Law School, puslihed:”Conflicts for Quislings” —

• “The firms that have caved rather than challenge the egregiously unconstitutional executive orders issued by the Trump Administration have all agreed to provide tens of millions of dollars of pro bono assistance.”
• “Trump has recently suggested that he will use the firms’ pro bono services to help negotiate trade deals with countries subject to his tariffs. in a Truth Social post he described ‘build[ing] an unrivaled network of Lawyers, who will put a stop to Partisan Lawfare in American, and retore Liberty and Justice FOR ALL.’ He announced at a Cabinet meeting:”
  • ‘We have a lot of law firms that have paid me a lot of money in the form of legal fees. We’re going to probably use those firms … if we can – I think we can,’ Trump said during a meeting of his cabinet at the White House. ‘I think we’re going to try to use these very prestigious firms to help us out with the trade.’
• “How the Deals with Trump Create Conflicts of Interest. To set the stage, consider a recent event that may seem unrelated to law firm conflicts but is actually the heart of the matter (h/t Serious Trouble).”
• “A couple of weeks ago, Adam Schleifer, an Assistant United States Attorney in Los Angeles, was notified that he had been terminated at the instructions of Donald Trump. The L.A. Times reported that the termination came via a one-line email from a White House staff account. Needless to say, this is very much not the way terminations of federal prosecutors are normally handled. AUSA’s have civil service protection, and ordinarily any disciplinary action against them would go through chain of command in the Justice Department.”
• “So what happened? Schleifer was in charge of the prosecution of fast food executive Andrew Wiederhorn on federal tax-evasion charges, arising out of allegations that he had used corporate funds as a piggy bank to fund his personal expenses, including private jet travel, fancy vacations, and a Rolls-Royce. The L.A. Times reports that his defense team had ‘aggressively pushed Justice Department officials to drop the case.’ Reading between the lines, it is a plausible inference that Wiederhorn was a buddy of Trump, a donor to his campaign, or personally or financially close to a Trump supporter. Here’s the bottom line from the point of view of independence of the legal profession and the rule of law:”
  • ‘[A] former prosecutor who handled fraud cases in the U.S. attorney’s office and sought anonymity over concerns about facing professional backlash, said he believes Schleifer’s firing is ‘going to have an incredible chilling effect on any line federal prosecutor who is thinking about criminally investigating or prosecuting an executive of any company of any significance.’
  • ‘The message from Adam’s case is that if you’re going to indict some run-of-the-mill CEO of a company, you need to check if he’s a Trump supporter first,’ the former prosecutor said. ‘It’s going to cause line prosecutors to be considerably more careful about pursuing anyone who has even tenuous connections to the president, which is not good for the DOJ.’
• “In a Substack post, a partner at Jenner & Block, which is one of the firms suing over the unconstitutional EOs, explained why becoming part of Trump’s ‘unrivaled network of Lawyers’ can create conflicts of interest for the firms:”
  • ‘[I]f a law firm enters into this type of non-deal, I don’t understand how it can ever represent clients in any case that involves the government. Every time its lawyers file a brief, they will think: ‘On the one hand, I have to represent my client zealously, but on the other hand, I have to make sure not to undo the deal.’
  • ‘The firm might pretend it is defending its clients zealously. It might file legal briefs making all manner of legal arguments. But what if a lawyer uncovered information that made the government look bad? There would be massive pressure on the lawyer to look the other way. Maybe the lawyer would try to offer some explanation to his client as to why it’s strategically best to set the issue aside. But there would always be a question mark in the client’s head: ‘is my lawyer saying this because he believes it, or is the lawyer saying this because he’s trying to preserve his law firm’s settlement with the government?’
• “I think this is exactly right. However, the example of Adam Schleifer shows that the concern does not arise only in litigation against the government. A firm may also have to be careful not to anger an ally of Trump or one of his associates like Elon Musk or a contributor to Trump’s campaign or someone with whom he is in a financial relationship (like a shady cryptocurrency promoter). Doing so could lead to professional consequences like being fired as an AUSA or, in the case of a law firm, being deemed out of compliance with the terms of an agreement with the administration.”
• “But it’s even worse. Firms may have to worry not only about representing clients in litigation in ways that potentially make Trump or his supporters look bad. They also have to worry about transactional representation, like merger deals, in which government approval is a condition of the transaction closing.”
• “Imagine a big law firm that is working on a lot of transactional work for a number of clients across a wide range of regulated industries. Some of the matters may be M&A transactions, or they could be routine deals that require federal agency approvals, permits, licenses, or whatever. The CBS/Paramount/Skydance deal shows that this administration has no compunction at all about threatening to withhold agency approval if one of the parties does not fall into line with what Karoline Leavitt referred to as the ‘America first agenda.’ Client A needs approval from the FTC, FCC, or some other agency so that a merger can go through. Client B is litigating against a different government agency or even just a company controlled by a guy who gets Trump’s ear at Mar-a-Lago. The word comes down that Client A’s approval won’t come through unless Client B drops the case. That’s a really nasty conflict of interest, and it is entirely foreseeable given this administration’s personalized, friends-or-enemies approach to thinking about government interests.”
• “If you have any doubt that ‘America first agenda’ is just another way of referring to the full MAGA project, look at the EO that was entered against Susman Godfrey (which the firm, to no one’s surprise, is fighting). The EO claims that the firm is acting in a way that is ‘detrimental to critical American interests’ because ‘Susman spearheads efforts to weaponize the American legal system and degrade the quality of American elections.’ What was that effort that weaponized the American legal system and degraded the quality of American elections? Maybe delivering a good old-fashioned ass-kicking to Fox News in a defamation action brought by Dominion Voting Systems? Fox, of course, had eagerly promoted the false narrative pushed by Trump of widespread fraud in the 2020 presidential election. Any deviation from that narrative must be severely punished as anti-American. Do you think any law firm that has cut a deal with Trump, with the proverbial sword of Damocles of these EOs, could possibly represent a client like Dominion in a matter that might arose Trump’s ire?”
  A Brief Brush-Up on Conflicts of Interest”
• “This is a liability and risk-management concern for these firms, not merely a matter of client relations or a so-called ‘business conflict.’ Every U.S. jurisdiction has a conflict of interest rule based on ABA Model Rule 1.7. Some states employ varying language, like New York’s ‘differing interests’ standard, but the substantive standard is the same. Here’s Model Rule 1.7(a)(2):”
  • ‘A concurrent conflict of interest exists if . . . there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.’
• “The conflicts of one lawyer in the firm are imputed to all lawyers in the firm, under Rule 1.10(a), so if the firm is part of Trump’s network of lawyers, a lawyer doing administration-approved pro bono work has responsibilities to that client that may materially limit the representation of other firm clients, even if represented by a completely different team of lawyers, even in a different office of the firm.”
  “The key to understanding material-limitation conflicts is the concept of independent professional judgment. A lawyer must always be free to advise a client on a course of action, or take measures in the course of representing the client, that are based solely on the lawyer’s reasonable assessment of what is in the client’s best interests. This is an implication of the highly fiduciary duty of loyalty that characterizes the lawyer-client relationship. Comment [8] to Rule 1.7 explains:”
  • ‘[A] conflict of interest exists if there is a significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities or interests. . . . The conflict in effect forecloses alternatives that would otherwise be available to the client. The mere possibility of subsequent harm does not itself require disclosure and consent. The critical questions are the likelihood that a difference in interests will eventuate and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client.’
• “Something lawyers sometimes forget is that a conflict of interest exists, by definition, if there is a significant risk of this type of interference with independent professional judgment.”
• “So, to all you conflicts partners at the firms who have entered into deals with the White House . . . are you ready for this? Have you looked at all of your firm’s litigated matters to see if any of the adverse parties are buddies with Trump? Or whether they represent interests that are more aligned with the ‘America first agenda’ than your clients? Have you reviewed pending transactional matters to see if agency approval is required to serve the interests of Client A? If so, have you thought about whether something Client B has done may have pissed off Trump? Have you considered the concessions that will be demanded from Client B in order to keep the matter for Client A running smoothly?”
• “Most conflicts are waivable, provided that all affected parties give informed consent, which is defined by Model Rule 1.0(e) as ‘the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.’ But that ‘adequate information and explanation’ standard is very demanding in practice. In order to get Client A’s informed consent to the representation, in light of the risk that Trump may be pissed off by something you did in the course of representing Client B, you need to provide full disclosure. And that may require revealing information pertaining to Client B that you are duty-bound to keep confidential. (One of my favorite teaching cases on conflicts involves incompatible duties of communication and confidentiality.) While these firms so far are being tight-lipped about the terms of their agreements with the administration, it won’t be long before clients will start demanding to see them, and for good reason. If a firm cannot reveal information of one firm client to another, then the conflict becomes practically non-waivable, even if it might have been theoretically waivable. In that case, proceeding in the face of the un-waived conflict will be a breach of duty to all affected clients.”
• “Then there’s the more general, less client-specific risk associated with the provision of the firm’s promised $40-125 million worth of legal services to the administration, in negotiating coal mining leases or whatever. In normal circumstances a firm would be able to say no to a client’s request to provide legal services in connection with a matter. A firm subject to one of these agreements, however, might reasonably believe it has no option to decline to provide some work in furtherance of the ‘America first agenda.’ The firm may also not be permitted to exercise its usual independent judgment in deciding what other pro bono matters to take. It’s not at all farfetched to think that somewhere in White House counsel’s office there are some lawyers tasked with monitoring these firms work toward their commitment of providing free legal services to the administration. If lawyers have always hated oversight by liability insurers, wait until they experience the supervision of political commissars who will be looking for evidence of ideological non-conformity. I believe some of the lawyers in these firms think they will be able to continue to run their pro bono programs in the way they have always done so, but again taking Trump literally as well as seriously, I expect they’re going to find out that he really does think of them as ‘his’ law firms, to be ordered around and punished severely for non-compliance.”
• “Getting this wrong risks not only professional discipline but lawsuits from affected clients for negligence or breach of fiduciary duty. This is bread-and-butter work for those of us who do expert witness work in the professional responsibility area. Big-firm conflicts checking procedures are sophisticated, but it can be extremely difficult to pick up material limitation conflicts, given the many ways in which, per Comment [8], the ‘lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities or interests.’ The assessment of material limitation is not just something that happens at the outset of the representation but must be reevaluated over the course of the representation as positions and interests potentially re-align. A job that has always been extremely difficult just became much more so.”
• Worth reading his entire piece for even more detail and commentary.

David Kluft, Assistant Bar Counsel at Massachusetts Office of Bar Counsel, notes: “Tidbit: Can I represent both the litigant and the third party paying for the litigation?” —

• “Two individual defendants assigned an allergy skin test patent to a company, and the company agreed to indemnify them against lawsuits by the alleged inventor. The inventor sued the individuals (not the company), and the company paid for defense counsel.”
• “The Court disqualified defense counsel for violation of 1.8(f) (conflicts of interest created by third party payor), because the same lawyers also had attorney client relationships with the company; because there was some evidence the third party was directing the litigation; because the conflict waivers had been inadequate; and because the indemnity agreement had a cap which would allow the company to stop paying, which did not satisfy the conditions for third party payors under NJ law.”

“Top New York Judge’s Son, and His Boss, At Center of Ethics Dispute” —

• ” A top judge failed to disclose that his key legal advisor was romantically involved with an attorney arguing cases in his courtroom. The apparent conflict of interest extends to the highest levels of New York’s court system, as the law clerk’s father is the state’s chief administrative judge — who recently gave appointments to both the judge (his son’s boss) and the attorney (his son’s girlfriend).”
• “The case is the latest example of alleged favoritism in New York’s courts, particularly in Surrogate’s Courts that handle inheritance disputes worth millions of dollars.”
• “The young man had a key to unlock the suburban Nassau County home. That much was clear to the private investigator watching outside. The key soon unlocked something else: a secret. It was exactly the kind of evidence the investigator’s client, Shannon Hynes, was looking for.”
• “Hynes felt something was amiss in Queens Surrogate’s Court, where she was locked in an inheritance dispute with her brother. The judge overseeing her case kept taking actions that Shannon — a seasoned trial lawyer by trade — considered unusual. So she hired the investigator, who that day discovered the ‘smoking gun.'”
• “The young man with the key was Zachary Zayas, principal law clerk to Judge Peter Kelly — the same judge overseeing Shannon’s case. And the key opened a house owned by Cheryl Katz — the attorney representing Shannon’s brother in the inheritance dispute.”
• “Katz and Zayas were dating and living together. Neither the judge, nor the law clerk, nor the attorney disclosed this to Shannon.”
• “Kelly, who’d run the court for 14 years, had known for at least five months that his law clerk was dating Katz, according to comments Kelly made last year. And during that time, he issued several rulings favoring Katz’s client, while keeping Shannon in the dark about the relationship.”
• “This was a clear violation of ethics rules governing state attorneys and judges, according to Cynthia Godsoe, a professor at Brooklyn Law School who specializes in both family law and professional ethics.”
• “‘There absolutely should have been disclosure by Katz and the judge,’ Godsoe said. ‘It couldn’t be clearer. I’m just sort of astonished.'”

“Paul Weiss Pro Bono Leader Would Rather Quit His Job Than Do Work For Trump” —

• “‘This has been weighing on me since the November election. At this historical moment, I know that I belong back on the front lines fighting for the things that I have believed in since I first walked in the door of The Legal Aid Society as a staff attorney in 1981.'”
• “— Steven Banks, special counsel at Paul Weiss, in a statement noted by the New York Times, concerning his decision to leave the firm in the wake of its $40 million pro bono payola deal with Donald Trump to do away with an executive order.”
• “Banks, 68, who leads the Paul Weiss pro bono practice, told Reuters that he felt his ‘time to make a difference as a lawyer is narrowing.’ Moving forward, he will representing the Coalition for the Homeless with the Legal Aid Society, where he worked for three decades before joining Paul Weiss. A spokesperson for the firm thanked Banks for his years of service, noting, ‘We remain committed to providing impactful pro bono legal assistance to individuals and organizations in need.'”

“Lawlessness and Trump’s lawyers” —

• “President Donald Trump has sought retribution against law firms that previously opposed him or represented the Democratic National Committee. He has called for the impeachment of federal judges who issued orders against him, labeling one of them a ‘radical left judge’ and a ‘lunatic.’ He has commenced an investigation into law firms that engage in diversity, equity and inclusion initiatives.”
• “Trump has not acted alone in any of these extraordinary endeavors; in each instance, he has been enabled by federal lawyers working as White House counsel, in the Department of Justice, at the Department of Homeland Security, or at the Equal Employment Opportunity Commission.”
• “Even nonpartisans among us should perceive Trump’s statements and actions as a serious threat to the role of lawyers in the United States. Robust advocacy allows judges and juries to make informed decisions based on a fully developed factual record.”
• “The current spate of government lawyers who counsel Trump would be wise to take note of the fates of those lawyers who advised him during his first administration. Rudolph Giuliani was disbarred for filing frivolous legal complaints alleging fraud in the 2020 election. John Eastman was disbarred for assisting Trump with the fraudulent elector scheme.”
• “Trump does not hold a law license, nor does he seem to care about the fate of his advisors who do. But Trump’s lawyers should care deeply. Federal government attorneys hold their law licenses at the state level, and they can be disciplined by that state even if their conduct occurs out of state.”
• “If federal lawyers perceive their ‘client’ as the president — a proposition that might fairly be questioned even by those who believe in the theory of a unitary executive — they still owe duties to the court system, to their adversary, and to the public. Under attorney rules of professional conduct, sometimes those duties take precedence over duties to a client.”

“‘Pray I Don’t Alter It Any Further’: What Darth Vader Should Teach Law Firms About Settling With Trump” —

• “‘I’ve just made a deal that’ll keep the Empire out of here forever,’ Lando Calrissian explained in The Empire Strikes Back. We soon realize his deal involved allowing Darth Vader to ensnare the Han and Leia as bait to lure Luke Skywalker. Once Vader had Luke, everyone could go their separate ways. Then Vader decided to hand Han Solo to Boba Fett and require Leia and Chewbacca to remain under arrest in Cloud City, while Lando grumbled, ‘This deal is getting worse all the time!’ A few beats later, Vader he’d put Han on ice and ordered Leia and Chewy taken to his ship.”
• “‘You said they’d be left at the city under my supervision!’ Lando exclaimed.”
• “Sorry for the spoilers on a 45-year-old movie. With that, every Gen Xer and elder Millennial Star Wars fan learned that if you make a deal under duress with a retaliatory government official to save your business, you are a hopeless chump and will get systematically rolled. It was a raw demonstration of what happens when you negotiate with someone who doesn’t believe in the concept of negotiation.”
• “Biglaw firms striking deals with the Trump administration to — theoretically — ‘protect’ their firm or their clients from government interference, missed this lesson. These firms — Paul Weiss, Willkie, Skadden, Milbank (and potentially more to come) — now enter their Lando Era, watching the administration heap daily humiliation upon them while continually altering the deal to the firms’ detriment.”
• “But the important thing each of these firms want you to know is that this was a professional deal among very serious people conducted at a very serious boardroom table and not, in fact, the legal equivalent of getting choked out mid-sentence. And that it’s patently unfair that radical agitators — like, well, Above the Law — characterize these deals as ‘surrender’ or ‘bending the knee.’ No one seriously involved in these deals would say something like that!”
• “No matter how much these firms want to posture as though they made narrowly tailored, professionally negotiated agreements, the counterparty is using mainstream media time to dunk on them about how they renamed all the managing partners Reek and keep them locked in the White House basement.”
• “If the administration had only set fire to the crucially important ‘we’re innocent… this was just to avoid a distraction for our clients’ claim it would be bad enough. But now he’s moving Leia to his ship.”
• “In defending their deals, the firms have nurtured a press narrative that really all they committed to do is perform a lot of pro bono work for veterans — something that appeals to conservatives and liberals alike — in order to claim that this deal isn’t all that radical.”
• “Trump: ‘We have plenty of law firms. These are great law firms that we signed with. And I think part of the way I’ll spend of the money we’re getting from the law firms in terms of their legal time will be using these great law firms to represent us with regard to the many… “
• “‘Part of the way I’ll spend some of the money we’re getting from the law firms….’ That doesn’t sound like the firms are going to just do $100 million in veteran health claims.”
• “So far the law firms aren’t acknowledging these alterations to the deal. But the White House remains very clear:”
• “Trump says he will assign the law firms which cut deals with him to coal regulation cases. We asked the firms. None responded. But the White House did… ‘[Trump] looks forward to putting their pro bono legal concessions toward implementing his America First agenda’…”
• “And what are the firms gonna do about it? Other than privately mumble that ‘This deal is getting worse all the time!’ they’re going to go along with it because they’re already pot committed at this point. Reversing course now doesn’t get them anything but an even harsher executive order that they’ve already told the whole market they don’t have the courage to fight.”
• “These firms thought they were buying peace. What they bought was a public admission that they could be shaken down. And at every stage from here on, the terms will change. Because bullies don’t honor deals. They escalate. You give them access to a tibanna gas mine, and next thing you know, they’re freezing your friends in carbonite and conscripting you as the shadow Justice Department.”
• “The deal was always going to end like this. From the first deal, we’ve been saying it would end like this. Because we watched Empire Strikes Back and as a kindergartner we understood what happens if you’re stupid enough to make a deal like this.”
• “Now all those firms have left is to pray Trump doesn’t alter it any further.”
• “Another spoiler for you: he will.”

“Five Top Biglaw Firms Pledge Their Allegiance To Trump, Promising To Provide Legal Services ‘Beyond’ His Time In The White House” —

• “We now know that Kirkland & Ellis, Latham & Watkins, A&O Shearman, Simpson Thacher, and Cadwalader have all inked deals with Trump — and they’re far worse than the already bad deals other Biglaw firms like Skadden, Milbank, Willkie, and Paul Weiss got.”
• “Kirkland, Latham, Simpson, and A&O Shearman were among the Biglaw firms threatened with EEOC investigations concerning their DEI practices; with their pro bono payola deals, those menacing EEOC claims have now disappeared. The American Lawyer has the details on those poorly negotiated agreements.”

Interesting to see law firms commenting publicly on their peers’ activity. Here’s some of that.

Tony Schoenberg, Partner at Farella Braun & Martel LLP, wrote:

• “Another day, another BigLaw firm (or five) shows us what cowardice looks like. Meanwhile, over here we were busy filing the attached amicus brief on behalf of 253 members of Congress in support of two high ranking federal officials who were illegally fired by President Trump. I’m proud to work at a firm that is unequivocal about its commitment to the rule of law and the Constitution.”

Laura Belmont, General Counsel at Civis Analytics, wrote:

• “When I joined Latham & Watkins’ summer associate class in 2008, I didn’t know much about Big Law. What stood out to me about Latham? Pro bono hours counted toward billables.”
• “While at Latham, I worked pro bono with the Washington Lawyers’ Committee for Civil Rights and Urban Affairs on some of the most meaningful cases of my career. After two years, we secured a settlement affirming the right of a Muslim client in federal prison to observe his daily prayers. We brought a class action against the BOP challenging conditions where men with serious mental illness were cut off from medication, denied counseling, locked in cells 24 hours a day, and handed crossword puzzles instead.”
• “Now, reports suggest Latham may preemptively cut a deal with the Administration and offer a staggering $100M in “pro bono” services in areas of the Administration’s liking, including mining, tariffs, and border control.”
• “To Latham attorneys: I hope that you continue to have the privilege of doing the work that matters. If you need an ear, feel free to message me.”

“Simpson Thacher Lawyer Quits as Firm ‘Capitulates’ to Trump” —

• “Siunik Moradian fired off an email to colleagues on Friday, resigning moments after the firm announced the agreement. Simpson Thacher, along with several others, pledged pro bono or free legal services for Trump-aligned causes.”
• “‘By capitulating today, Simpson Thacher joins several other historic, powerful, influential and well-resourced law firms in bending the knee and kissing the ring of authoritarianism,’ Moradian said in the email, viewed by Bloomberg Law.”
• “‘Simpson Thacher’s decision today fundamentally changes ‘who we are as a Firm,’ Moradian said, referencing an internal email sent by Simpson Thacher chair Alden Millard. ‘I make a different choice. I will not sleepwalk toward authoritarianism,’ Moradian.”

Above the Law writes: “Skadden Posts Dream Job For Anyone Who Hates Themselves” —

• “Would you like to defend the indefensible? Biglaw has a job for you!”
• “A week after folding to the Trump administration’s demands like a damp cocktail napkin, Skadden posted a job that perfectly captures this moment in the life of a law firm flinging its reputation over a cliff:”
• “Finally, a career opportunity for the rare communications professional who wakes up each morning craving existential despair.”
  The job, listed on LinkedIn (hat tip to Daniel Barnes who posted it on Twitter), is exactly what you’d expect: coordinate ‘various public relations initiatives, monitors media for trends and topics of interest, identifies publishing opportunities for attorney-authored articles and client alerts, and searches for and circulates practice-specific media coverage.’ This listing is focused on the regulatory practice and the DC office, but since those are key areas likely to get repeatedly kicked in the face by the firm’s new liege, this won’t be any fun.”
• “The firm made a deal last week under the pretense of ‘supporting veterans,’ but — as we’ve seen play out in real time — Trump immediately interpreted this as blanket approval to draft Biglaw attorneys into his latest fever dream policies. From tariffs to coal to probably helping the IRS sue Sesame Street for ideological noncompliance, Skadden’s time is now fair game for the administration.”
• “So if you’re a seasoned PR expert who thrives in high-stakes environments, or just someone ready to go full Joker, Skadden’s got the gig for you.”
• “Honestly, $135K seems a little low for this job. Does it include hazard pay? Or a therapist on retainer? Because it probably should.”

“Federal Judge Rejects DQ Motion Against State’s Connell Foley Attorneys” —

• “A federal judge has rejected a motion to remove Connell Foley as legal counsel for several state officials, like New Jersey Gov. Phil Murphy and Attorney General Matthew Platkin, in a lawsuit alleging discrimination and racketeering.”
• “At the center of the dispute was Blueprint Capital Advisors’ (BCA) claim that a partner at Connell Foley, who currently represents the defendants, previously provided legal advice to a company principal, creating a conflict of interest. Connell Foley countered that it had proactively screened the attorney from the case out of an abundance of caution.”
• “However, U.S. Magistrate Judge Michael A. Hammer of the District of New Jersey firmly rejected BCA’s argument in an opinion issued Monday. Hammer held that the evidence offered by BCA amounted to ‘vague assertions’ and a ‘spattering of conversations’ that didn’t meet the legal standard for disqualification.”
• “‘BCA has not established an express attorney-client relationship,’ Hammer said. ‘BCA appears to concede as much, and focuses on the existence of an implied relationship.'”
• “In June 2020, BCA, a Black-owned asset management firm, filed a lawsuit in the U.S. District Court for the District of New Jersey against top state officials and others, alleging systemic racial discrimination and retaliation. The firm claims that New Jersey and its Division of Investment excluded it from managing state funds, misused its proprietary investment model, and collaborated with private entities to undermine its business prospects. The case is captioned Blueprint Capital Advisors v. State of New Jersey.”
• “‘At the core of this motion is whether Elnardo J. Webster II, who is now an attorney at Connell Foley, previously represented BCA or one of its principals, Jacob Walthour,’ Hammer said.”
• “‘Walthour claims that in 2016, Webster helped facilitate meetings with state officials, advised on strategic decisions, and provided legal counsel as BCA considered legal action against the state,’ Hammer said. ‘Webster, however, insists that he never gave legal advice, characterizing their conversation as a casual exchange in which Walthour asked if he knew anyone with political connections.'”
• “Walthour described past interactions, including emails and meetings going back to 2016, in which he allegedly sought legal advice from Webster.”
• “The court found that none of these contacts rose to the level of formal or implied legal representation. Notably, Hammer said, the only recorded phone call between the two that lasted longer than a minute occurred four years before the lawsuit was filed. Hammer also noted that Webster is primarily a real estate lawyer with limited litigation experience, making it unlikely he would be consulted for complex civil rights and securities claims in the present case.”

“Ninth Circuit Finds Pollution Exclusion Creates Conflict Requiring Independent Counsel” —

• “In L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., the Ninth Circuit, applying California law, affirmed in part the trial court’s grant of a policyholder’s motion for summary judgment on the duty to defend and obligation to provide independent counsel under a pollution exclusion. L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., No. 23-55483, 2025 WL 1024392, at *2 (9th Cir. Apr. 7, 2025).”
• “The insureds were sued for alleged environmental contamination from the operation of a marine terminal and chemical storage facility. The claimants alleged that hazardous materials leaked from storage tanks over a fifty-year period, and the insureds were negligent in storing the hazardous substances. The underlying complaint alleged that the contamination occurred ‘suddenly and accidentally, and over long periods of time.'”
• “The policyholders sought to access their CGL policies from 1982 through 1985, and the insurer issued a reservation of rights under Qualified Pollution Exclusions. The pollution exclusions included a sudden and accidental exception. The insured retained its preferred counsel to defend the underlying lawsuit, and the insurer refused to pay for the insureds’ choice of counsel. Instead, the insurer offered to appoint defense counsel.”
  “The Ninth Circuit’s opinion focuses on two major issues. First, as a threshold matter, whether the insurer had a duty to defend under the pollution exclusion. The court reasoned that the insured bore the burden to prove that the sudden and accidental exception to the pollution exclusion applied. The court noted that in California, ‘sudden refers to the pollution’s commencement and does not require that the polluting event terminate quickly or have only a brief duration[.]’ Id. at *1. The court found that the alleged contamination, which occurred over 50 years ago, could have been ‘sudden’ within the sudden and accidental exception to the pollution exclusion.”
• “Second, the court examined whether the pollution exclusion created a conflict of interest that required independent counsel for the insured. The court noted that ‘[a]lthough an insurer does not necessarily create a conflict merely by defending two parties seeking damages from each other in the same lawsuit, a conflict does exist where the insurer may be subject to substantial temptation to shape its defense to place the risk of loss entirely upon the insured, and independent counsel is necessary in those instances to protect the insured’s interests.’ Id. at *2. The court found a conflict of interest that necessitated independent counsel because ‘[t]he reservation of rights gave [the insurer] both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution.’ Id.”
• “The sudden and accidental exception is common to pollution exclusions. Policyholders should be familiar with the law applicable to their insurance policy and the arguments they can raise. Every state is different and requires a different analysis.”
  Policyholders often want to choose their own counsel, but insurers can be resistant to pay. Unsurprisingly, the policyholder’s choice of counsel is normally more expensive than the carrier’s choice. The creation of a conflict of interest through a reservation of rights is the first place to start when arguing that an insurer should pay for independent counsel. The arguments that the insurer should pay the full rate should focus more on the skill of the policyholder’s choice of defense counsel and desire to protect the insured’s tower. It can also be helpful to combine multiple insurers who are obligated to provide a defense to ‘add up’ to the rate of the policyholder’s choice of counsel.”
• “The reservation of rights gave United both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution. Strategizing in defending the case this way ‘would be to the financial advantage of’ United, creating a conflict and giving rise to a duty on United’s part to provide independent counsel.”

“Willkie Loses Longest-Serving Lawyer Over Trump Surrender” —

• ‘”Joseph Baio worked at Willkie Farr for 47 years. As a partner, he’d served on the firm’s executive committee. Most recently, the dean of the firm’s lawyers worked as a senior counsel. It takes a lot to make someone leave the firm they’ve worked with — and at times helped lead — for almost half a century. But Willkie Farr managed to find a way to alienate its longest-serving attorney when it turned coward and agreed to give Trump $100 million in pro bono legal services and somehow even more in dignity.”
• “Baio informed the current executive committee that he was leaving to ‘join the fight against governmental tyranny, unconstitutional decrees and social injustice, particularly at this critical time,’ a statement that deserves a swelling orchestral accompaniment befitting the end of a courtroom drama. It’s also a succinct acknowledgement of a lawyer’s ethical responsibilities that seems lost on some Biglaw firms right now.”
• “While a number of associates have publicly broke ties over the settlements and some law students are already telling firms in the ‘Order of the Obsequious’ that they are turning their backs on recruiting efforts, Baio is the most senior lawyer to depart a firm over a settlement. He is unlikely to be the last.”
• “Baio’s position as counsel affords him more flexibility than many partners, who cannot bolt on a dime and have to negotiate smooth transitions for their books of business at other firms. But Above the Law is already aware of corporate clients informing surrendering firms that they will take their business elsewhere in light of the concessions, seeing the deals as confirmation that the firms are incapable of standing up for themselves let alone their clients. When clients start threatening to walk in search of firms with backbone — or at least no drama — the partners will start trying to figure out how to move with them.”

“Silvergate Bankruptcy Probe Tainted by Conflicts, Examiner Says” —

• “Bankrupt crypto-bank owner Silvergate Capital’s investigation into its top officers was tainted by conflicts of interest, a court-appointed examiner said. An independent director, Ivona Smith, appointed to probe Silvergate’s collapse into bankruptcy, used the company’s own law firm, which created an ‘inevitable conflict of interest,’ according to a report issued Friday by examiner Stephanie Wickouski.”
• “Smith was appointed Silvergate’s independent director in August 2024, a month before the company filed for bankruptcy. She was asked to investigate possible misconduct by current and former directors and officers, including whether insiders improperly sold shares ahead of Silvergate’s collapse.”
• “But before conducting an investigation, Smith participated in the votes to approve the company’s pre-arranged chapter 11 plan, which included legal releases for those insiders.”
• “In her interview with the examiner last month, Smith said she didn’t recall any discussions of legal releases at that time and considered the releases to be ‘boilerplate,’ according to the examiner’s report. “
• “The bankruptcy court overseeing Silvergate’s wind-down authorized the examiner appointment following a request from Joseph Stilwell, who runs Stilwell Activist Investments. In his request in October, Stilwell, who had recently been elected to the board, alleged that Silvergate’s legacy directors enriched themselves by selling shares while keeping shareholders in the dark for two years. Stilwell also criticized Smith for failing to hire independent legal counsel.”
• “Smith issued her investigation report in December, concluding that pursuing claims against Silvergate’s insiders wouldn’t benefit the bankruptcy estate and recommended granting them legal immunity. But Wickouski, the examiner, said the report failed to support the ‘reasonableness of its conclusions.’ The Smith report hasn’t been made public. “

“Justice Department Limits Employee Engagement in ABA Events” —

• “The Justice Department will not allow employees to participate in American Bar Association events in their official capacities or on official time, in the Trump administration’s latest salvo against the legal group that has been critical of its actions.”
• “Deputy attorney general Todd Blanche’s Wednesday memo, sent to department employees and obtained by Bloomberg Law, escalates a clash between the administration and the voluntary lawyers’ association. The ABA has publicly denounced recent threats against federal judges and joined litigation against the government.”
• “DOJ employees may not, while acting in their official capacities, ‘speak at, attend, or otherwise participate’ in events hosted by the ABA, nor may they attend them during business hours as employee time is one the department’s ‘largest expenditures,’ the memo said.”
• “The department will no longer use taxpayer funds to pay for travel to ABA events, and employees who participate in events may not use their title in a way that could suggest the department ‘endorses or sanctions’ their personal views or those of the ABA, the memo said.”
• “DOJ employees in policymaking roles may not hold leadership positions in the ABA, renew existing memberships, or ‘write, speak, or otherwise publish materials in ABA-sponsored media of any kind’ without approval, Blanche said. These employees may only participate in ABA events if approved by their component head and the deputy attorney general.”
• “Career staff may attend ABA events and remain members, but any written contributions to the bar association’s published materials must be done off-duty and without government resources. The memo clarifies that employees cannot use any government device, internet access, or research databases to help them prepare materials for the ABA to publish.”
• “Blanche attributed the department’s change in position to the bar association’s recent lawsuit with other organizations challenging the administration’s freeze on foreign aid funding.”
• “‘The Department is actively litigating against the ABA, yet the Department continues to expend taxpayer dollars on ABA events, the ABA continues to use the participation of Department personnel to attract attendance to those events, and the ABA continues to use Department-engagement to legitimize positions it advances that are contrary to the federal government’s policies,’ Blanche wrote.”
• “The ABA is ‘free to litigate in support of activist causes,’ but the department’s speech ‘must be focused on achieving the Department’s core Constitutional mission,’ the memo said.”