Bressler Risk Blog

“Southern Indiana attorney reprimanded for representing opposing parties in criminal matter” —

• “Carla Ginn, a solo practitioner in Scottsburg, has been publicly reprimanded for violating the prohibitions against conflict of interest by simultaneously representing a father, the alleged perpetrator, and his son, the alleged victim.”
• “According to the disciplinary complaint, Ginn had been dating the father for about four months in 2018 when she began acting as co-counsel on his older son’s case related to three criminal matters… In January 2020, the father was arrested and charged with 13 felony counts after getting into an altercation with the older son Ginn was representing and a younger son. Although the older son was listed a victim, Ginn appeared with the father at his arraignment and subsequently entered a formal appearance on the father’s behalf.”
• “After the father was order not to have unauthorized contact with his sons, Ginn continued to simultaneously represent the father and older son. She received discovery, including the recorded statements of the older son and his brother in the father’s criminal matter.”
• “Also, in February 2020, she entered her formal appearance in the older son’s previous criminal cases and moved to alter the terms of his probation so he could work part time for his father. The trial court denied the request.”

“A personal conflict of interest drew an agreed public reprimand from the Indiana Supreme Court” —

• “Respondent represented a businessman (‘Seller’) who was negotiating to sell his company to a ‘Buyer.'”
• “Prior to Respondent’s representation, the parties had entered into an exclusivity agreement that limited Seller’s ability to negotiate with others for 150 days. Seller ultimately rejected Buyer’s final offer, and the sale did not go through.”
• “Respondent entered his last billing entry in the matter on November 25, 2015. On November 27, 2015, Respondent, on behalf of a company he owned, sent a proposed purchase agreement to Seller. Although Seller was aware of Respondent’s affiliation with his company, Respondent did not advise Seller in writing that he was no longer Seller’s counsel and was not representing Seller in the proposed purchase agreement, nor did Respondent obtain Seller’s informed consent in writing. On November 30, Seller sought legal advice from Respondent regarding release from his exclusivity agreement with Buyer, which Respondent provided despite being materially limited by his own personal interest. Respondent and Seller consummated their agreement on December 4, 2015.”

“Commentary: Todd Rokita’s odd compulsion” —

• “When he was a small boy, Indiana Attorney General Todd Rokita must have been the kind of kid who had to touch a hot stove multiple times before he figured out it burned. Time and age haven’t taught him much.”
• “The Indiana Supreme Court just rejected—for the second time—Rokita’s attempt to keep a lawsuit filed by Indiana Gov. Eric Holcomb from moving forward. Holcomb sued the Indiana General Assembly for overriding his veto of a bill that violates the Indiana constitution by granting lawmakers the power to call the legislature back into session. The constitution clearly says only the governor may call the legislature into session.”
• “He [Rokita] argued, nonsensically, that the governor couldn’t hire outside counsel without his permission. That he could represent both parties in the dispute. That he also could assume the court’s role and serve as arbiter.”
• “From the trial court to the state’s highest court, judges and justices haven’t said that Rokita’s arguments were misguided, mistaken or even just plain wrong. They have said that the arguments were absurd.”
• “At different times, Indiana’s attorney general has represented the governor and the state legislature when each has been sued. When the two branches of government fall into a constitutional dispute, the notion that the attorney general doesn’t have a conflict of interest is…well, absurd. As a matter of principle, Rokita should have sat this one out.”
• “When Rokita’s feckless determination to insert himself into the battle between governor and legislature popped up, I filed a Freedom of Information Act request for records on the number of times the attorney general’s office has paid for outside legal counsel in recent years… Between 2015 and now, the state of Indiana has hired outside counsel at least 45 different times. Each time, the attorney general has approved the hiring.”

“Judge Denies DOJ Bid to Disqualify Ex-Trump Official, Warns Against ‘Furthering Partisan Causes‘” —

• “A federal judge in Texas on Wednesday rejected the U.S. Department of Justice’s attempt to disqualify a lawyer who served in the department during the Trump administration from an immigration case, suggesting that the DOJ’s motion was motivated more by politics than legal concerns.”
• “U.S. District Judge Mark Pittman of the Northern District of Texas said the government’s effort to boot the lawyer, Gene Hamilton, from the case was ‘a mere shot across the bow meant to blur the real legal issue before the court.'”
• “A DOJ lawyer, Brian Stoltz, argued that ethics rules meant to prevent ‘side switching’ barred Hamilton from representing Texas in the lawsuit, which focuses on a federal immigration rule enacted during the COVID-19 pandemic. The government said Hamilton obtained confidential information about the government’s legal arguments while working for the Justice Department and was substantially involved in cases similar to Texas’ lawsuit that amounted to the same underlying ‘matter.'”
• “Hamilton was a counselor to Attorneys General Jeff Sessions and William Barr during the Trump administration. He is representing Texas as part of America First Legal, an organization founded by former Trump senior adviser Stephen Miller to bring legal challenges to Biden administration policies.”
• “Pittman found that Hamilton did not have confidential information relevant to the case because much of the information in Texas’ complaint is publicly available. Because Hamilton left the government during the presidential transition, he was not working for the DOJ when the actual regulation challenged in the lawsuit was implemented, the judge found.”

“DLA Piper Defends Representation In $30M Power Plant Row” —

• “DLA Piper US LLP urged the state court to reject the disqualification bid by Curtiss-Wright Electro-Mechanical Corp., which claims the global law firm has a conflict of interest in representing Westinghouse Electric Co. LLC.”
• “Westinghouse sued Curtiss-Wright in Georgia in July over the allegedly late supply of reactor coolant pumps for electric and nuclear power plants in the Southeast, claiming about $30.7 million in liquidated damages. Curtiss-Wright sought the firm’s disqualification on the basis that it was represented in 2013 and 2014 by a Swedish attorney, now working for DLA Piper, in a substantially similar dispute with Westinghouse over the supply of reactor coolant pumps for nuclear power plants in China.”
• “But counsel for DLA Piper, a nonparty in the Georgia case, said Curtiss-Wright failed to meet its burden showing the representation of Curtiss-Wright more than seven years ago by Swedish DLA Piper attorney Karl-Oskar Dalin, when he was with another law firm, involved substantial similarities with the Georgia litigation.”
• “‘We’ve heard a lot of generalities about superficial similarities,’ Nancy Hart of Gibson Dunn & Crutcher LLP, an attorney for DLA Piper, said during a motion hearing. ‘But once you get past that surface, the similarities really end.'”
• “The Chinese dispute, and Dalin’s brief involvement in it, happened before Curtiss-Wright was even due to start supplying reactor coolant pumps to Westinghouse for construction projects at the Alvin W. Vogtle Electric Generating Plant in Waynesboro, Georgia, and the Virgil C. Summer Nuclear Power Station in Jenkinsville, South Carolina, Hart said. Dalin joined DLA Piper in Sweden in 2016 and is a partner in its Stockholm office.”
• “But counsel for Curtiss-Wright said Dalin was sent a confidential memo in late 2013 from one of its lawyers at a different firm, assessing the claims and liquidated damages for the Chinese dispute with Westinghouse. That memo included Curtiss-Wright’s strengths and weaknesses in relation to the claims, which are substantially similar to those in the Georgia litigation, said Craig K. Pendergrast of Taylor English Duma LLP, an attorney for Curtiss-Wright.”
• “‘The reactor coolant pump design specifications are common to all of these projects. That’s a common issue for all of them as to the impact of the design changes and the subsequent production and delivery of the RCPs,’ Pendergrast said. ‘The formula for the liquidated damages is common across the board.'”

“Law Firm Shouldn’t Have Represented Local Bars while ABC Attorney was on their Payroll, Giattino and Fisher Say” —

• “Hoboken Councilwomen Jen Giattino and Tiffanie Fisher have asked for an investigation into the restructuring of two Hoboken bar liquor licenses after learning that the attorney representing the city’s ABC Board [Alcoholic Beverage Control] is employed by the firm representing those bars.””Giattino and Fisher said they learned that the law firm Schenk, Price, Smith & King was handling the ownership restructuring of two local Hoboken bars, McSwiggan’s and Green Rock, while John Allen, a city employee and the attorney for the local Alcohol and Beverage Commission Board, was also employed as one of Firm’s attorneys.”
• “‘Assistant Corporation Counsel John Allen resigned as Counsel for the Alcohol Beverage Control Board on October 13,’ City Spokesperson Marilyn Baer told TAPinto Hoboken when asked about the possible conflict. ‘He chose to resign to avoid future potential conflicts. As previously disclosed, Mr. Allen is affiliated with Schenck, Price, Smith & King LLP.'”
• “Hoboken does allow attorneys of its boards to work for or own private legal firms, according to local ordinance, as long as the attorney gives priority to city obligations over private practices so that there will be no conflicts of interest.”
• “Baer continued to explain that Allen resigned from the position with the city ‘instead of simply recusing himself on individual matters pertaining to the license holder,’ and therefore ‘went the extra mile to resolve the matter.'”
• “Giattino, who filed a request for information on Oct.15 and was first told she would not receive a response until Nov. 10, after the upcoming election where the mayor and three City Council seats are being contested, still doesn’t buy it. ‘We learned that Schenk Price was representing at least one liquor license holder back in September. So, getting these responses from Hoboken’s Corporation Counsel means that Hoboken either has no controls in place to manage conflicts like this or the Bhalla administration condones this behavior, or both,’ she said.”

“Cruise Co. Wants Atty DQ’d From Personal Injury Suit” —

• “Attorney Michael Dunlavy doesn’t work at Gerson & Schwartz anymore, but he could have potentially handed over confidential information he gained while working at Foreman Friedman PA, which is representing the cruise line in a trip-and-fall lawsuit filed by Emily Chen, according to a motion to disqualify filed Thursday.”
• “‘Dunlavy acquired confidential, nondiscoverable information about Norwegian in this matter and it would be prejudicial to Norwegian since it would give plaintiff an unfair advantage,’ the cruise line said. ‘The entire firm of Gerson & Schwartz, Dunlavy’s former employer, should be prohibited from representing plaintiff in this matter since the conflict of interest between Dunlavy and Norwegian should be imputed to his entire new firm.'”
• “However, the motion is misguided, Gerson & Schwartz founder and senior partner Philip M. Gerson told Law360 Friday. ‘I’m surprised they didn’t pick up the phone to call me. Had they done, so I would have told them that Michael Dunlavy worked for our firm for a total of nine days,’ Gerson said. ‘He never touched or saw the Chen file, and we have no idea what he did at Foreman Friedman.'”
• “Norwegian said that for most of the eight months Dunlavy was employed at Foreman Friedman, he ‘was the associate attorney handling the matter day to day’ for Norwegian, the motion said. He resigned from the firm on May 17. Foreman and Friedman said it just ‘recently learned’ about where Dunlavy went after that.”
• “The cruise line’s argument is that the Rules Regulating the Florida Bar, which encompass district courts for the Southern District of Florida, requires that Dunlavy be disqualified from representing Chen. Norwegian goes on to cite the decision in Armor Screen Corp. v. Storm Catcher Inc., which determined that when an attorney is disqualified so also is the entire law firm, the company said.”

With kind thanks (as always) today’s update focuses on the latest from Bill Freivogel:

• “JKAYC, LLC v. Noah Bank, No. 20-CV-943 (PKC) (SMG) (E.D.N.Y. Sept. 30, 2021). Tenant moved to disqualify Landlord’s law firm (“Law Firm”) because Law Firm had for many years represented Tenant on other matters. All that ended in June 2019. The magistrate judge granted the motion. In this opinion the district judge denied Landlord’s motion for reconsideration. Law Firm did not represent Tenant in negotiating or executing The Lease. However, Law Firm’s of-counsel (and office sharer) did. The of-counsel did communicate with Law Firm about various aspects of the lease. The decisions turned on substantial relationship, and, to a small extent, playbook. Because of the factual intensity of both courts’ opinions and, because it all is of dubious precedential value, we will not burden you more with background.”
• “LaSalle Elec. Contractors Inc. v. 2590687 Ont. Inc., 2021 ONSC 6547 (CanLII) (Super. Ct. Ont. Oct. 4, 2021). Hotel construction project. LaSalle, an electrical contractor, is suing the owner of the project, 259. 259 has filed a third-party action against the project construction manager, JBL. Law Firm has appeared representing both LaSalle and JBL. 259 moved to disqualify Law Firm, claiming, in part, that Law Firm’s representation of both LaSalle and JBL would enable Law Firm to use confidential information from one to benefit the other — all to the unfair disadvantage of 259. In this opinion the court granted the motion to disqualify Law Firm from representing LaSalle. Recognizing the reality of many third-party actions, the court found the joint representation to be ‘untenable.’ ‘Put bluntly, it is not wholly in JBL’s interests for LaSalle’s claim against 259 to succeed.'”
• “In re S-Tek 1, LLC, 2021 WL 4876930 (D.N.M. Oct. 19, 2021). Chapter 11. Pre-petition, Debtor sued Company for fraud and related grounds. Company counterclaimed, claiming Debtor owed Company money. Company also filed a third-party claim against persons related to Debtor (“Individuals”). Debtor moved to employ Law Firm as Debtor’s Counsel. At the same time Law Firm would represent Individuals in the litigation. Several parties objected to the joint representation, claiming Law Firm would have a conflict of interest. In this opinion the bankruptcy judge approved retention of Law Firm with several conditions. The court characterized the conflict as “potential.” The court said that if the conflict ripened into an actual one, Law Firm would have to resign. To prevent that from happening, the court restricted Individuals from raising issues that would cause an actual conflict. [Our note: Given the unique relationships of the parties, and the questionable precedential value of the case, we will not burden you with the various ways the conflict could become an actual one. The bankruptcy judge took pages doing that.]”
• “Tecnicas Reunidas De Talara S.A.C. v. SSK Inteneria Y Construccion S.A.C., No. 21-22206-CIV-ALTONAGA (S.D. Fla. Oct. 13, 2021). SSK successfully achieved a $40 million international arbitration award against Tecnicas. Tecnicas brought this action to vacate the award because of “side-switching” by a lawyer (“Lawyer”) during the arbitration. Early in the arbitration Tecnicas added lawyer and his firm (“Firm 1”) to “its team of counsel.” Lawyer, while at Firm 1, actively participated for Tecnicas in the arbitration hearing (during March 2-6, 2020). Before the deadline for filing post-hearing briefs, Lawyer left Firm 1 and joined the firm representing SSK (“Firm 2”). Tecnicas first raised this “side-switching” by Lawyer when it filed this petition to vacate the award. In this opinion the court denied relief to Tecnicas, granted SSK’s motion to dismiss this case, and confirmed the award. First, the court found no prejudice to Tecnicas. The court did not apply a Rule 1.9-type analysis because Tecnicas waited until after the arbitration award to raise the conflict. Thus, the standard shifted from “substantial relationship” to prejudice. The court also found that Tecnicas waived the conflict by not raising it in the arbitration tribunal and waiting until after the award to bring it to this court. A lot of the court’s analysis is dependent on the application of international arbitration rules, which we will ignore here given the unusual sequence of events and nature of the case. In denying attorneys fees to SSK, the court said that Tenicas’ ‘arguments are not frivolous, as evidenced by the 22 pages of analysis contained in this Order.'”
• “Hepworth Holzer, LLP v. Dist. Judge Norton, 2021 WL 4692822 (Ida. Oct. 8, 2021). Gary Tubbs was injured in a bicycle accident on property owned by a recreational association (“Ass’n”). Tubbs hired the Hepworth law firm (“Hepworth”) to bring a case against Ass’n. The Elam firm (“Elam”) represents Ass’n. Elam filed a motion for summary judgment. While that motion was pending, an associate (“Lawyer”) left Elam and joined Hepworth. One month after Lawyer’s move, the trial court granted summary judgment for Ass’n. Lawyer, then at Hepworth, helped draft a motion for reconsideration. Earlier, while at Elam, Lawyer did discuss legal theories regarding the motion for summary judgment with two Elam lawyers. Lawyer billed no time to the case. Ass’n moved to disqualify Hepworth. The trial court granted the motion. Hepworth petitioned the Idaho Supreme Court for mandamus or prohibition. In this opinion the court, in granting mandamus (reversing the disqualification), discussed several procedural issues at great length. We will skip those. The court was particularly impressed with Lawyer’s “negligible contact” with the case while at Elam and the prejudice to Tubbs if the disqualification of Hepworth were sustained.”

Hat tip to Simon Chester (Head of Client and Matter Acceptance Team at Gowling WLG) for sending word of: “Potential conflicts of interest prompt Rogers to switch law firms” —

• “The battle for control of Rogers Communications Inc., which is coming to a head in a B.C. court Monday, has involved an ever-increasing number of lawyers as players in the corporate drama cycle their way through law firms because of potential conflicts of interest. The B.C. Supreme Court hearing is expected to decide if Edward Rogers can dictate who is on, and off, the board of Canada’s largest cellphone and cable company, founded by his father. Rogers is on its second law firm in as many weeks.”
• “Hiring Goodmans triggered another legal challenge last week, as lawyers for Edward Rogers flagged a new potential conflict. In court filings, they pointed out Goodmans is now representing both the company and chief executive Joe Natale, who Mr. Rogers unsuccessfully attempted to fire in late September, setting off an increasingly bitter feud. Goodmans responded by saying both the CEO and the company signed off on the firm as Fasken’s replacement, eliminating the issue.”
• “Legal experts say the conflicts laid bare at Rogers, which play out against a backdrop of consolidation in corporate Canada, highlight the barriers to mergers among major law firms and strengthen the business case for specialized legal boutiques.”
• “‘Situations like Rogers create unique conflicts,’ said lawyer Gavin MacKenzie at MacKenzie Barristers, an expert in legal ethics. Mr. MacKenzie is a former head of a regulatory body for lawyers as treasurer of the Law Society of Ontario. ‘You have a public company, where everyone was previously rowing in one direction, suddenly breaking down into constituencies that have very different goals, creating significant challenges for their lawyers,’ he said.”
• “Last Friday, court filings show three members of the Rogers family – Loretta Rogers, widow of the founder, and two of her daughters, Melinda and Martha – attacked perceived conflicts at Torys LLP. The corporate law firm has overseen the clan’s affairs for decades and works for the Rogers Control Trust, an entity that controls 97.5 per cent of the company’s voting shares. In the 1960s, newly graduated law student Ted Rogers articled at Torys before moving into radio and cable.”
• “A series of Supreme Court of Canada decisions over the past three decades raised the bar on a law firm’s duty to its clients. In a 2013 decision on a case involving Canadian National Railway Co., the top court said a law firm cannot act for a client whose interests oppose another client, even in unrelated matters, unless both sides consent.”
• “A number of small firms with central roles in the Rogers leadership struggle, including Lax O’Sullivan Lisus Gottlieb, trace their roots to litigators who left major firms in part to avoid conflicts. Partners at the boutique used to work at Goodmans and McCarthy Tétrault. Mr. MacKenzie said as courts raised the bar on a lawyer’s duty to its clients, they ensured a steady stream of work will go to boutique firms with proven practitioners.”

For more detail on the substance of the matter, see: “Family battle for control of Rogers lands in B.C. court.”

“PwC’s Canada Legal Arm Sees Opportunity for Its Immigration Practice in Sale to Private Equity Firm” —

• “Big clients will no longer be conflicted out by strict audit rules that law firms allied with PwC had to follow.”
• “The uncoupling of the tax and immigration mobility business from Big Four accounting giant PwC will open doors for the Canadian immigration law firm allied with PwC, as it will no longer be bound by strict conflicts rules that now govern which clients it can take on, according to the head of the firm’s Canadian immigration practice.”
• “PwC agreed last week to sell its mobility consulting division to American private equity firm Clayton, Dubilier & Rice for US$2.2 billion. The deal, which covers 5,700 people in 41 locations around the globe, includes 500 Canadians and 200 lawyers and staff at PwC Law, which has offices in Toronto, Montreal and Vancouver.”
• “‘With our current affiliation with PwC we certainly are bound by independence restrictions,’ said Melodie Molina, a partner with PwC Law in Toronto. ‘Without being part of PwC, it does open up the doors into a market that is free from those audit restrictions.'”
• “Molina said PwC Law will continue to exist, providing tax and corporate law services, but the immigration practice, which includes both U.S. and Canadian lawyers, will be carved out into a new business.”
• “PwC, as well as Deloitte and KPMG, hooked up with small but successful business immigration law firms in 2013-14. EY has had an affiliated law firm practicing tax and immigration law firm for even longer. The equity partners in the law firms were also partners in the accounting firms. While there has been shared management in areas such as human resources, the law firms themselves were arms-length operations under regulatory rules.”
• “David Garson’s firm Guberman Garson allied with Deloitte in 2014 but he left the partnership in February 2020 to go back to running his own boutique firm. He said it was sometimes ‘very difficult’ to bring in big clients because any hint of an audit relationship anywhere else in the world meant the clients would be ‘conflicted out.'”
• “He said when the Big Four got into the ‘law game’ they probably initially thought it was ‘an essential part’ of what they could offer clients. While that was true to some extent, the issue of operating margins between law and accounting firms differed quite a bit so returns, in the long run, may not have been what they expected. ‘In an immigration firm, typically margins would be 30 to 35%, whereas an accounting firm wants to see 50%,’ he said.”