Bressler Risk Blog

“Judge Says Privilege Doesn’t Cover Documents Sought in Suit Against Eckert Seamans” —

• “A federal judge upheld an order against Eckert Seamans Cherin & Mellott in a discovery dispute central to a former client’s conflict-of-interest suit against the firm.”
• “The Tuesday decision from U.S. District Judge Jennifer Wilson of the Middle District of Pennsylvania affirmed a magistrate judge’s order directing Eckert Seamans to turn over certain documents to plaintiff Pace-O-Matic Inc. despite the firm’s assertion that the information in question was protected by attorney-client privilege.”
• “Wilson said in a memorandum that Magistrate Judge Joseph Saporito did not abuse his discretion by applying judicial estoppel and was correct in his conclusion that Eckert Seamans adopted inconsistent positions in bad faith.”
• “POM, a gambling device manufacturer, claimed that Eckert Seamans represented the company in a suit over its devices’ legality while simultaneously representing Parx Casino, a competitor that had been arguing in a separate suit that those same devices should be outlawed. POM claimed it was dropped as an Eckert Seamans client when it brought up the alleged conflict of interest.”
• “POM filed suit against Eckert Seamans in February 2020 and sought documents and information from the firm and other parties regarding a Commonwealth Court case involving POM and Parx. The parties objected, asserting attorney-client and work-product privileges, sparking a dispute…”
• “Wilson supported the finding that the firm took two irreconcilable stances, writing, ‘On one hand, Eckert has taken the position that it does not represent any party adverse to POM in litigation, including Parx. On the other hand, Eckert invokes the attorney-client privilege to oppose the production of documents maintained by Eckert involving Parx, a party with interests adverse to POM.'”
• “Wilson said that by presenting conflicting positions, the firm forced the court to make a choice between the two. She ordered that the unredacted documents covered by Saporito’s order be given to the plaintiffs by July 27.”

“Fed. Circ. Refuses To Lift Atty’s USPTO Conflict Suspension” —

• “The Federal Circuit on Friday refused to block an attorney’s suspension from practicing before the U.S. Patent and Trademark Office, rejecting his First Amendment challenge to the finding that he violated conflict of interest laws by representing clients while working for the U.S. Navy.”
• “Correll was suspended after the USPTO learned that he represented clients in patent and trademark matters at the office for 15 years while he was simultaneously employed by the U.S. Department of the Navy. The office found that he violated federal conflict of interest statutes that bar federal employees from representing clients in any matter in which the U.S. is a party or has an interest.”
• “The Federal Circuit was unimpressed with Correll’s claims that the suspension violated his constitutional rights to free speech and free association, concluding that ‘we agree with the district court that the government’s interest in avoiding even the appearance of impropriety outweighs the burden that Mr. Correll’s suspension has on his rights.'”
• “When Correll registered to practice before the USPTO, he signed an oath promising to observe the agency’s rules of practice, which include a prohibition on federal employees representing private clients, the appeal court wrote.”
• “It added that the U.S. Supreme Court has acknowledged that ‘attorneys regularly and voluntarily waive certain free speech rights as part of their duties,’ so even if Correll was correct that his rights were violated, ‘the First Amendment does not excuse him from obligations willingly undertaken, nor does it forbid the PTO’s discipline.'”
• “He filed or prosecuted 211 patent applications and 80 trademark registration applications between 2002 and 2017, when the USPTO’s Office of Enrollment and Discipline received notice of his activities and opened an investigation, the opinion said. According to the opinion, Correll continued to do both jobs despite being reminded by a USPTO survey in 2003 that federal employees may not represent private clients at the agency.”

“H.E.R. Sues Her Record Label and Asks Out of Contract” —

• “Grammy-winning singer H.E.R. is suing her record label MBK Entertainment, claiming that her contract breaks labor code statutes and must be voided.”
• “In her suit filed in Los Angeles last Thursday, H.E.R., whose real name is Gabriella Wilson, claims that MBK Entertainment, the record label of her manager Jeff Robinson, violated California’s business and professions code with her contract, which she signed at age 14.”
• “The suit, first reported by the Blast, alleges that Wilson didn’t have proper independent legal representation following her signing with MBK in 2011. Robinson, founder of the company and former manager to Alicia Keys, became her manager soon after she signed, and he allegedly fired her old law firm before bringing in his own lawyers to negotiate subsequent deals such as her publishing deal.”
• “Such an act could present a potential conflict of interest because Robinson would be representing both the artist and the label, but as the suit states, Wilson never signed a conflict waiver. The suit also alleges the lawyers took 5 percent from the deals they negotiated but that Wilson never agreed to that fee.”
• “Wilson’s lawsuit also claims the contract violates the California labor code’s seven-year statute, and that the deal should be voidable and ceased as of May 18, 2019. ‘Wilson’s seven years have run,’ the suit said. ‘MBK’s attempts to thwart this important and fundamental California public policy should not be condoned.'”
• “That seven-year statute is itself a hot-button item in the music industry. While most workers in California are protected from personal service agreements from lasting more than seven years, there’s an exception specifically for musicians, with record labels entitled to sue for damages if an artist walks from their deal after seven years and still owes the label undelivered albums. The previously introduced FAIR Act seeks to end that exclusion and faces a vote from California’s senate this week.”

“Walgreens appeals to keep counsel DQ fight out of arbitration” —

• “A lawyer for Walgreen Co urged a Washington, D.C., appeals court to revive a key part of an alleged professional misconduct claim that the retail pharmacy giant brought against one of its former law firms now representing its adversary in arbitration.”
• “Walgreens last year sued Crowell & Moring in District of Columbia Superior Court to immediately stop the large law firm from representing insurer Humana Health Plan Inc in an arbitration with Walgreens over drug pricing, contending Crowell, as its former firm, has violated its ethical duty.”
• “The main issue in Thursday’s appeal is whether an arbitration agreement between Walgreens and Humana applies to Walgreens’ ethics dispute with Crowell, which was not a party to the agreement.”
• “The panel judges questioned whether a ruling might open a door to third parties being brought into an arbitration and they also closely examined the broad language of the arbitration agreement itself.”
• “‘There’s a sentence that just says, ‘If there’s a dispute about the scope of this agreement, you and Humana have agreed an arbitrator will decide it,’ Judge Roy McLeese told a lawyer for Walgreens. ‘Do you think that the disputes we’re talking about today are not disputes about the scope of this agreement?'”
• “Walgreens’ counsel Frederick Robinson of Reed Smith told McLeese and Judges Loren AliKhan and Corinne Beckwith that Walgreens ‘never agreed to arbitrate a dispute about the ethics of our former counsel in any forum other than a judicial forum.'”

“Calif. Panel Won’t Disqualify Law Firm In Pipe Maker’s Fight” —

• “A California appellate panel upheld on Tuesday a lower court’s refusal to disqualify Pillsbury Winthrop Shaw Pittman LLP from representing Victaulic Co. in its multimillion dollar coverage fight with three AIG units, rejecting arguments that the firm’s attorneys obtained relevant confidential information on AIG while at a previous firm.”
• “In a published opinion, a three-judge appellate panel said the AIG units couldn’t show how lower court Judge Jeffrey S. Brand abused his discretion in finding that Scott Greenspan and Arthur Aizley didn’t have any kind of ‘direct personal relationship’ or ‘substantial relationship’ with AIG’s claims-handling arm while the attorneys worked for Sedgwick LLP.”
• “The panel slammed the insurers’ contention that while at Sedgwick, the two attorneys worked on coverage cases involving AIG that were nearly identical to the types of issues in the Victaulic case, calling it ‘some hyperbole.'”
• “Judge Brand tossed the insurer’s motion, finding that despite Greenspan and Aizley’s work on previous matters involving AIG Claims, the AIG insurers couldn’t show that the attorneys obtained any information that was ‘material to the evaluation, prosecution, settlement or accomplishment of Pillsbury’s current representation of Victaulic in this case.'”
• “The appellate panel agreed, saying there’s no evidence to show that Greenspan or Aizley had any direct relationships with AIG Claims personnel. Greenspan testified that during his time at Sedgwick, it was his supervising partner, Lawrence Klein, who logged most of the face time with AIG Claims, the panel noted. As an associate, Aizley had effectively no interaction with AIG, the panel added.”
• “Also fatal to the insurers’ argument is that while Greenspan and Aizley worked on matters for AIG claims, there’s no evidence to show that the attorneys worked with any of the three AIG insurance units involved in the Victaulic litigation.”
• “The panel further noted that Pillsbury put into place stringent ‘wall-off’ procedures that prevented Greenspan and Aizley from having any involvement in the Victaulic case or even accessing records from it when they joined the firm in November 2020 and February 2021, respectively.”
• “‘Defendants do not even attempt to explain why these screening procedures are insufficient, much less how Judge Brand abused his discretion in finding them sufficient,’ Judge Richman wrote.”

“A Federal Judge Bought Apple And Microsoft Bonds While Overseeing A Case Against Them — Then Dismissed It” —

• “A federal judge who dismissed a child-trafficking and forced labor lawsuit against big technology firms including Apple and Microsoft is arguing that his decision should not be vacated over claims that he had a conflict of interest in the case.”
• “The judge, Carl J. Nichols, a longtime corporate lawyer who was appointed to the United States District Court for the District of Columbia in 2019 by President Donald Trump, had bond holdings in Apple and Microsoft when he was assigned the case at the end of 2019. Then, in 2020, while the case was pending before him, he purchased more bonds in both companies, according to an appeal filed against his decision in last month.”
• “A separate filing that includes Judge Nichols financial disclosure forms shows that in 2020 he purchased bonds in Apple seven times, and Microsoft five times, holdings valued between $60,000 and $200,000.”
• “While Nichols declined to comment for this article, he stated in a recent legal filing in April that he had not violated Section 455 because his holdings in Apple and Microsoft were bonds, not stocks – as initially asserted by the plaintiffs – and therefore did not have to recuse himself from the proceeding.”
• “Pointing to a prior legal opinion, he stated that a bond holding does not ‘convey an ownership interest in the issuer,’ so it does not ‘give rise to a financial interest in the debtor.’ Nichols further added that he no longer holds bonds in either Apple or Microsoft.”
• “Judge Nichols’ actions are of ‘serious concern,’ says Charles Geyh, a professor at Indiana University Maurer School of Law, who studies judicial conduct, ethics and procedure. Not only because of the size of the holdings, Geyh says, but also because Nichols increased his holdings multiple times while the case was before him. ‘This is more than your garden variety situation,’ Geyh says. ‘It is so rare to see judges feathering their nests on purpose…normally you would have a judge recusal.'”

Fascinating interview with with Fred Esposito, COO of Rivkin Radler: “Leveraging process improvement: Changing the way law firms handle client in-take” —

• “I wanted our firm to start our process improvement program by working on one that is critical to the business; those processes include intake, conflicts, timekeeping, billing, on-boarding, and pricing. The client in-take process was selected because it not only touches every part of the firm, it also produces outputs that affect and inform those other processes and strategic decisions.”
• “I believe that client in-take may be one of the most critical areas on which a firm can focus its process improvement efforts, simply because it’s a contact point with almost every part of the client’s interaction within the firm.”
• “As the process improvement operation into client in-take began, I had partners, associates, managers, directors, and administrators — such as those in finance, billing, and IT — selected to work on the project… All of these divergent voices greatly contributed to moving the project forward successfully. For example, we saw a lot of things from the lawyers’ perspective that have been very useful. Using this, my team delved into not only the procedural process of how the firm was conducting client in-take — measuring and analyzing the different steps of the in-take process — but also identified what being missed or overlooked.”
• “For example, a large part of the in-take process is determining whether potential clients have conflicts that should be known to the firm. With the ability to focus on this one specific area, the team was able to find a way to better identify conflicts around adverse parties or relationships between parties, which often get missed in routine conflict checks. They also determined whether there were false conflicts being raised that may have caused needless problems.”
• “When the pandemic hit, we wanted to see what the impact of a virtual law firm would be on these processes. So, we regrouped and revised our project charter and scope. In fact, we actually did the Measure and Analyze phases twice. That was because team members had worked the conflict process to a certain point, then decided to expand the scope to capture these missed and false conflicts. There was enough information that had been gathered to tell us this is something we should be considering.”
• “Overall, the process improvement initiative in client in-take at our firm has been going on for more than two years. And that’s my point, this all takes time — it’s not an overnight thing. It’s not like you’re going to buy a Process Improvement for Dummies book and have your firm changed in three months. It’s not going to work like that — process improvement, done right, takes time.”