Risk Update

Conflicts News — Analysis of Potential Trump Lawyer Conflict, Real Estate Conflict Caught and Punished

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Does Trump’s lawyer have a conflict of interest?” —

  • “The other day I saw a story with the title: ‘Trump lawyer’s ethics issue: He initially was approached by Daniels.’ In it, the author recalls the fact that the lawyer currently representing Trump in the case related to the hush money payment made to Stormy Daniels had been consulted by Ms. Daniels before he agreed to represent Trump. The article suggests that this means that Trump’s lawyer (Joe Tacopina) has a conflict of interest. However, I don’t think we have enough information to reach that conclusion… yet.”
  • “What we know is that Stormy Daniels approached Tacopina about representing her but he declined. It appears that that ‘approach’ included at least one conversation between Daniels and the lawyer, but that does not necessarily mean that ‘an attorney-client relationship was established at the point of that consultation’ as the article states.”
  • “When a person approaches an attorney to discuss whether the attorney will take on their representation what is formed is a relationship between the attorney and a prospective client, and the duties owed to a prospective client are different than those owed to a client.”
  • “Whether the prospective client actually establishes an attorney-client representation depends on what transpires during the conversation(s) leading to the decision by the lawyer not to take on the representation. And that is the information we don’t have in this case.”
  • “Having said that, assuming there was no attorney-client relationship formed, is there ‘an ethics issue’ as the article says? Assuming the rules that apply are the ones from New York, a lawyer shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter although a different lawyer from the same firm could if certain conditions are met.”
  • “Assuming all that as true, it could be argued that the lawyer violated a duty toward Stormy Daniels and could be subject to discipline for it.”

Catonsville lawyer disciplined for conflict of interest in commercial lease deal” —

  • “A Catonsville attorney who provided legal advice to a prospective commercial tenant without disclosing his ownership stake in the property where the tenant wished to move received a fully stayed 60-day suspension from Maryland’s Supreme Court this week.”
  • “Ali M. Kalarestaghi will instead serve a 6-month probationary period, during which he can continue practicing law, in lieu of the suspension.”
  • “The 62-page majority opinion, authored by Justice Michele D. Hotten, concludes that Kalarestaghi had an attorney-client relationship with the prospective tenant, an optometry practice called Catonsville Eye Associates LLC.”
  • “Catonsville Eye wished to explore moving to a new location at 6567 Baltimore National Pike, which Kalarestaghi owned with his father and brother through an entity called MAH Mountain LLC, according to the opinion.”
  • “First, however, Catonsville Eye needed help getting out of its existing lease for a commercial space on Rolling Road in Catonsville. Dr. Erick Gray, who handled the administrative aspects of the optometry business, wished to avoid paying double rent if he moved the business into the Baltimore National Pike location.”
  • “Kalarestaghi introduced himself to Gray as the attorney for his father but did not mention that he had a 30% interest in MAH Mountain, according to the opinion.”
  • “He agreed to review Catonsville Eye’s existing lease to determine if the business could terminate it early and offered his opinion in an email that the business was obligated to stay at the Rolling Road location through August 2017.”
  • “‘This is legal advice, it is subject to attorney-client privilege, I cannot even share this review with my father, although you can,’ Kalarestaghi wrote in the email.”
  • “Kalarestaghi then proposed a deal in which he would help negotiate an agreement to end Catonsville Eye’s current lease early. The business’s lease at the new location would include ‘up to $5,000 in free legal services’ to work out that agreement.”
  • “Catonsville Eye had Kalarestaghi disqualified from serving as MAH Mountain’s lawyer because of a conflict of interest and ultimately countersued, according to the opinion.”
  • “Hotten concluded that a stayed suspension was appropriate because the court did not find evidence that Kalarestaghi was intentionally dishonest or deceitful. He also has no prior history of discipline since his entrance to the bar in 2007. Epstein, the hearing judge, also found that Kalarestaghi offered sincere testimony and did not believe there was a conflict of interest.”



VIDEO — Getting Started (or Getting Serious) with Software-driven OCG and Terms Management (Sponsor Spotlight)

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In this month’s sponsor spotlight, Intapp is highlighting a the recording of its recent webinar panel on managing client terms of engagement: “VIDEO: Getting Started (or Getting Serious) with Software-driven OCG and Terms Management” —

Event description:

  • Law firms know that outside counsel guidelines (OCGs) are only going to increase in volume and complexity in the future — and firms will need to adopt modern tools, policies, and best practices to effectively manage those mandates.
  • Although moving away from legacy processes and technology can prove challenging for some firms, the benefits of modern OCG management tools are invaluable and can help organizations reach lasting success. That’s why many firms continue to invest in Intapp Terms.
  • Intapp Terms enables firms to effectively catalog, analyze, and comply with client mandates at scale.
  • In this webinar, a panel of independent experts will share their experiences, advice, recommendations, and tips for navigating your Intapp Terms journey — no matter what stage your firm is at.
  • Whether you’ve licensed Intapp Terms and are looking to take your practices to the next level, or you’re just starting to think about a software investment, this session will help you better prepare for your organization’s long-term success. Bring your stories, questions, and ideas to the table, and learn how you can better manage client requirements.

This webinar covered topics, including:

  • Strategies for getting started — Discover how prudent planning, expert assessment, and practice polices can put you in the best starting position.
  • Stories of scaling — Learn how firms are using Intapp Terms to effectively centralize and streamline OCG management.
  • Harnessing new horizons — Achieve active compliance across time and billing activity, and delve into data and analytics, new features, and emerging opportunities.


  • Eric Mosca, Director, InOutsource
  • David Skweres, Director, InOutsource
  • James Edwards, Director of Client Experience, Intapp
  • Martin Armstrong, Senior Product Manager, Terms, Intapp

Watch the Full Video Here.


Risk Update

Risk News — Inside-trading Conflicts Lawyer Caught & Catches Suspension, Conviction Meets Conflicts Gambit

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Former Cozen O’Connor Attorney’s Practice Suspended 1 Year in Pa.” —

  • “Former Cozen O’Connor conflicts attorney William Gericke has been barred from practicing law for one year in the state of Pennsylvania.”
  • “Gericke was charged with violating U.S. Securities and Exchange Commission rules on insider trading in 2021, having misappropriated information he gained as a conflicts attorney at Cozen O’Connor to help him profit on the stock market.”
  • “Gericke has since settled those charges and was barred from practicing in front of the SEC following an inquiry and investigation conducted by the Financial Industry Regulatory Authority and the SEC. He was also fined just over $20,000, double the amount of profit he earned from his trading activities.”
  • “The charges stem from an incident in 2019 in which Gericke received a request for a conflicts check from Liberty Property Trust regarding another real estate firm, Prologis. Liberty Property Trust, at the time a client of Cozen O’Connor, was considering a merger with Prologis. Upon getting the request for a conflicts check and learning of the possibility of a merger, Gericke bought 1,000 shares in Liberty Property Trust, which he then sold at a $10-per-share profit once the merger went through.”

The split between Johnny Doc and his former lawyers is getting messy. He hopes it’s enough to overturn his conviction.” —

  • “The falling-out between John J. Dougherty and the law firm that represented him at his 2021 bribery trial is getting messier.”
  • “And the former labor leader now hopes the dispute could help him overturn his conviction and spare him from a second trial next month on charges he and others embezzled more than $600,000 from their union.”
  • “In recent court filings, Dougherty’s new attorneys argue that the legal defense provided to him by the Center City law firm Ballard Spahr was compromised due to conflicts of interests involving the firm’s other clients, including the cable giant Comcast and Local 98 of the International Brotherhood of Electrical Workers, the union Dougherty led for nearly three decades before resigning as its business manager in 2021.”
  • “They have asked a federal judge to postpone his April 24 embezzlement trial until a hearing can be held to determine whether the law firm’s past representation of both Comcast and Local 98 may have negatively affected the legal strategy deployed by his former defense team led by attorney Henry E. Hockeimer Jr.”
  • “But to overturn his bribery conviction and trigger the dismissal of the remaining charges, Dougherty would have to prove not only that conflicts of interest existed but that he did not waive them and that they so negatively affected his defense that it violated his rights to a fair trial.”
  • “It’s unlikely that Dougherty was completely unaware at the time he chose Hockeimer to be his defense lawyer of the conflicts he is now citing.”
  • “Dougherty’s argument centers on two main points — the most significant, Cinquanto and cocounsel Alan J. Tauber say, being that Ballard Spahr counts Comcast among its biggest clients. Witnesses from the company played a central role in Dougherty’s 2021 bribery trial alongside Philadelphia City Councilmember Bobby Henon.”
  • “Several factors could work against Dougherty’s argument that a conflict of interest existed or harmed his defense.”
  • “It is not uncommon for large law firms like Ballard Spahr to design internal controls when representing clients whose interests diverge. For instance, firms often wall off teams of attorneys representing opposing clients, to avoid even accidental discussion of legal strategies that could give one an unfair advantage over another.”
  • “What’s more, Dougherty and Henon were not charged with defrauding Comcast, so the company is not legally considered a victim in the case. Instead, Comcast executives served as witnesses to bolster prosecutors’ claims that the bribes the labor leader paid Henon defrauded Philadelphia’s citizens of his honest services as an elected official.”
  • “And Ballard Spahr’s ties to Comcast were hardly a secret — especially to Dougherty. David L. Cohen, Comcast’s then-senior executive vice president and the public face of the company in Philadelphia, had previously served as managing partner at Ballard Spahr from 1997 to 2002.”


Risk Update

Financial Risk & Compliance — SRA Doubles Down on AML, US AML Evolution Analysis & Opinion, Private Equity Conflicts Analysis

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‘Onslaught’ of extra AML burdens likely to increase – SRA chief” —

  • “There will be no let-up in the requirements made of law firms to prevent money laundering, the chief executive of the Solicitors Regulation Authority warned today.”
  • “Paul Philip told the Law Society’s Risk and Compliance Annual Conference that the regulator has found itself as ‘piggy in the middle’ between the profession and the government. The regulator would help in any way it can, he said, insisting that firms should not be scared of their obligations – but he suggested that pressure from the government is behind the current push.”
  • “Firms are already required to produce risk assessments to prevent money laundering, and more than a dozen firms have been fined in the past year for failing to carry these out properly. The SRA has also prosecuted firms that wrongly declared they had a compliant risk assessment. “
  • “Philip said the most common request from firms when asked how the SRA could help was to stop adding to the AML regulatory burden – but that is not going to be possible for now.”
  • “‘There is nothing we can do to stop the onslaught of regulatory requirements coming from direct legislation which we are forced to implement. Arguably we are playing catch-up as we should have been doing this sort of thing a long time ago.'”
  • “The Economic Crime Bill, currently going through parliament, will place extra reliance on the SRA to prevent money laundering and Philip said the level of bureaucracy and regulation is likely to increase. The legislation would also give the SRA unlimited fining powers for firms that have facilitated economic crime.”
  • “‘Government pressure to drive through the economic agenda is just colossal,’ added Philip. ‘If we get those powers we would expect and would wish to use them. The level of fines for economic crime, particularly in the financial sanctions era, will increase radically.'”

The Anti-Money Laundering Whistleblower Improvement Act Adds Critical Teeth to the Anti-Money Laundering Program, But There Is Still More To Do” —

  • “On December 23, 2022, Congress included the Anti-Money Laundering Whistleblower Improvement Act in the omnibus budget presented to President Biden. The Improvement Act contained several key amendments to the Anti-Money Laundering Act that bring the program more closely into alignment with other highly successful federal whistleblower programs.”
  • “But for all its strength, the AMLA of 2020 had holes. Corporate auditors and compliance professionals could not qualify as whistleblowers under the original law, despite their unique access to BSA/AML-related information. And as its critics noted from its inception, the AMLA’s missing floor on awards for successful tips severely undercut the program’s power to encourage whistleblowers. Those with information could risk their livelihood and financial stability to bring forward critical information that resulted in massive monetary sanctions, only to see minimal or nonexistent compensation for their courage. Additionally, awards were funded through Congressional appropriations bills, so even for those whistleblowers who did receive an award, FinCEN could not pay them until Congress allocated the money.”
  • “The Improvement Act patched these holes with several long-sought changes. Based on the highly successful Dodd-Frank Act (15 U.S.C. § 78u-6), the Improvement Act demonstrates clear intent by Congress to solicit increased whistleblower tips by expanding incentives and protections for those who report. First, the Act set a 10% minimum award for whistleblowers whose information leads to financial sanctions over $1 million. Second, the Act established the Financial Integrity Fund to support these awards, drawing on criminal forfeitures, fines, and victim restitution from sanctioned entities instead of relying on appropriated tax payer dollars. Third, the Act lifted restrictions on potential whistleblowers who learned of violations through their roles as compliance or audit professionals. Each of these changes further encourages potential whistleblowers to report violations within their organizations to the federal government.”
  • “In ameliorating these gaps, Congress took the extra step of expanding the AMLA to cover information uncovering violations of American sanctions laws. In addition to recognizing whistleblowers with BSA/AML violation information, the amended AML program protects and rewards whistleblowers with information relating to the International Emergency Economic Powers Act, the Trading with the Enemy Act, and the Foreign Narcotics Kingpin Designation Act. Relevant information under the AML program includes any possible violation of these laws and their regulations that has happened, is about to occur, or is ongoing.”
  • “While the 2022 amendments made critical expansions to the AMLA, the Act still has at least one glaring hole. For the whistleblowers it protects, the AMLA creates a strong shield against retaliation for engaging in protected activity. Covered whistleblowers may report violations not only to the government, but also within their organization to those with authority to “investigate, discover, [] terminate, . . . [or] take any other action to address the misconduct.” 31 U.S. Code § 5323(g)(1). However, reporting internally can and frequently does result in whistleblowers experiencing adverse retaliatory actions by their employers, including termination. The AMLA provides generous remedies for successful retaliation claims, including reinstatement, double back-pay, and attorneys’ fees. 31 U.S. Code § 5323(g)(3).”

The LPAC Strikes Back . . . When The Contract Says It Can” —

  • “Many private equity partnerships utilize a limited partner advisory committee (“LPAC”) as a mechanism to approve certain transactions, particularly those where a potential conflict of interest could exist. While Delaware corporate law provides well defined rules for how a self-interested transaction can be cleansed by disinterested directors or shareholders in the context of a corporation, the rules are less well defined when it comes to conflicts of interest for partnerships including private equity funds established as limited partnerships. The decision from In re SunEdison, Inc. demonstrates that the LPAC’s role in approving conflicted transactions remains a case-by-case, contract specific analysis.”
  • “The LPAC often acts as a decision-making body with respect to conflicts that may arise between the interests of the limited partners and the interests of the general partner. The role of an LPAC, however, can vary significantly; sometimes LPACs play a mere advisory role while others operate as a required review authority.”
  • “In re SunEdison, Inc. involved the elimination of a limited partner’s partnership interest for failure to comply with a capital call required by the limited partnership agreement. The removed limited partner filed a lawsuit alleging breach of fiduciary duty. The limited partner argued that the general partner violated the partnership agreement by extinguishing the LP interest without first obtaining approval from the LPAC. The plaintiff alleged that LPAC approval was necessary because the elimination of a partnership interest resulted in an increase to the value of each remaining partnership interest including the general partners, and was therefore a conflict of interest transaction. The general partner defended the claim by arguing that the partnership agreement’s exculpation provision eliminated otherwise applicable fiduciary duties to the extent they were not specifically incorporated in the agreement. The court considered the arguments under the motion to dismiss standard.”
  • “In determining there was no material breach, the court considered whether the agreement required LPAC approval before a partnership interest could be extinguished. The SunEdison partnership agreement contained an enumerated list that detailed what ‘conflict’ transactions required advisory committee approval. This list included transactions with fund-affiliated companies. The court determined that eliminating a limited partnership interest did not match any of the enumerated conflicts and therefore LPAC approval was not necessary. As LPAC approval was not required, the court held there was no breach of the partnership agreement, and thus no material breach (‘it is a stretch to assert even that there has been a contractual breach.’) Therefore, the court concluded the general partner had not breached its fiduciary duty.”


Risk Update

There Will be Conflicts — Oil & Gas Clashes Over Alleged Attorney Conflicts

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Decision of the Day: Court Declines to Disqualify Defendant’s Counsel, No Conflict of Interest Exists” —

  • “In the underlying action, plaintiff contended that Somerset Production Co. LLC amended its operating agreement to add a company half owned by defendant called Berea Oil and Gas Corp., which effectively allowed defendant to dominate Somerset.”
  • “Plaintiff contended that defendant diverted Somerset’s funds for his own personal use. Defendant’s counsel Barclay Damon represented Somerset in 2015 during the time of defendant’s alleged misappropriation of Somerset’s funds.”
  • “Plaintiff therefore asserted that Barclay provided legal services to both defendant and Somerset in connection with several transactions that go to the heart of plaintiff’s allegations and must be disqualified since an there is an obvious conflict of interest.”
  • “The court noted, among other things, that plaintiff alleged that defendant overcharged Somerset for the use of a drilling permit and did not allow Somerset to enjoy the benefits of that permit, adding that whether Barclay was counsel when the well was first purchased in n 1987 is irrelevant to these allegations and do not present a conflict.”

EQT Can’t Nix Its Former Atty From Abandoned Gas Well Suit” —

  • “EQT Corp. has failed to block its former attorney and an ex-employee from representing plaintiffs in a proposed class action over ‘abandoned’ natural gas wells, with a federal judge determining the bids looked like attempts ‘to foreclose an employee that they terminated from securing any meaningful employment’ in the industry.”
  • “On Wednesday, U.S. District Judge John Preston Bailey dismissed EQT’s attempts to disqualify its previous legal counsel Brian Swiger and former employee Bryant ‘Wayne’ Bowman II from representing landowners who sued the company on the grounds it depleted land values and created health hazards by abandoning 12,000 natural gas wells in Appalachia.”
  • “EQT accused Swiger, now an attorney for Bailey and Glasser LLP, and Bowman, a non-lawyer member of the plaintiffs’ legal team, of using insider information to aid the case against it and co-defendant Diversified Energy Co. PLC, but Judge Bailey wrote in his back-to-back Feb. 22 orders that EQT’s arguments were ‘unavailing.'”
  • “In response to the requested disqualification of Swiger, Judge Bailey wrote that EQT was not able to provide examples that he worked on cases that would have provided him insider information pertinent to the current proposed class action.”
  • “As for the requested disqualification of Bowman, a 22-year employee of EQT, Judge Bailey wrote that, ‘Inasmuch as Mr. Bowman is not an attorney, it would appear that his duty to preserve confidential information is governed by contract… this court finds no ethical violation on the part of Mr. Bowman or the plaintiffs’ law firms.'”
  • “A proposed class of West Virginia property owners led by Mark McEvoy and James and Susan Tawney filed their complaint against Diversified Energy Co. PLC and EQT in July 2022, accusing Diversified of leaving them with “unplugged, inoperative and abandoned wells” that posed hazards to their health and lowered the value of nearby properties.”


Risk Update

Judicial DQ News — Delayed Disqualification Motion Motive’s Questioned, Judge Ordered to Disqualify Herself (Again)

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State High Court Questions Whether Attorney’s Delayed Motion to DQ Judge Was Prompted by Adverse Ruling” —

  • “The Ohio Supreme Court has denied an affidavit to disqualify a probate court judge, chastising the plaintiff’s counsel for failing to file the affidavit until nearly three years after becoming aware of a potential conflict of interest.”
  • “Schlichter, counsel for the Clarke siblings, raised a potential conflict of interest between the bank and Hamilton County Judge Ralph E. Winkler of the Probate Division. He alleged that Fifth Third managed money for Winkler’s benefit and received a fee during the probate case, and created an ‘appearance of impropriety.'”
  • “While Schlichter filed the affidavit of disqualification against Winkler on January 3, 2023, several actions had taken place in the case before then and after learning of the possible conflict of interest.”
  • “In April 2018, Schlichter entered a motion granting summary judgment to Fifth Third, followed by the First District Court of Appeals partly remanding the case back to the trial court. The Ohio Supreme Court declined to accept the Clarkes’ appeal to the First District decision in April 2020, and in June denied their motion for reconsideration.”
  • “Counsel for Fifth Third Bank, Jessica K. Baverman of Vorys Sater Seymour & Pease in Cincinnati, Ohio, signed an affidavit on January 7, 2021, as a response to the disqualification attempt. However, Baverman contended that from then until September 2022, the Clarkes’ legal team did not raise the issue of impropriety or recusal.”
  • “In her opinion, Kennedy cited previous examples of recusal matters in the state, namely In re Disqualification of Dezso from 2011, which established that affiants have a burden to prove that their affidavits are timely filed. Further, In re Disqualification of Froelich, Donovan & Welbaum in 2015 stated that a delay in filing an affidavit of disqualification ‘constitutes an ‘independent ground’ for denying the affidavit.'”
  • “On September 8, 2022 Schlichter filed a motion for Winkler’s recusal, asserting the same conflict of interest and appearance of a conflict. Winkler denied the motion less than a month later, finding no reasonable observer would question his impartiality.”
  • “Dezso‘s language states that ‘[i]t is well settled that an affidavit of disqualification must be filed as soon as possible after the affiant becomes aware of circumstances that support disqualification and that failure to do so may result in waiver of the objection.'”
  • “Referring to the Jan. 7, 2021 telephone conference where Schlichter merely ‘raised the issue”’ of impropriety, Kennedy clarified that this did not substitute the need for a timely affidavit.””[Kennedy noted] ‘An affiant’s delay in filing an affidavit of disqualification until after receiving an adverse decision may suggest that the disqualification request was prompted by the adverse decision rather than the judge’s personal connection to the underlying case as alleged in the affidavit.'”

Florida Court Orders Trial Judge to Disqualify Herself” —

  • “Florida’s Third District Court of Appeal told a Miami state court judge that she should disqualify herself, when it granted a writ of prohibition but withheld issuance of the writ.”
  • “‘Because the judge was disqualified from the earlier case, it was pretty cut and dried that she be disqualified from this one,’ Andrew Berman, a partner at Young, Berman, Karpf & Karpf, said about the case in which Miami-Dade Circuit Judge Beatrice Butchko was disqualified.”
  • “Berman, an ethics expert not involved in the case, explained that Butchko was disqualified because she was previously disqualified for prejudging the truthfulness of Nathaniel D. Callahan, a shareholder in the Fort Lauderdale office at Am Law 100 firm Akerman. Callahan is one of the lawyers for the defendant, Bank of New York Mellon, in the current case and an earlier foreclosure one.”
  • “That earlier case involved the same bank attorney, Callahan, and the same opposing counsel, Bruce Jacobs, but a different homeowner. In other words, Callahan argued that Butchko’s prior actions predisposed her to believe Jacobs over him and his clients.”
  • “Jacobs, the managing partner at Jacobs Legal, represents the plaintiff, Marko Dejanovic, the foreclosed homeowner. Jacobs said the Third DCA failed to provide a ‘legal or factual basis for humiliating” Butchko by granting the bank’s petition and called the appellate court ruling “a constitutional crisis playing itself out in real time.'”
  • “And during the evidentiary hearing on the motion [in the prior action], the petitioners presented conflicting testimony in relation to the identity of the current loan servicer, previous reporting showed. But the Third DCA ruled that Butchko failed to finish the hearing before signing the proposed order to show cause. Butchko’s order set an arraignment date while advising the petitioners that the penalties under consideration included ‘jail, adjudication, [and] probation.'”
  • “Callahan did not respond to a request for comment. In a sworn motion to disqualify that Callahan filed in the circuit court in November, he argued that a reasonably prudent person would fear that the presented facts, taken as true, would place that person in fear of not receiving a fair and impartial trial.”
  • “And in the petition for writ of prohibition, multiple attorneys at Akerman, including Nancy W. Wallace, a partner in its Tallahassee office, argued that Butchko’s disqualification was necessary ‘to ensure that justice is dispensed fairly and impartially in this case, and to preserve and strengthen the public’s confidence in the judicial system.'”
Risk Update

Conflicts News — Comedy Club City Council Conflict, Conflict Counsel Conflict Called

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Ex-State Bar Executive Scrutinized in Girardi Probe Continued Work as Conflict Counsel” —

  • “Robert ‘Bob’ Hawley, the former acting executive director of California’s state bar, worked as a conflict counsel for the attorney-oversight agency even as he was under scrutiny for allegedly intervening in a previous disciplinary case against disgraced trial lawyer Tom Girardi.”
  • “A state bar spokesman confirmed that Hawley served on the agency’s special deputy trial counsel panel from May 2019 to December 2021. Members of the pool of private attorneys handle ethics complaints against lawyers when the Office of Chief Trial Counsel recuses itself due to a potential conflict.”
  • “Rick Coca, a senior program analyst for the state bar, said Hawley was appointed to four matters as a conflict counsel. He did not submit invoices for his work and he was not paid for it, Coca said… Coca declined to say whether bar officials had reviewed any of Hawley’s work as special deputy trial counsel but added that ‘all appropriate action will be taken.'”
  • “Hawley’s employment ‘ended independent of any conclusions’ reached by an investigation of the state bar’s handling of complaints against Girardi by Halpern May Ybarra Gelberg, Coca said. The law firm’s report, released to the public on Friday, detailed efforts by Girardi to ingratiate himself with state bar employees even as the agency fielded more than 200 complaints against him over four decades.”
  • “The report concluded that while he worked as deputy and acting executive director at the state bar, Hawley ‘ghost wrote’ case analysis memos for matters sent to conflict counsel, ‘passing them off as the work product of the independent conflict counsel, including on a Girardi case.'”
  • “The report said that in one ‘shocking’ case involving Girardi, Hawley ‘hand-selected’ a special deputy trial counsel to investigate the complaint, then wrote a recommendation to close it and, while serving as acting executive director, presented that recommendation to the bar’s board of governors in 2015 as if the conflicts attorney had authored it. Executive directors, the report noted, are not supposed to play a role in the chief trial counsel’s decisions.”
  • “‘Although we did not find any evidence that Hawley recommended closure of the Girardi case based upon any connection he had to Girardi, Hawley’s actions completely undermined the state bar’s conflict-of-interest procedures and call into question the handling of other conflict cases during Hawley’s tenure,’ the report said.”
  • “The latest revelations about Hawley follow state bar officials’ assurances at a press conference Monday that they have instituted policy changes and training that will prevent lawyers from currying favor with agency employees charged with investigating them for wrongdoing.”

Lawyer’s interests were conflicted in comedy club suit against NYC Council member: ruling” —

  • “A former New York City government lawyer violated conflict-of-interest rules after he represented an iconic comedy club in its lawsuit against a City Council member who accused the night spot of antisemitism, according to an agency ruling.”
  • “First, Yosef’s defamation suit on behalf of Manhattan’s Comic Strip Live was dismissed by a judge. Then, the Conflicts of Interest Board ruled that Yosef had no business filing the lawsuit at all, as he was a city employee at the time.”
  • “Local law prohibits a city employee from acting as an attorney against the interests of the city in litigation to which the city is a party. That law applies whether the attorney is paid or not.”
  • “In 2022, Yosef represented Comic Strip Live in a lawsuit against City Council Member Julie Menin (D-Manhattan) and a news site that covers her Upper East Side district. At dispute in the case were news articles and Menin’s comments accusing the club of being antisemitic.”
  • “The courthouse heckling of the club — which helped launch the careers of Jerry Seinfeld, Eddie Murphy, Chris Rock and Adam Sandler — is rooted in its owners’ decision to post a social media message that included hashtags about vaccine mandates and about Nuremberg, a reference that offended some Jewish groups.”
  • “Menin subsequently published a letter in which she excoriated Comic Strip Live for ‘antisemitic sentiments expressed in your latest Instagram posting.'”
  • “The club sued Menin and the web site over the ‘defamatory statements,’ seeking $1 million in damages. Menin never spoke with them before posting the tweet or publishing the letter, according to the lawsuit.”
  • “Menin, who was once commissioner of the city agency that employed Yosef, said she “can’t even believe that a city attorney … would not only violate a central ethical tenet but also exercise such poor legal judgement in filing a utterly baseless and frivolous defamation claim against me for $1 million for calling out a clearly anti-Semitic tweet.”
  • “Under city charter rules, Yosef could face civil fines of up to $25,000 for representing the club in its lawsuit against Menin.”
Risk Update

Conflicts Concerns — “Spector” Spurs Law Firm Disqualification, Florida Update on Magistrate DQ Rules

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General magistrates need not recuse themselves when former colleagues appear before them” —

  • “General magistrates are not required to automatically disqualify themselves from cases in which a recently resigned magistrate appears as counsel of record, according to the Judicial Ethics Advisory Committee.”
  • “Acting March 1 in Opinion 2023-02, the advice comes following an inquiry from a judicial officer who wanted to know, if a former magistrate joins a private law firm that regularly appears before the court, whether that would require the remaining magistrates to automatically disqualify themselves.”
  • “The inquirer cited former JEAC opinions 04-06 and 10-36 as precedent, which outlined recusal or disclosure based on a judicial officer’s prior legal employment. In those instances, the JEAC opined that ‘[t]wo years is a reasonable period of time for a judge to disqualify himself or herself from hearing any cases handled by the judge’s former law firm, so long as at the end of two years there are no financial ties between the judge and former law firm.'”
  • “In this instance, the JEAC said it could answer the inquiry “fairly succinctly,” that magistrates are not required to automatically disqualify themselves.”
  • “The opinion went on to say that in the context of judicial ethics, a general magistrate is more akin to a constitutional officer than to an attorney at a law firm or governmental agency.”

Ritz-Carlton Atty DQ’d For Conflicts In Tipping Suit” —

  • “The ‘specter of impropriety’ has disqualified an attorney from serving as defense counsel shortly after his appearance in Miami federal court caused a magistrate judge, his former longtime colleague, to recuse herself from a case brought by a proposed class of Ritz-Carlton customers alleging the hotel chain hid automatic tipping on bills.”
  • “U.S. Magistrate Judge Lisette M. Reid on Wednesday disqualified Peter Valori from appearing as counsel for Ritz-Carlton and also recommended that the recusal of Magistrate Judge Melissa Damian be upheld. The two were blocked from appearing in court together due to their nine-year working relationship at the boutique firm Damian & Valori LLP.”
  • “Judge Damian recused herself from the suit in November, one day after Valori submitted a notice of appearance to serve as co-counsel representing Ritz-Carlton.”
  • “Judge Reid said the defense’s argument for retaining Valori ‘essentially invites this court to ignore the elephant in the room: Of all the qualified attorneys admitted in this district, why did [the] defendant choose the one whose appearance would almost certainly lead to either a judge’s recusal or a motion by plaintiff to disqualify counsel?'”
  • “The proposed class also thought that argument was a stretch, accusing Ritz-Carlton of ‘judge-shopping’ in order to drop a magistrate judge who had so far shown favor to plaintiffs.”
  • “The claims in the suit date back to a complaint filed by a Ritz-Carlton customer named Michael Fox in 2017. Fox claimed that customers who ‘purchased food and/or drinks at a restaurant, bar, mini-bar, lounge and/or other public food service establishment owned, operated and/or controlled by defendant in the state of Florida’ were charged an additional gratuity or service charge, in violation of state law.”
Risk Update

Law Firm Conflicts Clashes — Lululemon v Nike Fight Unfolds, DQ Granted in Malpractice Matter

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Decision of the Day: Court Finds for Herrick, Feinstein in DQ Bid for Firm in Federal Legal Malpractice Case” —

  • “Herrick, Feinstein filed a motion for disqualification of the Pennsylvania-based Alan L. Frank Associates from representing a party in a legal malpractice suit originated in the U.S. District Court for the Southern District of New York that is now in pending arbitration.”
  • “The Frank firm allegedly worked as counsel for respondents whose interests are adverse to each other—one sued the other for malpractice in the past and the other was a former law partner of the petitioner.”
  • “The firm alleged that such representation was an unethical conflict of interest and, therefore, respondent’s counsel should be disqualified from representing one of the respondents.”
  • “Special Referee Diego Santiago found that the attorney in question, while their representation at issue may have been well-intentioned, placed petitioner in an untenable situation where their confidences could be in jeopardy.”

Lululemon Attys Deride Nike DQ Bid As ‘Tactical Maneuver‘” —

  • “Attorneys from Knobbe Martens representing Lululemon in a textiles patent suit brought by Nike said Tuesday the shoe behemoth’s attempt to disqualify the firm from the case was only a courtroom tactic and did not present an actual conflict of interest.”
  • “The law firm responded to Nike’s Feb. 23 letter claiming that Knobbe had represented the company in more than 100 legal matters that collectively generated almost $1 million in legal fees and allegedly involved advising Nike on “a wide range of patent procurement,” including on matters related to the Flyknit shoe series at issue in the case.”
  • “Nike said Knobbe partner Craig Summers obtained confidential information about Nike while working on those patents and could use that information to Lululemon’s advantage in this case.”
  • “But Knobbe partner and ethics committee chair Paul Stewart said in Tuesday’s response that Nike’s claims were false and that none of the Knobbe partners who worked for Nike in the past were familiar with the patents involved in the present suit.”
  • “‘When Knobbe represented Nike from 2014 to 2019, Lululemon was not even in the business of making shoes and there would have been no conceivable Nike claim for infringement against Lululemon,’ Stewart wrote. ‘Moreover, during the latter part of that time period, Knobbe already had been representing Lululemon and thus could not have been providing Nike with advice adverse to Lululemon absent a waiver from each.'”
  • “Knobbe ran a ‘conflict check’ when it became aware of the suit and did not find any work that was related to the patents or technology mentioned in the suit, according to the letter.”
  • “‘In an abundance of caution, Knobbe took two precautionary steps. First, Knobbe created an ethical wall precluding the Lululemon attorneys from accessing Knobbe’s old Nike files, and precluding the former Nike attorneys from speaking with the Lululemon attorneys about the Nike litigation,’ the letter reads. ‘Second, Knobbe removed Mr. Summers from the Lululemon litigation team to eliminate even the appearance of impropriety.'”
Risk Update

Lawyer Conflicts News — Conflict Cleared (But Cost Contested), “Secret” Conflict Creates Public Fallout

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Gibson Dunn Partner Clears Name in Qatar Hacking Case, No Conflict of Interest Found” —

  • “Zainab Ahmad, a partner at Gibson, Dunn & Crutcher and a former U.S. Department of Justice prosecutor, has denied having a conflict of interest in defense of a man accused of hacking emails on behalf of Qatar by a former fundraiser for Donald Trump… Broidy alleged that Ahmad had a conflict of interest because she had investigated the alleged hacking while working for Special Counsel Robert Mueller. In August, Gibson Dunn withdrew from the defense of Chalker and his company, leading to speculation about a possible conflict of interest.”
  • “In a hearing last October, U.S. District Judge Mary Vyskocil, overseeing the case, expressed skepticism about Gibson Dunn’s withdrawal and allowed Broidy to move to sanction the firm. Gibson Dunn has now filed a motion urging Vyskocil to deny that motion, arguing that the firm acted in good faith and had no conflict of interest.”
  • “Ahmad stated in a sworn declaration that she was not involved in any investigation into Broidy and never learned confidential information regarding any issue relevant to the pending litigation. Gibson Dunn said that Chalker and his company decided to go with a different firm for their defense, not because of any purported conflict of interest but purely based on their business interests.”
  • “Broidy’s lawsuit alleged that Qatar’s government hired Global Risk Advisors to hack his emails, some of which were leaked to the media. Qatar, Chalker, and the company have all denied his claims. In a Feb. 23 motion for sanctions, Broidy’s lawyers argued that Gibson Dunn should pay hundreds of thousands of dollars in fees they incurred for investigating and prosecuting the potential conflict.”
  • “The case raises important questions about conflicts of interest in legal defense work and the role of former government prosecutors in private practice. Ahmad’s previous work for Special Counsel Robert Mueller, who investigated Russia’s interference in the 2016 U.S. election, has drawn scrutiny from Broidy’s lawyers and Judge Vyskocil. However, Ahmad’s declaration suggests that she did not work on any investigation involving Broidy or the alleged hacking of his emails.”
  • “Overall, the case underscores the importance of ethical conduct in the legal profession and the need for lawyers to avoid even the appearance of conflicts of interest. While Ahmad has denied any conflict, the fact that Gibson Dunn withdrew from the case has raised questions about the firm’s motives and led to accusations of wrongdoing. As the case unfolds, it will be interesting to see how Judge Vyskocil rules on Broidy’s motion for sanctions and whether Gibson Dunn will face any further consequences.”

Partner secretly worked on deal with his firm on opposite side” —

  • “An experienced partner who secretly worked on the purchase of a property where his firm was acting for the seller has been fined £32,000 for a lack of integrity.”
  • “Mr Wright, admitted in 1991, was one of three partners at London firm Ashley Wilson when a fee-earner began acting on the sale of a property for £1.8m. The memorandum of sale listed Mr Wright as acting for the buyer, a friend of his.”
  • “It was then agreed that the firm should not act for both, as there was a potential conflict, and would continue acting just for the seller.”
  • “The buyer moved to South London firm NC Morris, which, unbeknown to Ashley Wilson and the seller, was given instructions for what followed by Mr Wright.”
  • “Two days before completion, NC Morris claimed that the selling agent had misdescribed the property, causing the buyer to offer too much. Ashley Wilson refuted this and, when the buyer failed to complete, served a notice to complete.”
  • “The investigation discovered that Mr Wright had paid the deposit on the property, instructed NC Morris throughout and drove the threatened legal action, at one point telling the fee-earner at NC Morris that the pre-action letter needed to be more aggressive as well as attending conferences with counsel.”
  • “Mr Wright admitted that he had acted where there was an own-client conflict and with a lack of integrity. He also admitting instructing NC Morris to make two payments totalling £53,000 to third parties that were not involved in this or any other transaction.”
  • “In mitigation, Mr Wright offered his ‘sincere apologies’ and admitted his conduct ‘fell below the high standards of a solicitor in practice.'”
  • “The solicitor said he took ‘some responsibility’ for this but said the firm should have advised the seller of its relationship with the buyer, ‘particularly when it was clear to all parties that a dispute had arisen.'”
  • “‘Mr Wright was motivated by his desire to reduce the purchase price of the property to his benefit and the detriment of the firm’s client,’ the SDT [Solicitors Disciplinary Tribunal] said. ‘His conduct was in direct conflict with the duties he owed to his firm’s client…'”