Bressler Risk Blog

“A Steak Dinner Keeps Ethics Questions Sizzling in J&J’s Talc Bankruptcy” —

• “On the second day of a hearing on whether to dismiss Johnson & Johnson’s talc bankruptcy, lawyers supporting the Chapter 11 case headed off to Ruth’s Chris Steak House for dinner in Princeton, New Jersey. They weren’t alone.”
• “Someone took a photograph of them dining with Randi Ellis, appointed to represent future claimants in the bankruptcy filed by Johnson & Johnson subsidiary LTL Management LLC. And Clay Thompson, of Maune Raichle Hartley French & Mudd in New York, who questioned some of the attorneys on the stand earlier that day, then attached the photo to his July 12 motion to disqualify Ellis as the future claims representative. The dinner, he argued, showed a ‘significant appearance of impropriety and collusion.'”
• “‘Appearances matter,’ Thompson wrote. ‘Dining out with the half-trillionaire tortfeasor’s lawyer —as that tortfeasor is attempting to capture future victims and cram down current ones—is too much to stomach.'”
• “On Monday, lawyers for Ellis sent a letter asking U.S. Chief Bankruptcy Judge Michael Kaplan to consider sanctioning Thompson, who unsuccessfully moved to disqualify Ellis months earlier on separate collusion allegations.”
• “‘The motion is nothing more than a continuation of Mr. Thompson’s campaign to smear, threaten and intimidate the FCR and erode the public’s confidence in this court and the integrity of the bankruptcy process,’ wrote Mark Falk, of Walsh Pizzi O’Reilly Falanga in Newark, New Jersey. ‘Mr. Thompson has repeatedly and baselessly harassed the FCR and invoked rhetoric that risks eliciting continued threats directed at this court and the FCR. His behavior has repeatedly crossed the boundaries of advocacy.'”
• “Such ‘outrageous antics appear intended to create sensational headlines,’ Falk added, noting that Thompson had not taken photos of Ellis in meetings with lawyers for the official talc claimants committee.”
• “In a statement, Liza Walsh, of Walsh Pizzi O’Reilly Falanga, said Ellis meets with all parties in the case. ‘The motion itself is not worthy of comment as the motion is frivolous, malicious, unprofessional,’ she wrote.”
• “The disqualification motion is the latest example of the vitriol that prompted Kaplan to caution lawyers to tone down the rhetoric earlier this year. But it is also emblematic of a sharp divide within the plaintiffs’ bar now brewing over whether to approve the Chapter 11 plan.”

“Pot Co. Wants Rival’s Atty DQ’ed Over Alleged Conflict” —

• “Two cannabis businesses accused of backing out of a deal to sell Bob Marley-branded products are seeking to disqualify the general counsel of the company suing them in Washington federal court, saying the attorney was once ‘intimately involved’ with the defendant entities when they were all under the same corporate umbrella.”
• “Tilray Inc. and its subsidiary High Park Holdings Ltd. accused Patrick Moen on Thursday of violating ethics rules by aiding Docklight Brands Inc.’s breach-of-contract litigation against the pair of companies, alleging that he drafted the licensing agreement in dispute when all three companies belonged to Privateer Holdings.”
• “Though Moen has not filed for appearance to represent Docklight in the case, he has signed several declarations submitted by Docklight.”
• “Tilray, a global group of brands that sells cannabis and hemp consumer goods, said in the motion that its relatively new management did not understand until discovery the scope of Moen’s past work for Tilray and High Park.”
• “‘But defendants’ privilege review of documents in April 2023 revealed that Mr. Moen was deeply involved in negotiating the license on behalf of High Park and Tilray, in structuring High Park and Tilray, including through Tilray’s IPO, and in preparing and approving Tilray’s public filings that are subject to Docklight’s claims of breach of confidentiality,’ Tilray and High Park said in the Thursday motion.”
• “Upon discovering the conflict of interest, Tilray and High Park claim they asked that Moen recuse himself and Docklight amend a protective order to prevent him from accessing confidential information produced during litigation. But Moen and Docklight allegedly refused.”
• “‘Defendants’ further investigation revealed that this is not the case of a general counsel of a parent company that occasionally weighed in on legal matters of the subsidiaries,’ Tilray and High Park said. ‘Rather, Mr. Moen had his own Tilray email account, provided advice and privileged materials to Tilray’s board using that email address, and had significant involvement in Tilray’s legal affairs.'”
• “Moen, now senior vice president for corporate development and legal affairs at Docklight, was general counsel for Privateer from November 2013 through March 2021, according to Tilray’s motion. During that time, as Moen advised the parent company on all legal and compliance affairs, Docklight and Tilray were formed as subsidiaries of Privateer.”

“Biglaw Attorney Learns Hard Lesson About When *Not* To Recruit New Lawyers” —

• “Maybe Perkins Coie attorneys think they *always* need to be recruiting potential lateral lawyer talent, but they’re learning there is a time and a place for everything.”
• “An unnamed Perkins Coie attorney was benchslapped by Northern District of California Judge Yvonne Gonzalez Rogers for trying to recruit one of her clerks mid-trial.”
• “Yeah, even if you’re uniquely impressed by the legal acumen of a law clerk, it seems like discretion would warrant at least waiting until the end of trial to try to recruit them to your firm.”
• “And Judge Gonzalez Rogers made it abundantly clear that nonsense would not fly in her courtroom or in her district:
  • ‘No Lawyer should ever reach out to a law clerk of a judge during trial and suggest that at some point [the clerk] should contact him if he wants a job. It is so inappropriate that it’s shocking to me that I have to say anything about this.”
  • ‘In the Northern District of California, it is inappropriate, and it should never happen,’ she said. ‘So I don’t know what people think is okay, but it is not.'”

“Law Firm Hack Affects Victims of an Earlier Breach Again” —

• “Orrick, Herrington & Sutcliffe on July 20 reported the data breach to several state regulators, including the attorneys general of Maine and California, as well as a HIPAA breach to the U.S. Department of Health and Human Services.”
• “Among the affected individuals was an Orrick client tied to a vision benefits plan that had suffered its own health data breach several years ago. Orrick said it had provided legal counsel for a 2020 security event involving the manager of the vision benefits plan.”
• “Law firms such, as Orrick, that receive PHI from clients to provide legal services, including to assist in health data breach response, are clearly business associates subject to compliance with HIPAA rules, said regulatory attorney Paul Hales.”
• “‘This is every law firm’s worst HIPAA nightmare, even more so for one with the well-regarded reputation like Orrick, Herrington & Sutcliffe,’ Hales said. ‘Government investigations and private lawsuit discovery will examine Orrick’s HIPAA compliance program in minute detail. Those proceedings will be painful and unpleasant for Orrick and its client. And likely will pit legal counsel against its client,’ he said.”
• “The San Francisco-based law firm, which has 25 offices worldwide, told regulators that information contained in the compromised file of the vision benefits plan included individuals’ name, address, date of birth and Social Security number. Social Security and financial information were not among the member information contained in the compromised Delta Dental of California file, Orrick told regulators.”

“SEC Wins Access to Some Covington & Burling Clients’ Names” —

• “Covington & Burling LLP must turn over the names of seven clients whose data was compromised in a cyberattack to the US Securities and Exchange Commission, despite objections by the firm and others that to do so would weaken attorney-client privilege.”
• “The SEC had asked in March for the names of almost 300 ‘public company ‘ of the law firm, saying it needed them to determine if the hackers had used the information they stole to engage in illicit trading.”
• “US District Court Judge Amit Mehta in Washington ruled that request was ‘too broad’ and he ordered the law firm to reveal the names only of clients whose material, nonpublic information may have been accessed by hackers during the 2020 breach of the law firm’s computer files.”
• “Such a request by the SEC ‘does not exceed its statutory authority or cross any constitutional lines,’ the judge wrote.”

“PwC admits to another conflict of interest breach” —

• “Embattled consultancy firm PwC has admitted to another serious conflict of interest breach, but has clarified that it did not involve the misuse of government information.”
• “The breach occurred in 2018 and is separate to the misuse of confidential tax policy information that has triggered a reputation crisis for the firm and seen the divestment of its government services division for just $1.”
• “This breach involved a PwC staff member entering into an exclusivity agreement with a client without proper authorisation from the firm’s conflict of interests team.”
• “Details about the 2018 matter were not addressed during previous parliamentary inquiries and are likely to prompt more scrutiny and criticism of the firm, which initially sought to downplay the seriousness of the scandal.”

“Judge Denies Bid to DQ Pietragallo From Repping Par Funding Company in Criminal Actions Following Attorney Assault” —

• “A Pennsylvania federal judge determined attorney Douglas Rosenblum and the Pietragallo Gordon Alfano Bosick & Raspanti firm should not be disqualified from criminal proceedings against the company doing business as the now-defunct Par Funding, despite one of the firm’s attorneys having been assaulted by the brother of the company’s former CEO.”
• “The company’s officers, who are co-defendants with CBSG, had argued that Rosenblum and Pietragallo Gordon should be off the criminal case due to their relationship with Gaetan Alfano, a partner at the Pietragallo Gordon who was allegedly assaulted by the brother of Par Funding CEO Joseph LaForte. But Kearney concluded that there was no conflict of interest, and deferred on whether Rosenblum would be a necessary witness for the criminal trial.”
• “The midday attack occurred on Feb. 28 on 19th St. between Chestnut and Ludlow Sts. in Philadelphia while Alfano, who has been serving as counsel for a court-appointed receiver for CBSG and related entities, was leaving a virtual hearing in which he advocated for evicting Joseph LaForte from his Haverford, Pennsylvania, residence.”
• “The defendants had argued that as Alfano is a partner of the firm and serves on the firm’s executive committee, the criminal charges ‘present trial counsel with a potential conflict between trial counsel’s fiduciary obligations to G.A. — a colleague of the same law firm — and his obligations to CBSG.'”
• “CBSG argued that it could ‘think of no circumstance under which it would call Rosenblum as a witness in its case-in-chief, either to authenticate evidence or to provide substantive testimony,’ and therefore it didn’t appear ‘that Rosenblum’s continued representation of CBSG runs afoul of Rule 3.7,” which holds that a lawyer “shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness,” with the exception of “certain delineated circumstances.'”
• “In Kearney’s July 12 memorandum, the court said in a footnote that it disagreed with the defendants’ argument that Rosenblum couldn’t represent CBSG and have Alfano be a witness for the prosecution on the charges against the LaFortes.”
• “‘The charged assault of G.A. did not change or create new conflicts for attorney Rosenblum. Attorney Rosenblum represents to us his law partner G.A. will not be testifying against Complete Business Solutions because Complete Business Solutions is not charged with crimes against G.A.,’ Kearney said. ‘We find no conflict of interest arising from G.A. identified as an alleged assault victim in charges not brought against Complete Business Solutions.'”
• “The court further noted that Rosenblum had satisfied the requirements of Pennsylvania Rule of Professional Conduct 1.7(b) ‘by obtaining informed consent and a waiver from Complete Business Solutions to continue representing it in this matter,’ therefore, removing any potential or actual conflict of interest that could have existed.”

“Taft Stettinius Missed Conflicts In Rush To Merge, MGM Says” —

• “MGM Resorts International is suing its ‘loyal legal advisers’ Taft Stettinius & Hollister LLP in Michigan state court, alleging the firm violated professional conduct rules by merging with another firm that was representing MGM’s opponent in an arbitration without telling the company about it.”
• “MGM sued in Wayne County Circuit Court on Tuesday, asking for Taft Stettinius to be disqualified from representing its adversary in an arbitration over alleged diversion of internet gaming revenue and for the court to declare that the firm violated the Michigan Rules of Professional Conduct by simultaneously representing both sides of the dispute.”
• “MGM alleges that Taft Stettinius, ‘in its rush to merge with another law firm,’ cast aside its obligations to existing client MGM and started representing a claimant in the pending arbitration against MGM.”
• “‘When MGM confronted Taft with its disloyalty, Taft purported to fire MGM as a client to ‘cure’ the conflict — a tactic forbidden by Michigan law,’ MGM wrote.”
• “Taft Stettinius has represented MGM since 2009 in credit and bond financing transactions, with regulatory advice on gaming issues across numerous jurisdictions, in property tax and liquor licensing issues and during the sale of multiple MGM entities, according to the complaint. MGM has paid more than $3 million to the firm in legal fees since 2014, MGM says. In September, Taft Stettinius merged with Jaffe Raitt Heuer & Weiss PC, which was representing Partners Detroit, a claimant in a ‘contentious arbitration’ opposite MGM, according to the complaint.”
• “MGM didn’t know about the merger, and Taft Stettinius didn’t notify MGM that it was taking on a conflicting party, the company says. MGM discovered the conflict when a demand in the arbitration case came in the same letterhead Taft Stettinius had used to give MGM legal advice, according to the complaint.”
• “‘Either Taft’s pre-merger conflict screening was seriously deficient, or Taft perceived its conflict yet chose not to alert MGM,’ MGM said.”
• “The conflict would result in MGM’s in-house counsel being cross-examined by Taft Stettinius attorneys in the arbitration while MGM was receiving legal advice on other matters from other Taft Stettinius attorneys, the complaint says.”

“Ethics Committee Advice for Justices whose Staff Attorneys Had Prior Involvement in a Matter” —

• “The Supreme Court Committee on Judicial Ethics Opinions (CJEO) has issued an expedited opinion about the obligations of an appellate justice whose staff attorney previously practiced as counsel in civil cases challenging conditions of criminal confinement.”
• “In CJEO Expedited Opinion 2023-050, the committee concludes appellate justices have an obligation under the California Code of Judicial Ethics and the Code of Ethics for the Court Employees of California to disqualify a staff attorney from working on any part of an appellate matter in which the staff attorney’s prior service as a lawyer in the proceeding would have been disqualifying for the justice had the justice served in such a capacity.”
• “The committee advises that under canon provision 3E(5)(a), a justice’s staff attorney would be precluded from working on any criminal defendant’s appeal assigned to the justice, if, at any time:
  • The staff attorney represented the criminal defendant in the criminal appeal now before the justice;
  • The staff attorney represented the criminal defendant in another matter related to the same contested facts and law as that defendant’s criminal appeal; or
  • The staff attorney gave advice to the criminal defendant on any issue in the criminal appeal.”
• “Finally, the committee advises that under canon provision 3E(5)(b), a justice would have the same duty to preclude a staff attorney from working on any criminal defendant’s appeal if, within the two years prior to the justice’s assignment of the criminal appeal:
  • The criminal defendant was a named class member and client of the staff attorney while in private practice;
  • The criminal defendant was a named class member and client of an associate of the staff attorney while in private practice; or
  • A private practice associate of the staff attorney appears in the matter assigned to the justice.”
• “Responding to the inquiring justice’s specific question about a staff attorney’s prior service in private practice as a class action attorney, the committee advises the justice would have no duty to identify and effectively disqualify the staff attorney for any unnamed class members who remained unnamed as clients or class members of either the staff attorney or the attorney’s law associates during the two years prior to the justice’s assignment of an appeal.”

“Reebok Pushes Again For Hogan Lovells DQ In TM Suit” —

• “Reebok renewed its bid to disqualify Hogan Lovells from representing a rival in a sneaker design trademark dispute, calling the firm’s assertion that its past work for Reebok involved foreign trademarks unrelated to the present suit ‘a distinction without a point.'”
• “Reebok responded to Hogan Lovells’ arguments seeking to remain as counsel for Autry, saying in a filing in Massachusetts federal court Wednesday that its trademark registrations in different countries do not create jurisdictional limits on the potential confidences the firm could use to benefit its current client.”
• “‘Reebok’s Stripecheck Mark in Europe is the same as the mark it uses and has registered in the United States,’ Reebok said. ‘In fact, it is a well-known feature of trademark law that a single application can be used to apply for the same mark worldwide, underscoring the global nature of trademark registration and enforcement strategy.'”
• “Reebok sued Autry in May, accusing the company of employing an ‘unlawful business strategy’ that centers on using well-known intellectual property by shoemakers to sell high-priced knockoff sneakers to U.S. consumers, who are often aware of the alleged infringement. The complaint alleges that Autry is selling ‘blatant knockoff versions of Reebok’s shoes.'”
• “In opposing Reebok’s disqualification motion last month, Hogan Lovells argued that the present case is distinct from the firm’s prior representation of Reebok, which involved registrations of trademarks and not litigation related to infringement allegations. Reebok responded that Hogan Lovells did more than just help register its trademarks and said the company had to share confidential information with the firm, even if the registrations were in other countries.”
• “Reebok said it doesn’t have to show the court what confidences Hogan Lovells could use for Autry’s benefit, which the firm had argued, because Massachusetts rules don’t mandate it.”

“Calls for big consultant firms to be broken up” —

• “The former head of the consumer watchdog has called for big consultancy firms to be broken up, in a bid to reduce the risk of conflict of interest. Allan Fels, who previously oversaw the Australian Competition and Consumer Commission, told a Senate inquiry the big firms should only focus on auditing, rather than consultancy work.”
• “The inquiry was set up in the wake of the PwC tax advice scandal, where a former partner passed on confidential government information to clients.”
• “Professor Fels said the government needed to introduce legislation to break up large consultancy firms. ‘Self-regulation can’t be relied upon, nor can government regulation. We therefore need legislation to break up the big four,’ he told the inquiry on Monday.”
• “‘The big four argued that there are benefits from combining consulting and advisory work in a business that does audit. This is a rather dangerous argument for them to run.’ Prof Fels said a similar approach could be taken to the consulting sector to what happened with the country’s banks in the wake of royal commission findings. ‘There is a severe conflict of interest of an actual institution and the interests of customers’ he said.”
• “Consultancy firm Deloitte will appear at the inquiry later on Monday, where senior executives will be forced to explain conflicts of interest. The firm said in a submission to the inquiry it was aware of two incidents of conflicts of interest.”
• “In August 2022, it was identified Deloitte had breached its own independent and conflict management policy when it did not seek pre-approval from the auditor-general to audit an unnamed government entity, while it was also auditing other data held by the same entity.”
• “Deloitte said the firm took its obligations about the use of confidential information seriously. ‘Any matters in relation to the misuse of confidential government information would be investigated in line with our normal processes.'”
• “Finance Minister Katy Gallagher said while she was aware of an over-reliance on consultancy firms being used for government projects, the scale became apparent after she won office. ‘It is a problem – it is worse than I thought,’ she told ABC radio.”

“Miami Mayor Takes Break From Quinn Emanuel for President Run” —

• “Miami Mayor Francis Suarez is taking unpaid leave from his other job at law firm Quinn Emanuel as he makes a long-shot run for the White House.”
• “The firm and Francis agreed that he should focus on his presidential campaign,’ the [firm’s] spokesperson said via email. ‘His unpaid leave was motivated by no other consideration.’”
• “Suarez, who has held a handful of outside jobs while serving as mayor, is under fire over conflicts of interest. His work for a local developer—said to have paid Suarez $170,000 to help cut through red tape—has prompted multiple investigations.”
• “Quinn Emanuel hired Suarez when the firm launched its Miami office in 2021. The firm’s lengthy client roster includes hedge fund giant Citadel, whose founder Ken Griffin donated $1 million to Suarez’s state campaign earlier this year.”
• “He makes about $126,000 a year in his role as the city’s top elected official and converts it into cryptocurrency, according to regulatory filings.”

“Judge Rejects Coke’s Motion to Disqualify Paul Hastings, Says Beverage Giant Signed Valid Conflict Waiver” —

• “A federal judge on Monday denied the Coca-Cola Co.’s motion to disqualify its longtime outside counsel Paul Hastings from representing a startup that has filed a $100 million lawsuit against Coke.”
• “In a 28-page ruling, U.S. Magistrate Judge Robert Norway of the Middle District of Florida found that Paul Hastings’ representation of the startup was indeed a conflict, but that Coke signed an enforceable conflict waiver when it engaged Paul Hastings to represent it in a human rights matter in April 2021.”
• “Norway said that whether that waiver should be deemed enforceable came down to whether Atlanta-based Coke is an experienced, frequent and sophisticated consumer of legal services, the background needed to grasp the potential repercussions of what it was signing.”
• “The answer is clearly yes, the judge ruled, noting that Coke employs between 150 and 200 in-house lawyers and over the last five years has hired more than 50 outside law firms, paying them tens of millions of dollars.”
• “‘Think of it this way,’ Norway wrote. ‘A magician performing magic tricks is perceived differently by different people. A toddler in the audience might be surprised and delighted to see the magician pull a rabbit out of his hat. Teenagers and adults in the audience may respond differently based on the number and types of magic shows they have experienced. But the seasoned vaudeville actor lurking just off the stage won’t be surprised. Here, Coca-Cola is most like the jaundiced-eyed vaudeville actor. Coca-Cola knew what Paul Hastings is, what Paul Hastings does, and the types of clients Paul Hastings represents. Based on Coca-Cola’s familiarity of the risks involved, its representation by independent counsel, and the disclosure provided, I find that Coca-Cola knowingly waived the specific conflict here—that is, it understood and consented to Paul Hastings serving as counsel to an opposing party in future litigation matters,” Norway added.”
• “The dispute between Coke and Paul Hastings broke out in March after Paul Hastings hired three lawyers from Cahill Gordon & Reindel who a month earlier had sued Coke on behalf of SuperCooler, a Maitland, Florida, startup whose technology cools canned or bottled beverages to below freezing in seconds.”
• “After learning that Paul Hastings was taking over representation of SuperCooler, Coke expressed outrage and sued, alleging Paul Hastings had ‘abandoned its ethical obligations’ and should be disqualified”

“Viasat loses bid to disqualify law firm Gibson Dunn in Western Digital patent case” —

• “U.S. law firm Gibson, Dunn & Crutcher on Tuesday fended off an attempt by Viasat (VSAT.O) to disqualify it from representing rival satellite communications company Western Digital (WDC.O) in the companies’ patent dispute in Texas federal court.”
• “Viasat said that Gibson Dunn represents it in other matters and moved to disqualify it from the case on ethical grounds after Western Digital’s lead attorney joined the Los Angeles-founded firm.”
• “U.S. District Judge Alan Albright rejected the motion, according to a Tuesday docket entry, finding that Gibson Dunn had provided ‘adequate safeguards’ to continue handling Western Digital’s case.”
• “Viasat said Gibson Dunn received relevant confidential information from the Acacia case, and that both cases relate to the value of a Viasat patent license with Acacia that the firm would ‘attack’ in the Western Digital case.”
• “Gibson Dunn and San Jose, California-based Western Digital told the court that Viasat had previously agreed to waive any conflict and that it was seeking a ‘strategic advantage.’ The firm also said it had implemented an ‘ethical ‘ to wall off attorneys working on Viasat matters from the case.”

“Jones Walker Client Rips ‘Erroneous’ DQ In $1.2B Fraud Case” —

• “A defendant charged with participating in a $1.2 billion embezzlement scheme targeting Venezuela’s state-owned oil company told a Florida federal court that a magistrate judge’s decision to disqualify Jones Walker LLP from representing him was both ‘contrary to law’ and ‘clearly erroneous.'”
• “In an objection filed Friday to U.S. District Judge Edwin G. Torres’ decision to disqualify the firm and partner Edward Shohat, defendant and asset manager Luis Fernando Vuteff said a precedential case, United States v. Almeida, shows Shohat owed no duty of loyalty to a witness who signed a joint defense agreement with a former Shohat client. He only owes the witness who plans to testify in Vuteff’s case a duty of confidentiality and there is no conflict of interest, Vuteff said.”
• “‘As such, disqualification of counsel of choice is too drastic a remedy where independent counsel will be in precisely the same position with respect to any shared confidences as any entirely new lawyer would be. The order literally ignored this language in Almeida: ‘[t]he mere inability to utilize the privileged communications is not itself a manifestation of a conflict of interest, because no lawyer in the world could utilize those communications,” Vuteff said.”
• “Vuteff, who is from Argentina, is facing one count of conspiracy to commit money laundering alongside Ralph Steinmann of Switzerland. According to prosecutors, the pair created sophisticated financial mechanisms and set up the relationships required to launder more than $200 million.”
• “Last month, Judge Torres took issue with Shohat’s previous representation of his former client, who is a witness in the case in the government’s investigation and ordered Vuteff to retain new counsel. The judge found that Shohat was privy to confidential information tied up in the joint defense agreement with another witness, Alvaro Ledo Nass, who pled guilty earlier this year to taking $11.5 million in bribes.”
• “Judge Torres said disqualification is warranted because there is the risk that the facts or strategies discussed with the witnesses ‘have infected the strategies and theories that Mr. Shohat has already formulated for [the] defendant.'”

“Appellate Court Sides With Law Firm in Dismissing Objections to It Representing Estate, Plaintiff Claims ‘Unethical Advantage’” —

• “In July 2019, Haydusky objected to the Probate Court’s retention of the law firm Dey Smith Steele by attorney Daisy P. Garces on behalf of her mother’s estate, alleging a conflict of interest existed as she had consulted with the firm seeking its representation regarding the matter.”
• “Haydusky claimed that she had ‘multiple telephone conferences and in person meetings with this firm’ and that she shared ‘private, confidential facts’ that could potentially create a conflict and an ‘unethical advantage in this case,’ the opinion said.”
• “The court issued an order overruling the objection, finding no conflict on interest. Haydusky then filed an application for reconsideration of the Probate Court’s order, arguing that she had been denied her right to a fair trial—her legal right to admit evidence, which she claims would have proved her case. She further claimed that the defendants had ‘a completely unfair advantage in the case,’ and that the order represented a prejudicial decision by the judge, showing ‘a clear and obvious bias on the part of the judge,’ the opinion cited.”

“FDIC Wants Atty Disqualification Paused For 5th Circ. Appeal” —

• “The Federal Deposit Insurance Corp. asked a Louisiana federal judge to wait for a Fifth Circuit decision before disqualifying its attorneys from a $125 million bank fraud case against the accounting firm EY, saying it believes its chances of having the decision overturned are strong.”
• “In its Friday motion, the FDIC urged U.S. District Judge Eldon E. Fallon to pause the suit while the Fifth Circuit reviews the judge’s June ruling barring the corporation’s attorneys from representing it due to the potential bias the judge said stems from its improper access to confidential information.”
• “Judge Fallon determined that the ArentFox Schiff LLP attorneys representing the FDIC and in-house counsel viewed thousands of pages of statutorily protected and privileged materials from the Public Company Accounting Oversight Board that they were not supposed to view and that the ArentFox Schiff attorneys had possession of those documents for several years, which could result in prejudice against EY.”
• “‘Irreparable harm will occur here absent a stay because the FDIC-R cannot replace the knowledge and expertise of counsel who have been investigating and litigating this matter for more than five years’ the FDIC said in its motion. ‘Disqualifying the FDIC-R’s counsel will irreparably harm its ability to litigate this matter effectively and efficiently because current counsel’s knowledge and experience cannot be fully replaced. And hiring new counsel will result in substantial burden and undue expense for the FDIC-R.'”
• “The FDIC said it believes it has a good chance of succeeding in having the ruling overturned, noting that Judge Fallon acknowledged its attorneys hadn’t committed any ethical violations and that the only issue was viewing documents that they were accidentally given access to.”
• “Additionally, the FDIC said the suit should be paused because there’s a serious legal question being posed, labeling the specific issue as a ‘first of its kind’ matter that deals with a disqualification imposed because of the possibility of prejudice, versus the usual concrete actions that lead to counsel disqualification in other cases.”
• “‘To the FDIC-R’s knowledge, no court has ever ordered disqualification of counsel for good faith receipt of an intentional production from a governmental body, let alone without finding a rule violation and actual prejudice,’ the FDIC said Friday. At a minimum, the disqualification order raises significant legal issues regarding the proper grounds for attorney disqualification in the Fifth Circuit and warrants a stay to permit meaningful appellate review.”

CNA’s latest newsletter: “Dibble Dabble Double Trouble: Mitigating the Risks of Dabbling In Your Law Practice” —

• “The Merriam Webster Dictionary defines ‘dabble’ as ‘to work or involve oneself superficially or intermittently especially in a
  secondary activity or interest.’ In a legal context, ‘dabbling’ – or practicing in areas outside of your comfort zone, on a sporadic basis, in a field in which you have relatively little experience – is fraught with inherent risks.”
• “A ‘dabbler,’ by definition, presents a practice risk where the attorney has not invested the time nor the regular engagement to achieve competence in a particular area of law. ‘I know enough about X to be dangerous’ is a mantra frequently repeated “in jest, and yet it is no laughing matter.”
• “On the contrary, providing less than competent legal representation is problematic for not just the attorney but their clients, the courts, and the legal system. Dabbling to the point of incompetency also may lead, not surprisingly, to possible disciplinary violations and legal malpractice actions.”
• “The [2020 ABA] report further finds that more than 60 percent of all legal malpractice claims involve an area of the law in which the subject attorney works less than 20 percent of the time and attorneys who practice in a single area of the law account for less than seven percent of all legal malpractice claims.”
• “Lawyers dabble in unfamiliar practice areas for a variety of reasons. The law is a business, and a lawyer can, of course, be motivated to take on a “new kind of matter” (for them) purely for economic reasons… Sometimes dabbling arises from a desire to help purely for personal instead of pecuniary reasons.”
• “In addition, there are certain practice areas where dabbling is more dangerous or where there is ‘crossover,’ meaning that one or more areas of practice overlap within the specific facts presented by the client. For example, intellectual property [IP] legal matters encompass multiple, discrete, and specialized practice areas, i.e., patent, trademark, copyright and trade secret law… Another area of practice that may pose significant problems for the ‘dabbling’ attorney is wills, estates and trusts… Immigration law is another area where dabbling is becoming more frequent… Bankruptcy and collections matters present yet another area where the ‘dabbler’ may encounter problems due to their lack of experience… Lastly, while family law/domestic relations may seem simple at first glance, unexpected complexities (transfer of assets that become taxable events, retirement accounts, etc.) may arise that complicate matters for the dabbler.”
• “Be mindful that your inexperience in the practice area might hurt your client. Opposing counsel will perform due diligence, check you out, and learn about your reputation and background. If you are dabbling, and present as new to the area of practice, they may try to leverage your perceived inexperience. Experienced lawyers will pick up on your lack of experience and may try to intimidate you or, worse yet, leverage any lack of competency into a more favorable settlement or resolution for their client.”
• “It may be that you took on the representation of your current client with the best of intentions, but as the matter progressed, it became apparent you were out of your depth. If the issues are beyond your level of competency, and you are unable or unwilling to either put the additional time in to obtain competency or to engage with co-counsel, then withdrawal would most likely be warranted and possibly required.”