Bressler Risk Blog

“Ex-ArentFox client claims law firm secretly prepared to sue it on rival’s behalf” —

• “A government contractor has sued its former counsel at U.S. law firm ArentFox Schiff, alleging the firm failed to disclose that it was preparing a lawsuit against it on behalf of one of the contractor’s business rivals.”
• “Peraton, a contractor owned by private-equity firm Veritas Capital, alleged that ArentFox secretly fed information about it to CACI International, another ArentFox client. ArentFox used that information to help prepare a lawsuit against Peraton on behalf of CACI, Peraton alleged.”
• “The law firm shot back against Peraton’s claims in a statement, saying the government contractor ‘knowingly consented to the firm pursuing litigation against it.'”
• “It added, ‘Peraton is a sophisticated company whose own general counsel signed the consent on its behalf.'”
• “ArentFox and Brand represented Peraton in licensing and sponsorship deals, netting the firm nearly $500,000 fees. Meanwhile, ArentFox was representing CACI in a trade secrets lawsuit in Virginia state court against two of CACI’s former employees, the Peraton lawsuit alleged.”
• “Peraton alleged that ArentFox came to it with a conflict waiver under the pretense that the law firm was being served with a subpoena.”
• “‘Had Peraton known that Arent Fox wanted permission to investigate legal claims against Peraton, sue Peraton, disclose its confidential information to CACI, or participate in a government inquiry against Peraton, then Peraton never would have consented to such a waiver,’ the lawsuit said.”
• “Peraton signed off on the waiver in July 2022 and obtained a protective order that would limit the disclosure of its sensitive business information to ArentFox lawyers, not CACI. The lawsuit alleged that ArentFox had the order modified so that a pair of CACI executives could see the information from Peraton. ArentFox in its statement said it ‘certainly did not misuse any confidential Peraton information.'”

Follow up on this story: “Opioid Special Master Who Hit ‘Reply All’ Protected by Judicial Deliberative Privilege, Judge Rules” —

• “A federal judge, invoking a judicial privilege to freely deliberate on matters, refused to disqualify the special master in the opioid multidistrict litigation.”
• “In a Tuesday order, U.S. District Judge Dan Polster rejected a motion filed last month by two pharmacy benefit managers to disqualify David Cohen after the special master inadvertently sent an email to lawyers in the case. Cohen, who meant to send the email to himself, has been a special master in the opioid multidistrict litigation since 2018.”
• “Polster sided with the plaintiffs’ executive committee in concluding that the email falls under the judicial deliberative privilege, which protects confidential communications among judges and their staff.”
• “‘Special Master Cohen’s email, which consisted entirely of his own mental impressions, personal notes, and private musings about the submitted status reports, was unquestionably a privileged judicial deliberative memorandum to himself,’ Polster, who sits in the Northern District of Ohio, ruled.”
• “He added, ‘For the judicial system to function, judges must view the arguments presented to them with an appropriate degree of skepticism. If judges were subject to accusations of bias and potential disqualification based solely on private, skeptical thought about a party’s position, there could be no judges.'”
• “Polster questioned the motivations behind the disqualification motion, in which the pharmacy benefit managers ‘repeatedly and misleadingly attempt to convert the Special Master’s private thoughts into public comments.’ Such actions, he wrote, did not follow the standards of professional conduct outlined in his protective order.”
• “In a footnote, he added: ‘The court also notes that, were the email from opposing counsel rather than the Special Master, and the PBMs responded that not only would they not allow counsel to claw back their inadvertent disclosure but intended to use it to attempt to gain some tactical advantage in litigation, such conduct could be the subject of a motion for sanctions.'”

“Citing Conflicts as Merger Looms, Former SDNY Judge Leaves Stroock for Boies Schiller” —

• “While Stroock & Stroock & Lavan plots a potential merger with Pillsbury Winthrop Shaw Pittman, a former New York federal judge of 22 years isn’t hanging around to find out how the tie-up might affect her practice.”
• “Boies Schiller Flexner on Friday morning announced the hiring of former U.S. District Court Judge Shira Scheindlin, who arrives at the firm’s New York office as of counsel after seven years at Stroock.”
• “Since moving to private practice, Scheindlin has practiced as a neutral in mediations and arbitrations as well as a court-appointed special master, mock trial and appellate judge, and expert witness.”
• “In an interview, Scheindlin said she had been ‘very happy’ at Stroock, but was already having to decline nearly a third of incoming inquiries due to conflicts with the Big Law firm’s numerous institutional clients. “I know their intention is to merge with a bigger firm, so that would just increase the number of institutional clients and the number of conflicts, which would not be good for me,” she said.”
• “In contrast, Boies Schiller’s exclusive focus on litigation presented fewer conflicts and an opportunity to contribute to investigations, mock trial work and criminal defense work, Scheindlin said. ‘It was an opportunity that couldn’t be missed,’ said Scheindlin. ‘That means this is the right firm for me at the right time.'”
• ‘The pandemic has only accelerated the growth of alternative dispute resolution, Scheindlin said. ‘Parties often put arbitration clauses in their agreements, in those clauses they have to mediate before they arbitrate,’ she said. ‘I know it’s an expanding field at all times, especially in the commercial context, and I do mostly commercial arbitrations and mediations.'”

“US SEC sues auditor Prager Metis over alleged independence violations” —

• “The U.S. Securities and Exchange Commission on Friday sued accounting firm Prager Metis for alleged auditor independence violations related to a template it used when signing on clients.”
• “Between December 2017 and October 2020, Prager Metis improperly added indemnification provisions to engagement letters to clients for more than 200 audits and other work, the SEC said. This prevented the firm from having the independence required by law, it said.”
• “‘These allegations arise solely from template indemnification language used several years ago that was never enforced or sought to be enforced, and the SEC does not allege this language affected the quality of our audits,’ the [Prager] statement said. ‘Prager takes its independence obligations seriously.'”
• “Prager Metis continued to sign engagement letters with those provisions even after firm staff were aware of the issue, the SEC said.”
• “Prager Metis was one of the auditors for the FTX Group, according to a court filing. The SEC’s allegations do not relate to the FTX matter”

“Judge Boosts Damages, Sanctions Quinn Emanuel In Patent Case” —

• “NortonLifeLock Inc. must pay Columbia University $481 million and cover some of the university’s attorneys’ fees after a Virginia federal judge more than doubled a jury’s award for patent infringement damages and held in civil contempt Norton’s lawyers at Quinn Emanuel Urquhart & Sullivan LLP.”
• “Judge M. Hannah Lauck of the US District Court for the Eastern District of Virginia ordered the attorneys’ fees as a sanction after the law firm allegedly failed to follow her order regarding a perceived conflict of interest in the firm’s representation of both Norton and a key witness.”
• “Lauck sealed opinions explaining her orders until Oct. 12 to give both sides a chance to redact confidential information. She also gave them 30 days to reach a stipulation on the attorneys’ fees award.”
• “In May 2022, a jury determined that NortonLifeLock—formerly known as Symantec Corp. and currently doing business as Gen Digital Inc.—willfully infringed patented technology involving computer security and intrusion detection software developed by researchers at Columbia University in New York City.”
• “Before trial, Lauck ordered Quinn Emanuel to provide written descriptions of information it obtained from French researcher Marc Dacier, a former top Symantec executive, during the time the law firm represented both Dacier and Norton from 2017 through 2020, according to court documents.”
• “In court filings, the lawyers explained they arranged for Dacier to give a deposition in Europe that wouldn’t have otherwise taken place because he’d already left the company. But Norton and its lawyers stressed they didn’t control Dacier, who they claimed was unwilling to travel from his current home in Saudi Arabia to testify at the US trial.”
• “Quinn Emanuel initially cited attorney-client privilege in refusing to comply with Lauck’s order to disclose Dacier’s communications. But the firm subsequently provided a summary of information Dacier shared, and jurors were shown Dacier’s videotaped deposition.”
• “Columbia accused Norton and Quinn Emanuel of preventing Dacier from testifying live and lying that he was ‘unavailable,’ arguing they knew his views hurt Norton’s case, according to a filing by the university. Lauck agreed and called Quinn Emanuel’s simultaneous representation of Norton and a key adverse witness an ‘appalling’ conflict of interest, according to court records. She gave jurors a ‘missing witness’ instruction, which let them assume Dacier’s testimony would’ve harmed Norton’s defense.”
• “‘Quinn Emanuel respectfully disagrees with the district court’s finding and will be making our legal response in due course,’ the firm said in a statement.”

“Rio Vista council rejects city law firm representing Flannery Associates” —

• “Rio Vista’s [California] City Council voted against consenting to the law firm who represents the city also working for Flannery Associates LLC, the company buying thousands of acres of land in Solano County to build a new city.”
• “The decision comes after the law firm Kronick, Moskovitz, Tiedemann and Girard has worked with the city for a decade, but asked city leaders to also work with Flannery Associates to help arrange and document the water supply for the project.”
• “The controversial group secretly bought up over 50,000 acres of land since 2017 to build a new city in Solano County. The land is mostly in and around Rio Vista and Travis Air Force Base, making Flannery Associates the largest land owner in the county.”
• “Rio Vista residents opposed any sort of arrangements because of the conflict of interest, and not seeing any benefit of giving Flannery Associates influence over the local water supply.”
• “A representative with a law firm says they brought this to city leaders because of conflict of interest in the future. But added this would be a benefit for the city as they have a familiar face to work with when speaking with Flannery Associates.”

For more general background on this one, see: “Who is behind Flannery Associates, the mystery California land buyers?“

“Former lawyer cannot represent his wife in personal injury case, says NS Supreme Court” —

• “The Nova Scotia Supreme Court has refused to allow a former barrister to represent his wife in a personal injury lawsuit.”
• “The defendant in the action, Fenwick Holdings Limited, motioned to remove William as Margaret’s representative. Fenwick argued that William was in a conflict of interest and could not represent Margaret. Fenwick also asserted that as William is the plaintiff’s husband, he has a financial interest in the outcome of the litigation. He was also a fact witness to the plaintiff’s fall, and consequently, he will have made observations relevant to the plaintiff’s damages claim. Fenwick argued that a lawyer cannot be a witness and counsel in the same proceeding.”
• “The plaintiff, Margaret, argued that William was representing her in a personal or private capacity. She contended that discharging him would deprive her of her choice of counsel and would impose time and monetary penalties on her. She argued that it would be difficult and counterproductive to represent her claim without William’s legal training and that hiring outside counsel would be expensive.”
• “The Nova Scotia Supreme Court ultimately ruled that William failed to meet the statutory requirements to be eligible to practise law in the province. The court noted that he resigned from the Society in 2010 and has not been a member since. The court pointed out that even if he was not acting for a fee, he stood to receive indirect compensation, considering that the plaintiff is his wife and any monetary award she might receive would be of joint benefit.”
• “The court further explained that the relationship between William and the plaintiff may give rise to a conflict of interest based on s. 34 of the Code of Conduct, which requires lawyers to avoid conflicts of interest. The Society noted that a conflict may arise when ‘A lawyer has a sexual or close personal relationship with a client. Such a relationship may conflict with the lawyer’s duty to provide objective, disinterested professional advice to the client.'”
• “In addition to the potential conflict based on his relationship with the plaintiff, the court found that Jodan was potentially in a conflict based on his connection to the substantive issues at trial. The court explained that Jordan had recorded observations about the impact of the plaintiff’s injuries on many aspects of her health. He had sworn to those observations in an affidavit and recorded extensive detailed observations in a ‘pain diary.’ The court emphasized the common law prohibition against allowing a lawyer to appear as a witness while acting as counsel.”

“The Lawyers Sam Bankman-Fried Once Trusted Are Drawing Criticism” —

• “Mr. Bankman-Fried and his allies have blasted Sullivan & Cromwell, the New York law firm managing FTX’s bankruptcy, for its tangled relationship with the crypto exchange.”
• “Just before FTX collapsed in November, one of its outside lawyers at the law firm Sullivan & Cromwell emailed a colleague at another firm, insisting that the cryptocurrency exchange’s finances were stable.”
• “Four days later, FTX filed for bankruptcy. Mr. Dietderich quickly arranged for Sam Bankman-Fried, the exchange’s founder, to step down so that a new chief executive, John Jay Ray III, a specialist in corporate turnarounds, could lead the company. When Mr. Ray needed lawyers to manage the bankruptcy, a lucrative assignment, he asked a judge to appoint the same ones who had helped get him the job: Sullivan & Cromwell.”
• “Now, with Mr. Bankman-Fried set to go on trial next month on fraud charges stemming from FTX’s failure, Sullivan & Cromwell’s tangled history with the exchange is drawing scrutiny — especially from Mr. Bankman-Fried’s lawyers and family.”
• “For months, Mr. Bankman-Fried has attacked Sullivan & Cromwell in court papers and on social media, arguing that the firm’s lawyers set him up as the fall guy for FTX’s implosion while downplaying their own involvement with the exchange. The dispute became even more personal this week when FTX sued Mr. Bankman-Fried’s parents, seeking to claw back millions of dollars and claiming the exchange had operated like a ‘family business.'”
• “A spokesman for FTX said Mr. Bankman-Fried’s claims were ‘a biased story line’ intended to unfairly blame the professionals trying to recover money. A representative for Sullivan & Cromwell declined to comment. In court, the law firm has said that FTX was never a ‘regular client,’ and that the firm had put in place procedures to guard against conflicts of interest during the bankruptcy.”
• “In January, the U.S. trustee assigned to FTX’s bankruptcy raised the prospect of removing Sullivan & Cromwell from the case, citing its failure to disclose all of its past work for FTX. Around the same time, four U.S. senators released a letter arguing that Sullivan & Cromwell had a conflict of interest because the firm might bear some responsibility for FTX’s failure. But the trustee backed down after the firm made a more detailed disclosure, and a judge allowed the lawyers to continue overseeing the bankruptcy, saying he saw ‘no evidence of any actual conflict.'”
• “Mr. Bankman-Fried has remained fixated on Sullivan & Cromwell. His lawyers have argued that the firm is providing evidence to the prosecutors that reflects poorly on Mr. Bankman-Fried, while withholding material that could help the defense. Prosecutors have denied that claim, writing in court papers that FTX and its lawyers ‘have been responding to the government’s document requests voluntarily.'”
• “Rebecca Roiphe, a former prosecutor and a professor at New York Law School, said it was fair to raise questions about potential conflicts of interest when a law firm represented a company both before and during a government investigation that might involve related work. ‘But this is not uncommon and doesn’t necessarily prove wrongdoing,’ she said.”

“Law Society of Scotland rejects proposals for a single UK-wide anti-money laundering supervisor” —

• “The Law Society of Scotland has rejected proposals for a single UK-wide anti-money laundering (AML) supervisor, saying a one-size fits all approach would be a ‘regressive step’ in efforts to combat economic crime.”
• “The Law Society has said a number of proposals in the HM Treasury consultation on the future of the anti-money laundering and counter-terrorism financing supervisory regime, risk damaging progress already achieved and could also fail to meet its stated aims of increased system effectiveness, system co-ordination and feasibility.”
• “The Society has expressed support for further powers to be given to the Office of Professional Body AML Supervision (OPBAS), if those powers would lead to increased effectiveness, and does not oppose reform consolidating anti-money laundering supervision on a devolved basis.”
• “Graham Mackenzie, Head of AML at the Law Society of Scotland, said: ‘We fully support change that will enhance the current AML regime and support the UK’s economic crime plan. It is, however, crucial that any reform introduced does not interfere with the independence of the legal profession, and also recognises the distinct legal and regulatory frameworks which exist across the devolved nations.'”

“How PwC failed to identify or deal with tax leaks scandal” —

• “Legal inquiries ordered by PwC Australia into its tax leaks scandal found a ‘combination of multiple failings’ by individuals and the firm’s governance, culture and accountability systems.”
• “A summary of reviews by law firms King & Wood Mallesons, Allens and Linklaters concluded that the scandal – which has rocked PwC’s local operation and heightened scrutiny of the multibillion-dollar consulting sector – was due to a litany of shortcomings and missed opportunities to address problems earlier.”
• “The tax leaks issues date back to 2013, when former international tax partner Peter Collins triggered the scandal. Mr Collins shared confidential tax information with PwC personnel who used it to help clients sidestep Multinational Anti Avoidance Laws he was helping Treasury develop.”
• “‘There is no single answer to the question of why the breaches of confidentiality and conflicts occurred and were not discovered and addressed earlier. Rather, it appears to be the result of a combination of multiple failings as well as missed opportunities to address the issues at an earlier point in time,’ it says.”
• “There was a ‘failure of individuals to identify and mitigate potential conflicts of interest’ inherent in the firm providing advice on how to create tax laws while also providing advice to clients on how to respond to the same laws.”
• “‘Fundamentally, the confidentiality breaches occurred due to PwC Australia’s failure to recognise and take steps to mitigate the inherent conflict of interest that existed from PwC Australia advising Treasury on the implementation of tax legislation while, at the same time, assisting clients to structure their business operations to comply with the new laws,’ it states.”
• “Macquarie Business School Emeritus Professor James Guthrie said the report released did not take into account information that was not publicly available. ‘It has taken a decade for PwC Australia to admit its internal failings concerning governance structure and risk management in public,’ he said.”

For more, see: “How confidential tax information was shared at PwC.“

“Walgreens Fight Against its Former Firm Crowell Gets Early Win” —

• “Walgreens Boots Alliance Inc. earned a victory with an appeals court advancing its claim that a health insurer improperly helped the retailer’s former law firm, Crowell & Moring, break its fiduciary duty.”
• “Walgreens in 2022 claimed that Health Care Services Corp. helped Crowell breach its fiduciary duty by retaining the law firm for a case involving a prescription drug program Crowell once advised Walgreens on.”
• “Health Care Services Corp., represented by lawyers from Crowell, in 2021 sued Walgreens for alleged fraud, claiming that the retailer artificially inflated prices for its members and caused hundreds of millions of dollars in excess reimbursements.”
• “Walgreens argued in a counterclaim that advice Crowell gave to Walgreens more than a decade prior should have precluded the firm from representing the insurer. Health Care Services willfully aided the ethics breach by continuing to retain the firm, Walgreens argued.”
• “A trial court last December dismissed the suit, calling it ‘nothing more than a motion to disqualify’ Crowell from representing the insurer. But the appeals court found Walgreens pled ‘sufficient facts’ regarding Crowell’s alleged conflict for the case to proceed. The case now goes back to a Cook County Circuit Court for further proceedings.”

“Beijing-owned businesses using Australian law firms to advise on takeovers of critical projects” —

• “Chinese state-owned enterprises are using Australian law firms to advise on takeovers of critical local infrastructure and minerals projects according to a new report that exposes potential conflicts with other sensitive work the same companies complete at home.”
• “The research also warns confidential client files held here could be accessed by authorities in Beijing, and controversially calls for Australia’s Foreign Influence Transparency Scheme (FITS) to be adjusted to remove exemptions for ‘legal advice or representation.'”
• “‘Law firms operating in Australia acting for PRC [People’s Republic of China] entities simultaneously fulfil engagements for Australian government entities, including those responsible for national security and foreign policy,’ the report stated.”
• “One of the report’s authors, Canberra-based cyber security expert Robert Potter, said some of the larger law firms they studied are completing sensitive Defence Department work while at the same time advising PRC-controlled companies.”
• “Mr Potter warned firms were advising on things ‘as sensitive as government platform procurement,’ while using the same email servers to handle Chinese state-owned customers, without ‘any of what we would expect in terms of technical separation of their infrastructure.'”
• “‘We’ve looked at the law firms in terms of their level of potential risk for exposing government data from Australia externally through what we can see as less than optimal cyber security practices on their systems,’ he said.”
• “The report also examined risks associated with how quickly Australian law firms were growing their Chinese business and “the degree to which they’re going beyond providing legal services”, including promoting causes such as Beijing’s ‘Belt and Road’ policy and semi-conductor industry.”
• “One of the Australian legal firms documented in the study is global company Ashurst, which completes Defence Department work while also representing Huawei locally, despite the federal government deeming the Chinese telco a ‘high risk’ vendor.”
• “An Ashurst spokesperson told the ABC it wasn’t able to comment on individual clients, but ‘takes compliance with law and client requirements seriously, and has stringent systems and controls in place to assess risk, manage conflicts and safeguard client confidentiality.'”
• “King & Wood Mallesons (KWM) is found to be “the second most represented law firm operating in Australia servicing PRC state-owned enterprises”, with the report highlighting its work with Hong Kong’s ‘Renminbi internationalisation’ and ‘Belt and Road’ initiatives.”
• “‘Our Swiss Verein structure enables us to operate as an international firm while maintaining separate local partnerships (KWM Australia, KWM China and KWM Hong Kong),’ a KWM Australia spokesperson told the ABC. ‘”We have separation of IT systems between KWM Australia and other parts of the KWM network. We take our legal and fiduciary duties seriously and use robust conflict checking systems and business acceptance protocols.'”
• “Shadow Home Affairs and Cyber Security Minister James Patterson said it was a shocking report.”

Cassie Hanson, conflicts and ethics counsel at Fredrikson & Byron, P.A., produced this excellent analysis: “Quandaries & Quagmires: Advance waivers: Lessons from Paul Hastings vs. Coca Cola” —

• “This summer, ethics took center stage in a conflict-of-interest row between Big Law and corporate behemoth Coca-Cola. As ethics counsel, I followed the developments with curiosity as the drama played out in unusually public fashion and was widely covered in legal news. The dispute highlighted the enforceability of advance waivers.”
• “The court held the advance waiver was enforceable and issued a no-nonsense order that is a useful reminder about best practices for law firms utilizing advance waivers.”
• “How does an advance waiver meet the ‘informed consent’ standard? Rule 1.0(e) defines informed consent as “the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.” This means the lawyer must make a full and effective disclosure of all of the relevant facts, including material advantages and disadvantages of the proposed representation, and provide reasonable alternatives, which is usually hiring or consulting with other counsel.”
• “In concluding that Coca-Cola gave informed consent by signing the waiver, the court held that the advance waiver was clearly enforceable; it ticked all of the boxes for informing Coca-Cola about the material risks of signing the waiver and that it should seek advice of independent counsel before agreeing to the waiver. Coca-Cola’s counterargument — that the advance waiver was ‘open-ended boilerplate’ and ‘unenforceable’ — did not move the needle with the court.”
• “What is to be learned from the fallout with Paul Hastings and Coca-Cola? Advance waivers are not a silver bullet, and law firms should not be overconfident in their reliance upon them. Advance waivers are subject to ethical and legal standards that vary by jurisdiction, and their enforceability may depend on a range of factors, including the clarity of the waiver and the specific circumstances of the case. Importantly, there are limits to the enforceability of advance waivers and some jurisdictions have held them to be unenforceable.”
• “Law firms should be more wary of employing advance waivers with individuals or small companies who are not sophisticated actors. Reliance on an advance waiver in direct adversity situations like litigation always brings higher risk.”
• “After understanding the limits and risks involved with advance waivers, there are common sense things a law firm can do to make an advance waiver more likely to stand up to judicial scrutiny:
  • Spend time constructing an advance waiver specific to the client to avoid accusations of using unenforceable, boilerplate terms.
  • Describe any existing or presenting foreseen conflicts that are known at the time of retention and define what will and will not be considered unrelated matters. Make sure that you have other clients’ consent to make such disclosures if it involves identifying the representation of a specific client such as a competitor. A good work-around is to use categories of clients that may be adverse to the specific client.
  • Expressly address potential risks to confidentiality, even if circumstances are such that the material risk of adverse disclosure or use of confidential client information is low.
  • Discuss client specific risks to loyalty such as representation of clients that may have adverse business interests to the client, such as competitors.
  • Do not ask for more than what is required of the client. If you are engaged primarily in transactional matters, including litigation within the scope of the advance waiver makes it more unlikely to be accepted by a client. Some business clients have outside counsel guidelines (“OCGs”) prohibiting acceptance of advance waivers. Including litigation makes it more likely to be rejected by in-house counsel. Interestingly, Coca-Cola had OCGs that prohibited advance waivers and argued its OCGs superseded the advance waiver. The court covered it in a passing footnote and gave it no credence. Despite the court’s lax treatment of this issue, OCGs can present a total bar to a law firm’s use of an advance waiver. Limiting the scope to transactional matters in the future makes it more likely to be signed in these circumstances.
• “Recommend that the client seek the advice of independent counsel and give adequate time for the client’s consideration of the advance waiver prior to signing. “[G]enerally a client or other person who is independently represented by other counsel in giving the consent should be assumed to have given informed consent.” Cmt. 6 to Rule 1.0. Where possible, draft an advance waiver for signature by the client’s in-house counsel as they have an independent obligation to inform the organization of all of the relevant information and risks associated with the waiver.”
• “Elephant in the room? After dissecting all of the media coverage and the court’s order denying disqualification, I am left with a nagging question. Did a premier law firm like Paul Hastings really miss the ball on its lateral screening or did it believe that reliance on its advance waiver would survive a disqualification motion? The latter seems more plausible and presents an off-putting possibility for prospective clients of Paul Hastings. Clients may think twice about hiring a law firm that sets aside its clients with such calculation. The media attention garnered by this spat resulted in unwarranted attention for Paul Hastings and the fallout serves as a due diligence cautionary tale for other law firms to spend adequate time screening for potential conflicts-of-interest, especially active litigation conflicts.”

“Bar associations are stifling innovation and driving up costs, report says” —

• “State courts should strip bar associations of some regulatory functions to spur innovation and lower the cost of legal services, according to a new paper from a Stanford Law center.”
• “State bar associations have a conflict of interest in their oversight of who is allowed to provide legal services, because most of the organizations also represent the professional interests of lawyers, according to the paper, released Monday by Stanford Law’s Deborah L. Rhode Center on the Legal Profession.”
• “Shifting some of their regulatory responsibilities to lawmakers or newly created entities would allow bar associations to focus squarely on the oversight of lawyers and open the door to non-traditional and lower cost legal services providers, according to the paper, authored by Rhode Center Executive Director Lucy Ricca and Thomas Clarke, a former administrator with the National Center for State Courts.”
• “The report offers five different options of how state courts can restructure legal practice regulation to minimize bar associations’ conflicts of interest and bolster innovation.”
• “The least dramatic proposed change involves leaving state bars in charge of regulation but expanding the types of entities allowed to operate to include legal paraprofessionals or legal services entities. A bigger possible change would be to task state lawmakers with the regulation of legal service providers while leaving lawyer regulation to bar associations or creating new entities to oversee any non-lawyer legal services.”
• “‘This is a significant challenge but not an impossible one,’ the paper reads.”

“At Oral Argument, Law Firm Says It Didn’t Violate Client’s Privacy With Press Release Announcing Med Mal Verdict” —

• “At oral arguments Thursday, the Illinois Supreme Court mulled whether a Chicago plaintiffs law firm’s press release announcing a $4.2 million jury award in a medical malpractice suit violated the Mental Health and Developmental Disabilities Confidentiality Act by disclosing the details of its now-former client’s mental health diagnoses.”
• “The Illinois high court is now set to decide whether the appellate court was correct in finding that attorney Elizabeth A. Kaveny and her former firm Burke Wise Morrissey & Kaveny violated the act by redisclosing information pertaining to the plaintiff, identified in the current matter as John Doe, that was protected by Health Insurance Portability and Accountability Act of 1996 (HIPAA).”
• “‘Once plaintiff put his entire mental health history into the record at that medical malpractice trial, it ceased to be confidential information,’ Kimberly A. Jansen, a partner at Hinshaw & Culbertson in Chicago, argued on behalf the law firm Thursday. ‘We all know trials are public. Nothing in that medical malpractice case was sealed.'”
• “But Doe challenged the use of and information of his diagnoses, the suicide attempt, and the effects of his injuries and that the ‘redisclosure of that information to the press’ violated confidentiality. He claims that the defendants went “well beyond simply confirming” the outcome of the medical malpractice litigation, but also included ‘highly personal medical and mental health care information,’ according to the plaintiff’s brief by counsel, Thomas M. Paris, a solo practitioner.”

“Yelp wants Google’s lawyers tossed from US antitrust case” —

• “Yelp and a coalition of news organizations have asked a U.S. judge to disqualify a prominent U.S. law firm from defending Google (GOOGL.O) in the Justice Department’s ad tech lawsuit, saying the firm has a conflict of interest because it previously was their advocate on matters related to the case.”
• “Yelp and News/Media Alliance, which are not defendants in the litigation but are targets of Google’s subpoenas, argue that law firm Paul, Weiss, Rifkind, Wharton & Garrison should be disqualified.”
• “Google has subpoenaed service-recommendation site Yelp and the alliance for information to challenge claims it has abused its market dominance for web advertising.”
• “‘This case involves a major law firm switching sides against former clients’ to represent an alleged monopolist, attorneys for Yelp and the media group told U.S. District Judge Leonie Brinkema on Friday.”
• “A spokesperson for Paul Weiss said the ‘firm’s representation of Google is appropriate in all respects.'”
• “Yelp said it hired Paul Weiss in 2016 for counsel on antitrust issues. The Justice Department’s antitrust head, Jonathan Kanter, was on the Paul Weiss team representing Yelp.”
• “Google is also seeking information about Yelp’s engagement letters, invoices and bills related to its Paul Weiss ties.”
• “This month, Brinkema refused a request from Google to block Kanter from leading the case. Google argued Kanter should be barred based on his work in private practice for Yelp and other Google critics.”

“Judge assigned to US antitrust case against Amazon recuses himself” —

• “The judge assigned to the US Federal Trade Commission’s antitrust lawsuit against Amazon.com has recused himself from the case, according to a court document filed on Wednesday.”
• “Senior Judge John Coughenour was assigned to the case on Tuesday, when the antitrust lawsuit was filed against Amazon in federal court in Seattle. Coughenour, an appointee of Republican former President Ronald Reagan, did not cite a reason for dropping off the case in the court filing.”
• “The FTC in its lawsuit accused Amazon of abusing its power in the retail market as an ecommerce giant by unfairly giving preference to its own products and punishing merchants that want to sell products for lower prices on other platforms.”

“Convera Denies Western Union’s Claims Of Atty Conflict” —

• “Convera Bidco Ltd. is urging a Delaware vice chancellor to reject Western Union’s attempt to block Convera’s in-house attorneys and counsel from Skadden Arps Meagher & Flom LLP from representing it in litigation over its purchase of Western Union’s business-to-business global payments services, arguing the financial services giant hasn’t shown there’s a disqualifying conflict.”
• “In a filing Monday [9/18], Convera told Vice Chancellor Nathan A. Cook that The Western Union Co.’s request to have Convera’s Chief Legal Officer Brendan Clegg, other in-house attorneys and attorneys from Skadden disqualified from representing the company in the Chancery Court case “falls short” of the standard to warrant such action.”
• “Western Union has failed to ‘offer clear and convincing evidence that this litigation is sufficiently related to Mr. Clegg’s prior work for WU such that Mr. Clegg is conflicted,’ the company says.”
• “Clegg ‘expressly denies having any confidential WU information that would be relevant here (or disclosing any confidential WU information of any kind to anyone),’ the filing says.”
• “Convera says it’s ‘no surprise,’ as the “substantive issues in dispute in this case” arose after Clegg became its chief legal officer.”
• “Last month, Western Union motioned to have Clegg, other Convera in-house attorneys and Skadden be disqualified from representing Convera in a contractual dispute over capital reserve payments connected with its $910 million purchase of Western Union’s business-to-business global payments services in 2021.”
• “Western Union’s motion asserted that there is a conflict of interest involving Clegg, who was formerly its in-house counsel and led its efforts in ‘developing, negotiating and drafting the provisions at the center of this litigation.'”
• “‘Eight months later he switched sides, becoming Convera’s chief legal officer,’ Western Union said. ‘Clegg is directing Convera’s effort, including its outside counsel, in challenging WU’s interpretation of the very provisions he helped negotiate.'”
• “‘Notwithstanding WU’s repeated requests, Convera has refused to screen Clegg, causing his conflict to infect and taint the rest of Convera’s legal team as well as its outside counsel at Skadden Arps Slate Meagher & Flom LLP,’ Western Union says. ‘Their disqualification is likewise required.'”
• “But in its opposition Monday, Convera argues the work Clegg did before he left Western Union related to the purchase agreement at issue didn’t involve advising on its ‘salient provisions,’ nor did that work ‘expose him to any relevant confidential information.'”