Bressler Risk Blog

“Judge refuses to disqualify leading opponents of J&J’s talc bankruptcy plan” —

• “A New Jersey judge on Friday rebuffed Johnson & Johnson’s bid to disqualify the law firm Beasley Allen from representing plaintiffs claiming they got cancer from the company’s talc, a setback for the company as it tries to resolve more than 60,000 such claims for $6.48 billion through a pre-packaged bankruptcy plan.”
• “Judge John Porto of the New Jersey Superior Court ruled that J&J had not presented ‘any credible basis’ for its claims that Beasley Allen partner Andy Birchfield formed an unethical alliance with one of the company’s former lawyers.”
• “Also on Friday, U.S. Magistrate Judge Rukhsanah Singh, who is overseeing talc cases pending in New Jersey federal court, ordered J&J to show cause why she should not adopt Porto’s findings as well as she considers a parallel motion to disqualify the firm from the federal cases.”
• “Erik Haas, J&J’s worldwide vice president of litigation, in a statement said that the company ‘will appeal the trial court’s ruling that it is not an ethical violation for plaintiffs’ counsel to knowingly and surreptitiously collaborate with defendants’ former counsel on the same matter, same claims and same issues that the former counsel represented the defendants.'”
• “In its December motions to disqualify Beasley Allen, J&J claimed that Birchfield acted unethically by working with former Faegre Drinker Biddle & Reath partner James Conlan, who worked on the talc litigation for the company for about two years before leaving legal practice in 2022, to propose an out-of-bankruptcy settlement. The company said Conlan must have disclosed confidential information, but Porto said there was no evidence for that.”
• “J&J has denied plaintiffs’ claims that its talc is tainted with cancer-causing asbestos, saying the product is safe.”

“After controversy, judge in Musk pay case allows Delaware prof to file disputed brief” —

• “It cost him a lucrative law firm consulting gig, but a retired Delaware law professor won the right on Monday to argue against Tesla’s attempt to bypass a court decision invalidating CEO Elon Musk’s $56 billion pay package.”
• “Charles Elson, a longtime corporate governance expert from the University of Delaware, will be allowed to participate as an amicus, Chancellor Kathaleen McCormick of Delaware Chancery Court ruled. The judge is weighing the impact of Tesla’s shareholder vote last month to approve a pay package that the judge invalidated in January.”
• “Tesla, as you may recall, went to unusual lengths to try to block Elson from filing the brief back in May, before its shareholders voted on Musk’s pay.”
• “After Elson’s lawyer sent Tesla a draft of the brief, the company contacted the law firm Holland & Knight, where Elson was a longtime corporate governance consultant. Holland & Knight represents Tesla in at least two major employment cases. Tesla, according to Holland & Knight, alerted the law firm that Elson’s brief created a conflict because its consultant was taking a position contrary to Tesla’s.”
• “Holland & Knight, in turn, sent Elson an email that said Tesla had threatened to fire the firm if Elson filed the amicus brief.”
• “Elson opted to resign from his consulting job at Holland & Knight. He and his lawyer, Joel Fleming of Equity Litigation Group, subsequently told McCormick in court filings that Tesla had tried to “bully” Elson into abandoning the amicus brief by improperly pressuring Holland & Knight.”
• “Holland & Knight told me in May that Tesla did not try to pressure the firm but simply alerted partners about a potential conflict. The firm said its email to Elson describing Tesla’s threat to fire Holland & Knight was ‘incorrect’ and that it independently determined that Elson’s proposed brief ‘would be inconsistent with our obligations to our client.'”
• “Tesla also filed a formal opposition to Elson’s brief in the Chancery Court docket, denying that it leveraged its client relationship with Holland & Knight to squelch the filing.”
• “In Monday’s order, McCormick described Elson as ‘a leading authority on Delaware law’ whose previous amicus brief in the Musk pay case was cited in her January opinion. The judge also refuted Tesla’s argument that Elson’s brief was premature, pointing out that Tesla had already argued in an April 17 letter to the court that the upcoming shareholder vote was likely to impact the case.”
• “McCormick did not address the Holland & Knight controversy, though she brushed aside Tesla’s assertion that Elson had an improper motive for filing the proposed brief in May.”

More analysis and commentary on the Enviva matter, noted previously: “Private equity lawyers wince after bankruptcy court ruling” —

• “It is the assignment Vinson & Elkins never hoped would arise but the one where its client needed the powerhouse law firm the most. For a federal judge, however, just figuring out who the ‘client’ is has proved no simple task.”
• “Enviva, a once highly touted clean energy company, filed for bankruptcy in March citing nearly $2bn of debts to be restructured. Enviva selected V&E as its debtor counsel to take it through the court case. By the time of the bankruptcy petition, the company had struck a settlement with a majority of creditors.”
• “[Judge] Kenney said V&E could not meet the ‘disinterestedness’ standard of the bankruptcy code. His hang-up: V&E also happened to be a long-standing adviser to Riverstone, the key private equity backer of Enviva. Riverstone was responsible for $14mn or around 1 per cent of the law firm’s 2023 gross revenue, though it is using a separate firm in the Enviva chapter 11.”
• “His ruling has shocked restructuring practitioners. Bankruptcy judges have for years waved through law firms that had tight bonds with both private equity firms and debtors, afraid to rock the boat. American companies can essentially select the bankruptcy court in which they wish to appear, and judges who are not user-friendly to the major debtor law firms can get blackballed. But future judges facing a law firm retention issue are likely to take notice of this ruling.”
• “Kenney, earlier in the case, had broached the idea of creating an ‘ethical wall’ at V&E. The firm immediately dismissed that as impractical and unnecessary. After an initial ruling, rejecting V&E’s retention, the firm came back with a convoluted proposal. It offered to segregate lawyers as exclusively dedicated either to Enviva or to Riverstone. Respective lawyers would not get allocated profit sharing at year’s end from the other client. A new board committee would supervise the Enviva reorganisation negotiations.”
• “After tartly pointing out that V&E’s original position was that no compromise was necessary, the judge rejected the ethical wall terms as inadequate to repair the underlying conflict. The US Trustee, a government group that represents the public interest in bankruptcy cases, had voiced its concerns about V&E. But interestingly, two major law firms, Davis Polk and Akin Gump, representing creditors urged the judge to keep the law firm, citing V&E’s deep familiarity with Enviva as well as the disruption from bringing in a newcomer.”
• “Law firms like Kirkland & Ellis, Weil, Gotshal and Paul, Weiss have built incredibly profitable businesses where their private equity practices simultaneously touch mergers and acquisitions, financings and restructurings. In messy cases, the risk is the firms could prioritise a long-term private equity relationship over cutting a fair deal for all parties. “
• “For years, debtors have tried to mitigate perceived conflicts through various procedural structures including the hiring of multiple law firms, independent directors and independent investigations. But practitioners in candid moments will admit that these protections often prove weak in bankruptcy cases where aggressive debtors’ counsel can ram through their preferred outcome.”
• “Sometimes the consequence is a restructuring where the private equity firm gets to keep a disproportionate stake in the reorganised company. Other times it is a deal where the private equity firm escapes liability for pre-petition wrongdoing. V&E told the judge, in court papers, that rejecting its retention application would upset a tacit understanding whereby debtors get wide berth to pick their advisers. Law firms may now decide to become pickier in selecting their clients.”

“NY lawyers can passively invest in ABSs, says city bar association” —

• “A New York lawyer may hold a financial interest in an alternative business structure (ABS) operating legally elsewhere, the city bar association has said.”
• “It is the latest in a series of ethics opinions from both New York and the American Bar Association on US lawyers’ involvement with ABSs.”
• “Non-lawyer ownership of law firms is prohibited in most of the US, except in Arizona (where there are currently 70 ABSs licensed), Utah and, to an extent, the District of Columbia – and opposition to them remains fierce.”
• “At the same time, several prominent US law firms have set up their London offices as separate businesses that are ABSs, even if they have not used it to take external investment.”
• “New York rules prohibit a lawyer from practising law in New York through an ABS, such as being the resident New York partner of an English ABS.”
• “But an opinion issued last week by the New York City Bar Association’s professional ethics committee said its rules did not prevent a member’s passive investment in an ABS, because they would not actually be practising law.

For those who are wondering, yes we’ll be running the risk (e.g. intake/conflicts/terms) staffing compensation survey again this year. More details on that soon. But in the meantime…

I’m pleased to take the wraps off of a new survey exercise: The 2024 IG Staffing Compensation Survey!

Over the past two years, we’ve had great response and success with the two risk-focused surveys (2023 saw 126 participants share data on 517 positions, as detailed here), that the IG community reached out asking for their chance. (Thank you to Leigh Zidwick and several other IG experts for their advice, input, and review of this effort as all the pieces came together!)

This survey looks to capture data on the broad range of law firm IG roles. So if you’re an individual contributor looking to understand how your comp compares to your peers, or you’re an IG manager looking to benchmark yourself + to keep your team (and potential new hires) on par with changing market standards, you don’t want to miss out.

SURVEY DETAILS:

• Participation open to law firm IG professionals only
• All responses will be treated confidentially
• Manager participants sharing data on their/their team’s roles and compensation will receive a report summarizing key findings across all roles and analysis relevant to their firm demographics
  • (The report may be shared internally within your firm, but not redistributed externally. So if you want the results, your best path is to participate!)
    
  • The survey includes an optional section collecting qualitative feedback from managers on IG staff hiring, budget, challenges, goals, investment plans and wishes, and other related matters. (While participation in this section is not required, if you’d like visibility into the feedback your peers provide, please share your perspectives here as well.)
• Individual contributor participants sharing personal compensation data will be receive a personal benchmark compensation summary relevant to their specific role and firm demographics.

The survey will be open for the next month or so and can be accessed here: 2024 IG Staffing Compensation Survey.

Feel free to share the link with law firm peers and colleagues — the greater the participation level, the better the results will be. So do pass along to colleagues at your firm and others, share on LinkedIn, remind your colleagues at ILTACON to join in, etc.

And if anyone has questions, please feel free to reach out to me directly. (Email readers can do that by just replying to this message in their inbox — it’ll reach me. Others can use the contact form.)

As I’ve said in the past, I like experiments. Let’s see what we learn from this one!

“Law Firm Can’t Represent Defendant Where Potential Adverse Witness Was Its Client” —

• “The Ninth U.S. Circuit Court of Appeals has affirmed the disqualification of a Bunker Hill law firm from defending a retired physician accused of participation, while practicing medicine in Orange County, in a multi-million dollar COVID-connected fraud scheme, holding that the attorneys’ previous representation of an alleged co-conspirator who might testify for the prosecution justifies the order.”
• “Under Tuesday’s decision in a memorandum opinion, the firm of Brown White & Osborn LLP (‘BWO’) is barred from providing further legal services to Matthew Hoang Ho, now a resident of Alabama and Florida, who is scheduled to go on trial July 23 in the U.S. District Court for the Central District of California. He is charged with submitting fraudulent loan applications for COVID-related relief programs, conspiracy to commit wire fraud, wire fraud, aiding and abetting wire fraud, money laundering, and aiding and abetting money laundering.”
• “For a short time after her indictment, BWO represented Hanna ‘Hang’ Trinh Dinh who pled guilty to conspiracy to commit wire fraud in connection with the alleged billing scam and was sentenced on Feb. 12 to one year and eight months in prison, followed by three years of probation, with seven months to be served in home confinement.”
• “She is the sister of defendant Anthony Hao Dinh, a medical doctor who is described by the U.S. Attorney’s Office for the Central District of California as ‘the second-highest biller in the country to the Health Resources and Services Administration COVID-19 Uninsured Program,’ accused of submitting false claims to the government.”
• “In light of BWO’s representation of Hanna Dinh and others who were purportedly implicated in a scheme to cheat the government, prosecutors contended in the District Court that the law firm must be forced to step aside based on conflicts of interest.”
• “There are no conflicts, Ken White, general counsel of BWO, insisted in response, pointing out that the firm had secured the necessary waivers by its clients. Those waivers, however, did not deter Senior Judge James Selna from ordering on Feb. 26 that BWO be parted from the case.”
• “With a narrowing of the focus to the link between Ho and Dinh, Selna explained: ‘Although BWO obtained waivers regarding potential conflicts from both Ho and H. Dinh, conflicts are often very difficult for even an experienced attorney, let alone his client, to appreciate given the fluidity of a criminal trial.'”
• “He declared that ‘the potential for an actual conflict to develop as the case progresses is serious,’ setting forth that the government might call Hanna Dinh as a witness ‘to testify about her knowledge of Ho’s activities in the conspiracy or at the very least the process the co-conspirators used” in perpetrating their alleged ruse.'”
• “Selna said that ‘[t]his would create an unethical situation where BWO would be faced with the choice of either exploiting its prior, privileged relationship with her or failing to defend Ho zealously for fear of misusing confidential information.'”
• “A Ninth Circuit panel [affirmed]: ‘[T]he district court did not clearly err as a matter of law when it disqualified BWO based on a finding of a ‘serious potential for conflict’ after the government listed Hanna as a witness whom it intends to call at Dr. Ho’s criminal trial. Dr. Ho and Hanna are co-defendants in the same alleged criminal conspiracy; the government alleges that they both worked with Hanna’s brother, Anthony, to submit fraudulent loan applications; and BWO previously represented Hanna concerning the same or substantially similar alleged criminal conduct…The district court did not clearly err when it found, based on these facts, that it is possible that BWO may have knowledge from Hanna that would be helpful to Dr. Ho, but cannot be used without violating BWO’s duty of loyalty and confidentiality to Hanna…'”

“New trial in murder case ordered over counsel’s conflict of interest” —

• “A defendant convicted of first-degree murder has been granted a new trial because his trial counsel labored under an actual conflict of interest.”
• “A jury convicted defendant Nathaniel Brown of first-degree murder on the theory of extreme atrocity or cruelty in connection with the stabbing death of Jordan Baskin. Following his conviction, represented by new counsel, the defendant filed a motion for a new trial, claiming two violations of his right to counsel under Article 12 of the Massachusetts Declaration of Rights.”
• “First, the defendant argued that his trial counsel failed to provide minimally effective representation before and during a police interview in which police acquired incriminating evidence later introduced at his trial.”
• “Second, the defendant claimed that his trial counsel suffered from a conflict of interest in her continued representation of him following the police interview, because filing a motion to suppress the resulting incriminating evidence on the ground of ineffective assistance of counsel would have been contrary to his trial counsel’s own interests.”
• “‘Finding no error of law or abuse of discretion in the motion judge’s conclusion that trial counsel labored under an actual conflict of interest in representing the defendant, we affirm the allowance of a new trial on this ground and do not reach the defendant’s other claimed art. 12 violation,’ Justice Elizabeth N. Dewar wrote for the SJC.”
• “‘In the circumstances of this case, ‘the probity’ of trial counsel’s ‘own conduct’ would be put ‘in serious question’ by the motion to suppress, where, amidst a homicide investigation, trial counsel failed to end the defendant’s police interview even after the defendant made statements to the police that counsel immediately recognized to be falsehoods, and the interview instead went on to yield additional inculpatory evidence,’ the SJC found.”
• “‘Yet trial counsel also had an obvious ‘competing interest’ of her own that ‘materially interfere[d] with [her] independent professional judgment in considering’ whether to file a motion to suppress on the defendant’s behalf: such a motion would inherently call into question her own professional competence.'”
• “‘For this reason, the motion judge correctly found that trial counsel’s own personal interests as a practicing attorney would materially interfere with her independent professional judgment in considering whether to file such a motion to suppress, and that, burdened by this actual conflict, she could not pursue any such motion with the ‘full force and zealousness’ we require of criminal defense counsel,’ Dewar wrote.”
• “‘Such a motion would, moreover, place trial counsel in the inherently ineffectual position of arguing to the court that she herself performed deficiently. … We therefore see no error in the motion judge’s conclusion that ‘no impartial observer could reasonably conclude that’ trial counsel would be ‘able to serve the defendant with undivided loyalty’ in the circumstances of this case,’ she added.”

“Lawyers for Musk’s X Corp kicked off data-scraping case” —

• “One of Elon Musk’s longtime law firms has been disqualified from representing his social media company X Corp in a lawsuit that accused Israeli data-scraping Bright Data Ltd of illegally copying content from the platform.”
• “U.S. District Judge William Alsup in San Francisco said in a ruling issued Friday, opens new tab that the lawsuit is factually and legally similar to a separate case that Facebook parent Meta Platforms Inc, opens new tab had brought against Bright Data, and that X’s law firm Quinn Emanuel Urquhart & Sullivan had advised Bright Data on that case.”
• “Quinn Emanuel ‘now attacks a former client whose on-point battleplan it helped create just over one year ago,’ Aslup said.”
• “‘We respectfully disagree with the ruling and are evaluating next steps,’ a Quinn Emanuel spokesperson said. The 1,000-lawyer litigation-focused firm has represented Musk and his companies in court cases involving the U.S. Securities and Exchange Commission and other matters.”
• “Meta and X separately sued Bright Data last year for allegedly copying and selling their content illegally, and selling tools that let others copy and sell content. Bright Data denied the claims. Meta dropped its case against Bright Data in February after losing a key ruling.”
• “X’s initial complaint against Bright Data, which was filed by another law firm, was dismissed in May. In June, lawyers at Quinn Emanuel sought to file an amended lawsuit on X’s behalf.”
• “In its bid to disqualify the firm, Bright Data said it hired lawyers from Quinn Emanuel in 2023 to evaluate its litigation strategy against Meta, paying the firm nearly $40,000.”
• “Although the Quinn Emanuel lawyers that advised Bright Data are different than the ones that advised X, the entire law firm owes a duty of loyalty to Bright Data, Alsup ruled.”

“Even When Big Cases Intersect With Their Families’ Interests, Many Judges Choose Not to Recuse” —

• “In an examination of more than 1,200 federal judges and state supreme court justices, ProPublica, in partnership with student journalists at Boston University, found dozens of judges, including both Republican and Democratic appointees, who chose not to recuse when facing potential appearances of impropriety involving familial financial connections. Ethics experts say that the judges’ interpretation of the rules may often lie within the letter of the law, but at the expense of its spirit.”
• “In Florida, a state Supreme Court justice presided over a gambling case in which a Native American tribe sought to protect billions in betting revenue. During the proceedings, the tribe made an unusually large campaign contribution to the justice’s wife, a state legislator. The judge later helped form a court majority that struck down the constitutional challenge, protecting the tribe’s business.”
• “In Minnesota, a federal judge heard an antitrust case against a corporation that was a major client of the public relations firm owned by his wife. He went on to dismiss the case, in the corporation’s favor.”
• “And in both Ohio and North Carolina, state supreme court justices rejected calls from ethics watchdogs to recuse themselves from multiple cases involving a parent who is a powerful state politician.”
• “Amid cratering confidence in the impartiality of both the federal and state judicial systems, experts worry that such failures to police conflicts of interest only further erode public confidence.”
• “The Brennan Center for Justice at NYU School of Law proposed a series of reforms in 2016, including independent review of all motions for disqualification — at both the U.S. and state supreme courts — so judges don’t effectively serve as the final arbiters of their own biases. Brennan also advocated ending the common practice of judges keeping their reasons for recusal — or non-recusal — secret, which can stymie the appeals process and create a void in case law.”

“No Conflict For Ballard Spahr In Ex-Union Leader’s Bribe Case” —

• “A Pennsylvania federal judge on Tuesday [7/2] rejected a claim by former Philadelphia union leader and convicted felon John ‘Johnny Doc’ Dougherty that his Ballard Spahr LLP defense team marred its representation of him in a bribery prosecution because of a conflict of interest with Comcast.”
• “The ruling, by U.S. District Judge Jeffrey L. Schmehl of the Eastern District of Pennsylvania, came two days before Dougherty is set to be sentenced following his convictions for bribing Bobby Henon when Henon was a Philadelphia city councilman and embezzling from the International Brotherhood of Electrical Workers Local 98, for which he worked as business manager for three decades.”
• “Prosecutors said Dougherty used Henon to pressure Comcast into giving union workers fiber-optic work by stalling franchise agreement renewal negotiations with the city. Dougherty claimed that his lead Ballard Spahr attorney, Henry Hockeimer Jr., did not call top Comcast executive David Cohen as a witness and failed to effectively cross-examine company employee Kathleen Sullivan, who was privy to the negotiations, because he had represented Comcast previously.”
• “However, Judge Schmehl said Dougherty failed to present evidence that pointed to divided loyalty on Hockeimer’s part. ‘Even if Mr. Hockeimer had some loyalty to Comcast due to his firm’s representation of the company in unrelated matters — and the court found above that he did not — Mr. Dougherty has not explained how that loyalty compelled Mr. Hockeimer to not call Mr. Cohen as a witness,’ Judge Schmehl said.”
• “Judge Schmehl also said that Hockeimer elicited testimony from Sullivan that was favorable to Dougherty’s case, rejecting Dougherty’s argument that his former attorney should have pressed Sullivan as to whether she invited Dougherty to the negotiations, which, if true, would undercut the prosecution’s contention that the union leader was the driving force behind the meetings.”

“Young Thug, YSL Trial: Judge Krause denies motion to recuse herself” —

• “Fulton County Superior Court Judge Rachel Krause has denied the motion to recuse herself from deciding whether a fellow judge should be removed from the massive racketeering trial of GRAMMY Award-winning rapper Young Thug (real name Jeffery Williams) and several of his associates.”
• “Brian Steel, representing Young Thug, filed the motion based on two factors: Judge Glanville is a colleague, and he made a $2,000 campaign donation to Judge Krause in 2024.”
• “In her denial, Judge Krause emphasized that the court must consider whether a motion for recusal is timely, legally sufficient, and if the affidavit sets forth facts warranting recusal.”
• “Krause stated that the court found the motion timely and legally sufficient but determined that the donation does not warrant recusal as it was not exceptionally large and no additional facts were presented to demonstrate the need for recusal.”
• “According to Krause, the Georgia Supreme Court and the Code of Judicial Conduct indicate that standard campaign contributions do not necessitate recusal unless additional compelling circumstances are demonstrated.”
• “The court also found that Williams’ reference to the Judicial Qualification Commission Opinion 220 does not apply since Judge Glanville is neither a party nor counsel in the case.”
• “Judge Krause did not address the fact that she and Judge Glanville are colleagues. However, she did point out that she was randomly assigned to the case.”

“Billion-Dollar Estate Suits Show Hazards of Funding Family Feuds” —

• “A litigation financier’s foray into a battle over a dead Saudi businessman’s multibillion dollar estate is a cautionary tale for outside funders investing in family fights.”
• “UK-based Therium Capital, eyeing a cut of a potential 10-figure settlement, bankrolled the wife and daughter of the late Saudi billionaire Osama Ismail Abudawood in an estate fight with his brothers. After at least 18 lawsuits in three countries, the pair are settling for a little more than one-third of what they say they were first allotted under Sharia law. Along the way, they stopped showing up in court, cycled through lawyers, and were ordered to pay more than $750,000 after being held in contempt.”
• “Funders typically stay away from estate cases because they are unpredictable and messy. A rare example of funders wading into family disputes came when Burford Capital, a major player in the industry, earned $103 million in 2021 on an investment in divorce proceedings involving a Russian billionaire.”
• “The family fight over his estate pitted Eleanor de Leon, Abudawood’s wife of 23 years, and Alaa Abudawood against his brothers, Ayman and Anas, who are directors of the company. De Leon and Alaa fought for a larger share of the estate, valued between $1 billion and $4 billion, after they said they were initially allotted 24% under Sharia law. They accused Abudawood’s brothers and business partners of diluting the company’s value.”
• “The fight included lawsuits in Saudi Arabia, the US, and the Cayman Islands. Ultimately, a California court in late June ordered de Leon and Alaa to finalize a global settlement worth just $88 million. When the pair refused to comply and skipped court dates, the judge appointed a power of attorney to execute the documents.”
• “Therium agreed to invest in the litigation in 2019. Litigation funding deals are often confidential. The investment wasn’t disclosed until February, when a lawyer representing the brothers alerted the court that an unidentified funder was backing de Leon and Alaa Abudawood.”
• “Therium, de Leon, and Alaa Abudawood did not respond to requests for comment. It’s not clear whether delays in the case impact Therium’s share of the settlement proceeds.”

“DQ’d Atty Denied Bid To Have Netflix Atty Held In Contempt” —

• “A California federal judge rejected a bid by a former Whitestone Law attorney to hold an attorney representing Netflix in a patent infringement case in contempt over harassment allegations, determining that the unwanted contact does not violate the order disqualifying his ex-firm.”
• “U.S. District Judge Jon S. Tigar rejected Joseph Zito’s allegations that Baker Botts LLP partner Rachael D. Lamkin, who represents Netflix, violated the order disqualifying Whitestone by contacting him with questions about the case.”
• “Citing 2013’s Am. Semiconductor Inc. v. California Assignments LLC , Judge Tigar said Lamkin was not the subject of the aforementioned order to disqualify and as a result, she cannot be held in contempt of an order that does not apply to her.”
• “‘Parties who were not parties to the action, were not named in the court’s preliminary injunction order, and were not in privity with, nor successors-in interest to, any entity subject to the injunction, could not be held in contempt for violating its terms,’ Judge Tigar’s order said regarding the Am. Semiconductor case.”
• “Zito said in his June 27 notice that earlier in the month, Lamkin emailed him and current Whitestone attorney Erik Lund regarding new requests for discovery of fund manager AiPi LLC in a Finnish inventor in his patent infringement case against Netflix and AiPi, a nonparty that paid some of the inventor’s legal bills. He wrote that ‘Netflix Attorney Rachael D. Lamkin is violating this court’s order and should be held in contempt.'”
• “Whitestone was disqualified from representing AiPi in March when Judge Tigar determined that the firm could not represent both the funder and inventor Lauri Valjakka, who it worked with as fill-in counsel for a deposition when his attorney from Ramey LLP was unavailable.”
• “Zito added that Lamkin continued to send her and Lund emails, eventually adding Whitestone attorney Ken Sheets to the mix. The content of the subsequent emails included an attempt to serve a notice to AiPi and an inquiry as to who’s currently representing the company, Zito said.”

“Georgia: Ethics Rules Do Not Apply To Lawyers As Fiduciaries” —

• “The Georgia Supreme Court has rejected a petition for voluntary discipline on the grounds that the ethical rules do not apply to lawyers acting in a fiduciary capacity:
  • “In the petition, Brown, who has been a member of the State Bar of Georgia since 1997, admits that she “may have” violated Rules 1.15 (I) (c) and 1.15 (II) (b) of the Georgia Rules of Professional Conduct (“GRPC”) while serving as the successor trustee of a South Carolina trust—even though the Bar acknowledges that she was acting only in a fiduciary capacity, and not as a lawyer, at the time. The Bar asserts that Brown violated Rules 1.15 (I) (c) and 1.15 (II) (b) and requests a suspension of between three and six months.”
  • “We ultimately conclude that Brown’s conduct did not violate Rule 1.15 (I) (c) or 1.15 (II) (b). As we explain below, the text of Rules 1.15 (I) (c) and 1.15 (II) (b) does not clearly indicate whether these Rules apply to lawyers when they are acting as fiduciaries not in connection with the legal representation of a client or otherwise in the practice of law.”
  • “Even after applying rules of statutory construction, either reading of Rules 1.15 (I) (c) and 1.15 (II) (b)—that they do, or do not, apply to lawyers acting as fiduciaries but who are not engaged in legal representation of a client or in the practice of law—is plausible. However, applying these Rules to lawyers when they are not practicing law would raise serious constitutional concerns, which we set out below.”
  • “As a result, under the canon of constitutional doubt, we interpret Rules 1.15 (I) (c) and 1.15 (II) (b) such that they do not apply to lawyers when they are acting as fiduciaries not in connection with the legal representation of a client or otherwise in the practice of law. Because Brown’s conduct at issue in this matter falls outside our interpretation of Rules 1.15 (I) (c) and 1.15 (II) (b), we conclude that Brown’s conduct did not violate those Rules. We therefore reject her petition for voluntary discipline.”

“Ethics Opinion 1268: Confidential information; publication of article about issues arising in a case handled by the lawyer” —

• “After the termination of the representation, a lawyer may publish an article that discusses legal issues in the representation, as long as the article does not reveal confidential information without the consent of the client.”
• “Confidential information does not include a lawyer’s ‘legal knowledge or legal research’ or information that is ‘generally known’ in the local community or in the trade, field or profession to which the information relates. But information is not generally known merely because it is available in court files.”
• “Rule 7.1(r) of the New York Rules of Professional Conduct (the “Rules”) encourages lawyers to speak publicly and write for publication on legal topics to help lay persons identify legal problems. Similar policy considerations apply to lawyers who speak or write for the legal community on legal issues that may arise.”
• “The inquirer’s concern is that Client A is wary of publicity and believes that publicity about the case could be damaging to his reputation. That raises the question whether the proposed article would violate any other provisions of the Rules.”
• “By its terms, Rule 1.1(c) applies during the course of the representation. Thus, Rule 1.1(c) does not apply to former clients.”
• “Different confidentiality rules apply once a client becomes a former client. The lawyer’s confidentiality duties to a former client are set forth in Rule 1.9(c), which prohibits a lawyer from using or revealing the former client’s confidential information unless there is an exception in Rule 1.6 (the confidentiality rule).”
• “The inquirer will therefore have to determine whether Client A remains a current client in the matter of the representation. In N.Y. State 1008 (2014), we addressed this issue, noting that whether a person is a current client or a former client is a mixed issue of fact and law that the Committee cannot resolve.”
• “As noted above, a lawyer’s duty of confidentiality to a former client is set forth in Rule 1.9(c), which depends on whether information is ‘protected by Rule 1.6.’ Rule 1.6(a) prohibits a lawyer from knowingly revealing ‘confidential information’ (as defined in Rule 1.6), or using it to the disadvantage of the client or for the advantage of the lawyer, unless the client gives informed consent.”
• “The inquirer states that Client A is worried about information the inquirer gained during or relating to the representation that is ‘likely to be embarrassing or detrimental to the client if disclosed.’ Whether any particular information meets this requirement is a question of fact that we cannot resolve.”
• “After the termination of the representation, a lawyer may publish an article that discusses legal issues in the representation, as long as the article does not reveal confidential information without the consent of the client.”

(Reminds me of issues raised in the client verdict PR story we noted last year.)

“Ex-Magellan Execs Waive Conflicts Over Past Shared Counsel” —

• “Two former Magellan Diagnostics executives charged with conspiring to hide defects in the company’s lead testing devices agreed on Friday to waive any potential conflict created by their prior joint representation by a Donnelly Conroy & Gelhaar LLP attorney.”
• “The waivers from former Magellan CEO Amy Winslow and former chief operating officer Mohammad Hossein Maleknia came during a brief remote hearing before federal Magistrate Judge Judith Dein.”
• “The government raised concerns about the situation in a motion filed late last month requesting a so-called Foster hearing into whether attorney George Vien could continue to represent Maleknia after he had previously also represented Winslow.”
• “‘I discussed this situation extensively with my client, Mr. Maleknia, and my former client, Ms. Winslow, and we answered all their questions,’ Vien told the judge Friday. ‘Given the status of the case and all the facts, we do not see any conflict, but both my client and my former client have said they would waive any potential conflict and want me to stay in the case.'”
• “Winslow’s current attorney, William J. Trach of Latham & Watkins, told the judge that he also had ‘extensive conversations’ with her and is confident that she understands the issue and is willing to waive any potential conflict.”
• “Judge Dein outlined some of the risks of having previously shared counsel, including hindering plea negotiations, any defense or sentencing request based on culpability of the other party, or a future appeal based on ineffective assistance of counsel.”
• “Asked by the judge if she understood that the risk to her is largely from any prior information she might have disclosed while represented by Vien, Winslow told Magistrate Judge Dein that she did.”
• “Maleknia and Winslow, along with former quality assurance director Reba Daoust, are facing charges of wire fraud, conspiracy to commit wire fraud, conspiracy to defraud a government agency and introduction of a misbranded medical device in what the U.S. Attorney’s Office for the District of Massachusetts says was a scheme to hide issues with Magellan’s LeadCare line of testing devices.”

New York: “Judicial Ethics Opinion 23-151” —

• “A judge may preside over Article 75 proceedings challenging employment arbitration awards, where the state agency employer was previously represented in-house by the judge’s law clerk’s spouse, but the judge must insulate the law clerk and make appropriate disclosures.”
• “A judge asks if it is ethically permissible to preside over certain Article 75 proceedings challenging employment arbitration awards, where the judge’s law clerk’s spouse, an in-house counsel at a state university, previously represented the employer at the arbitration. The Attorney General’s office, and not the law clerk’s spouse, will be representing the employer in the proceedings before the judge.”
• “A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act in a manner that promotes public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A judge must not allow family, social, political or other relationships to influence the judge’s judicial conduct or judgment (see 22 NYCRR 100.2[B]) and must disqualify in a proceeding where the judge’s impartiality “might reasonably be questioned” (22 NYCRR 100.3[E][1]). However, where disqualification is not required under objective standards, a judge ‘is the sole arbiter of recusal’ (People v Moreno, 70 NY2d 403, 405 [1987]).”
• “Where a member of the judge’s staff has a conflict, it is ordinarily sufficient to insulate the staff member and disclose the situation…”
• “After insulation and disclosure, disqualification is entirely within the judge’s discretion, even if a party objects, provided the judge can be fair and impartial… Here, too, we conclude the judge’s impartiality cannot “reasonably be questioned” simply because the law clerk’s spouse is employed by a party to the case before the judge and, as in-house counsel to that public sector employer, previously appeared in an earlier stage of the case. Instead, disclosure and insulation is sufficient.”