Risk Update

Law Firm Confidentiality Risk — Disclosure Risk, Confidentiality Management and Expert Witness Issues Lead to Law Firm DQ, Freivogel Findings

Posted Dan Bressler

David Kluft asks: “Does a prior authorized disclosure of confidential information waive confidentiality on the subject matter?” —

  • “Company A hired a TX lawyer to draw up agreements with Company B over certain oil and gas drilling leases. When Company A declared bankruptcy, Company B filed an adversary action for declaration that its rights were not part of the bankruptcy estate.”
  • “The lawyer submitted an affidavit for Company B, against his former client Company A’s interests, that was ‘replete with internal discussions with his former clients and his mental impressions regarding the representation.'”
  • “Company B argued that the information in the affidavit was not confidential, or alternatively it was subject to a waiver, because it merely reflected conversations the lawyer had with the counterparty, which his former client authorized.”
  • “The Court held that the lawyer breached his duty of loyalty: ‘a prior authorized disclosure … does not waive [the lawyer’s] continuing duty of confidentiality’ because “confidential information does not become freely revealable after a prior disclosure.”
  • Decision: here.

Bill Freivogel always spots the most interesting updates, including:

  • Callery v. HOP Energy, LLC, No. 20-3652 (E.D. Pa. Dec. 1, 2025).
    • Plaintiffs moved for class certification, which Defendant, HOP, did not oppose. Several “objectors” claimed class counsel were not adequate on seven grounds. One ground was counsel had a conflict because they had filed a RICO case, which caused disclosure of certain confidential information relating to this case. In rejecting that basis (along with all the others), the court did not see how that disclosure constituted a conflict for class counsel.
  • PTC Therapeutics, Inc. v. Acurex Biosciences Corp., No. 25-cv-04594-AMO (N.D. Cal. Nov. 26, 2025).
    • PTC moved to disqualify Lawyer/Expert and Law Firm. Both had once worked for Bio Electron. In 2019 PTC purchased “substantially all of BioElectron assets.” In this Order the court denied the motions to disqualify. Because PTC purchased fewer than all BioElectron assets, BioElectron’s confidentiality rights did not pass to PTC.
  • Inspire Medical Sys., Inc. v. Nyxoah, Inc., No. 25-667-RGA (D. Del. Nov. 18, 2025).
    • Law Firm has never represented Defendant. However, Law Firm has represented Underwriter in a number of securities offerings by Defendant. Law Firm represents Plaintiff in this case. Defendant moved to disqualify Law Firm. In this opinion the magistrate judge granted the motion to disqualify. Law Firm would have learned too much about Defendant during due diligence in the earlier offerings, making Law Firm’s representation of Plaintiff “deeply improper.” In addition to that rubric, the magistrate judge wades into the problematic “appearance of impropriety.” A good example of an underwriter case going the other way is HF Mgm’t. Serv. LLC v. Pristone, 818 N.Y.S.2d 40 (N.Y. App. Div. 2006).
  • Delgado v. Meta Platforms, Inc., 2025 WL 3251621 (N.D. Cal. Nov. 21, 2025).
    • Defendant moved to disqualify Plaintiff’s expert (“Expert”). In this order the court denied the motion. The order is very fact-specific. Expert had had several contacts with lawyers for Defendant including emails and telephone calls. Expert had alerted Defendant’s lawyers of a possible conflict. The court felt there just wasn’t enough contact of the sort that would create an expectation of confidentiality. Moreover, the court felt the case was at a stage where Plaintiff would be unnecessarily prejudiced by a disqualification.

“Law Firm Disqualified in Ford Lawsuit Spurs Debate on Expert Witness Ethics” —

  • “… the disqualification of the law firm Quill & Arrow from representing in a lawsuit against Ford Motor Company due to irregularities involving an expert witness.”
  • “… the court ruled that the firm improperly communicated with an expert witness hired for the case… the judge’s decision was grounded in allegations of an undisclosed conflict that undermined the legal process’s integrity.”
  • “The case highlights a crucial issue in legal ethics: the impartiality and independence of expert witnesses. Legal experts argue that this disqualification serves as a cautionary tale for law firms to maintain transparency and adhere strictly to procedural norms when engaging external experts.”
  • Additional detail in the order: here.