Bressler Risk Blog

With thanks to Cooley Conflicts Attorney George Bremner, and risk superstar Bill Frievogel, comes this from the New York City Bar: “Formal Opinion 2024-1: Ethical Issues Arising from the Representation of Two or More Bidders Competing for the Same Asset” —

• “The Professional Ethics Committee issued a formal ethics opinion analyzing a lawyer’s and a law firm’s ethical obligations when they consider representing two or more bidders competing for the same asset. The applicable New York Rules of Professional Conduct include Rules 1.4, 1.6, 1.7, 1.9, and 1.10(a).”
• “The opinion finds that, under these rules, in most situations, the lawyer and/or law firm would have a conflict of interest; however, again in most situations, the conflict is likely to be waivable in the law firm setting.”
• “Part I of the opinion concludes that a conflict of interest arises where a lawyer or law firm represents two or more bidders competing for the same asset.”
• “Part II presents a permutation of this situation in which the lawyer or law firm represents one bidder for the asset, but becomes aware that another client (which the lawyer is representing in an unrelated matter) is also bidding for the asset. (This permutation is unlikely to result in a conflict of interest unless the lawyer is asked to analyze or critique the other client’s bid.)”
• “Part III concludes that a multiple-bidder conflict is often waivable with consent from the affected competing bidder clients.”
• “And Part IV addresses other related ethics issues, including the lawyer’s duty to maintain the confidentiality of the work the lawyer (or the lawyer’s associates) performs for each of the competing bidder clients, and the possibility of using advance waivers to manage possible competing bidder conflicts ahead of time.”
• See the full opinion for all the details and discussion.

“Clyde & Co fined £500,000 after admitting due diligence failure” —

• “Top-50 firm Clyde & Co has been fined half a million pounds after admitting failing to carry out due diligence on a corporate client for more than four years.”
• “The firm’s former partner Edward Henry Mills-Webb was also fined £11,900 by the Solicitors Disciplinary Tribunal after admitting that he ‘materially contributed’ to the failure to check more than a dozen transactions as required by anti-money laundering regulations. There was no evidence that the client or its principals were involved in money laundering or financial crime.”
• “It is the second sanction levied on Clyde & Co in the past seven years. The international firm was previously fined £50,000 and three partners £10,000 each for accounting failures and breaches of AML rules.”
• “The tribunal heard earlier this week that both Clyde and Mills-Webb admitted that they should have obtained more complete documents for the former client, a shipping company incorporated in Liberia. The only documents obtained when the client was taken on in 2014 were six years old, and the firm and Mills-Webb accepted that they should have done more to understand the nature and structure of the business.”
• “Clyde blamed Mills-Webb for failing to identify what due diligence was required when the client was taken on and for failing to pay attention to emails from the firm’s business acceptance unit about steps that needed to be taken.”
• “For Clyde, Ben Hubble KC said: ‘The firm apologises for and very much regrets its failings. The firm has acknowledged the need to, and has worked to, strengthen its systems and processes.’”
• “Matter opening forms must now be signed off by the relevant fee-earner, who must expressly confirm that the information on the form is correct. Clyde said it had also increased the level of scrutiny that it applies to work classed as high risk.”
• “Helen Evans KC, for shipping expert Mills-Webb, said her client had not been ‘acting blindly and in a vacuum’ and believed his team had checked the client’s status.”
• “Mills-Webb accepted he had been ‘too detached’ from the due diligence process but stressed that his misconduct was an error and inadvertent, she said. Evans added: ‘He has done nothing inappropriate and always submitted there should be shared responsibility.’”
• “In a statement, the firm said it ‘sincerely regrets any compliance failings’ which it identified in 2018. It said: ‘Having reported the issue to the SRA, we fully assisted with its investigation and have sought to learn appropriate lessons.”
• “‘Under the firm’s current leadership, we have significantly enhanced our risk management and regulatory compliance. We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. This SDT determination is a reminder that regulatory compliance and risk management requires continuous, diligent attention.’”

“Conflicts of Interest under Conditional Fee Agreements” —

• “Two recent cases reveal that conflicts of interest can arise at the settlement stage of a claim, particularly where a Conditional Fee Agreement (‘CFA’) applies. This reiterates the age-old lesson that solicitors must not prioritise their own interest (or the interests of one client at the expense of another) otherwise they risk incurring liability for negligence and breach of fiduciary duty, as well as possible regulatory exposure.”
• “In Forster v Reynolds Porter Chamberlain [2023] EWHC 1150 (Ch) the High Court found that the duties solicitors owed to the client, even when acting under a CFA agreed on a ‘no win no fee’ basis, remain unaltered.”
• “RPC acted for the client in litigation and following an agreed settlement with the opponent. Under the terms of the CFA all sums recovered from the opponent were payable to RPC and counsel in priority to the client. The client also had the benefit of an after the event (ATE) insurance policy, which covered repayment of a loan to fund expert fees, which was recommended by RPC.”
• “The Court held that RPC had a clear conflict of interest in advising the client to borrow money and then advising and acting for the lender in preventing the client from enforcing the settlement. RPC could not properly have advised or acted for borrower and lender without the informed consent of both.”
• “It was found that RPC was in breach of its duty to the client when it declined to act on her instructions to enforce the settlement. Whilst RPC had a greater financial interest in successful enforcement than the client did, as a consequence of the CFA, that did not entitle RPC to decide what to do. As a result of the enormous costs incurred on the client’s claim and the modest settlement in her favour, there was an intractable conflict of interest and duty on RPC once the opponent defaulted.”
• “In Michael Partridge Suzette Partridge v Healys LLP [2023] EWHC 2340 (KB) , a professional negligence action against the Defendant firm of solicitors, one of several allegations raised by the Claimants was that Healys had put themselves in a position of conflict under the terms of the CFA they were engaged under by advising the Claimants to settle at a mediation.”
• “The specifics of the conflict, or why the advice was not in the Claimants’ best interest was not pleaded nor was there a pleading that the advice to accept the offer was negligent. Healys applied to strike out the claim on the basis the pleaded claim had no real prospect of success.”
• “The Court held that in the absence of any pleaded allegation that the advice at mediation was negligent, simply giving non-negligent advice that led to a termination of the retainer was not an actionable conflict. Rather, it was a situation expressly provided for in the CFA agreement.”

In New York: “Judicial Ethics Opinion 23-44” —

• “(1) For two years after the representation is completely terminated and all fees are paid, a judge is disqualified, subject to remittal, from all matters in which an attorney who personally represented the judge appears before the judge, and the judge must disclose the former representation when other attorneys from the same law firm appear before the judge.”
• “(2) Where the judge serves in a court with appellate jurisdiction, and their former counsel seeks leave to participate as amicus curiae in a case during that two-year period, the judge may not vote on their ex-counsel’s application. If the application is granted by the judge’s colleagues, the judge thereafter must not participate in the appeal unless it is practicable in the judge’s court to make full disclosure on the record or, where applicable, offer an opportunity for remittal of the judge’s disqualification.”
• “(3) On a motion to submit an amicus brief, a judge without conflict may vote to approve or to deny the motion based on the merits of the brief and the value of its submission, in accordance with any applicable law or rules that govern such decisions. However, the judge should not consider potential practical impacts from other judges’ anticipated disqualification unless applicable law, rules, or administrative orders permit the judge to do so.”
• “We have previously advised that a judge’s obligations with respect to a former client remain the same whether that former client appears as a party or as an amicus curiae (see Opinion 18-46 [noting it “does not change the analysis”]).”
• “Here, the same principles apply. The inquiring judge serves in a court with appellate jurisdiction, and the judge’s former counsel seeks leave to participate as amicus curiae in a case during that two-year period. Under such circumstances, we conclude that the judge may not vote on their former counsel’s application.”
• “If the application is granted by the judge’s colleagues, the judge thereafter must not participate in the appeal, unless it is practicable in the judge’s court to make full disclosure on the record or, where appropriate, offer an opportunity for remittal of the judge’s disqualification.”
• “The judge’s second question envisions a scenario where one or more other judges on the same appellate court or appellate panel have a conflict involving a particular proposed amicus curiae. In essence, the judge asks if it is ethically permissible, when deciding an application for leave to participate as amicus curiae, to consider another judge’s likely disqualification if it is granted.”
• “In our view, it could potentially create an appearance of impropriety and undermine the court’s appearance of neutrality and independence if a judge were to consider whether granting the application would require certain colleagues to disqualify from the matter. Accordingly, the judge should not consider potential procedural or staffing impacts from other judges’ anticipated disqualification unless applicable law, rules, or administrative orders permit the judge to do so.”

In Rhode Island: “Attorneys – Disqualification – Probate matter” —

• “Where an attorney who represented a client in a probate matter following the death of the client’s mother has joined a law firm that represented the decedent’s estate, the attorney is disqualified from working on remaining trust-related matters unless the former client removes the disqualification by giving written informed consent.”
• ““It is the Panel’s opinion that: (1) the inquiring attorney is disqualified from working on the remaining matters related to the trust; (2) however, the former client may remove the disqualification by giving his or her written informed consent to the representation; and (3) if the former client does not provide such consent, no lawyer in the inquiring attorney’s new law firm may work on the remaining matters related to the trust unless the inquiring attorney is screened from the matter, and the former client is informed in writing of the nature of the former representation and is given a description of the screening procedures emplaced.”
• “…The former client’s interests are materially adverse to those of the decedent’s estate because the former client had a beneficiary interest in the estate that was subsequently extinguished by an amended estate plan executed by the decedent. Based on these facts, the Panel finds that the inquiring attorney is disqualified from representing the decedent’s estate pursuant to Rule 1.9(a).”
• “…Relevant here is Rule 1.10(c), which applies because the inquiring attorney has moved to a new law firm. … Under this Rule, no lawyer of the new law firm may represent a person in a matter in which the inquiring attorney is disqualified under Rule 1.9, unless two (2) conditions are met. Therefore, should the former client not consent to the inquiring attorney’s representation of the decedent’s estate, the Panel finds that no lawyer in the inquiring attorney’s new law firm may represent the decedent’s estate unless the following occurs.”
• “First, the inquiring attorney must be ‘timely screened from any participation in the matter and … apportioned no part of the fee therefrom.’ Rule 1.10(c)(1). Rule 1.0(k) defines ‘screened’ to mean ‘the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law.'”
• “Second, the former client must be given prompt written notice enabling him or her to determine the firm’s compliance with Rule 1.10(c)… Comment [8] to Rule 1.10 clarifies that such notice should contain ‘a description of the screened lawyer’s prior representation and of the screening procedures employed[, and] generally should be given as soon as practicable after the need for screening becomes apparent.'”

“Law Firms Wrestle With How Much to Tell Clients About AI Use” —

• “Generative artificial intelligence promises to make legal work faster and more efficient, but it also poses a quandary for law firms: Should they tell clients they’re using the technology?”
• “Cleary Gottlieb Steen & Hamilton hasn’t reached a definite conclusion on disclosure and will follow what clients want, managing partner Michael Gerstenzang said. But ‘there’s no circumstance in which I could imagine using it on a not fully-disclosed basis,’ he added.”
• “The disclosure question is starting to come up in law firm conversations with clients. It raises other questions for in-house and outside counsel—including whether certain uses of AI need to be disclosed, but not others, and whether an engagement letter is the best place for a firm to make disclosures.”
• “State bar associations are weighing in. Earlier this month, the California Bar adopted guidance advising lawyers to consider disclosing AI’s use. The Florida Bar in a draft ethics opinion recommended lawyers get clients’ informed consent before using generative AI ‘if the utilization would involve the disclosure of any confidential information.'”
• “Lawyers’ existing duties of confidentiality and competence sufficiently cover obligations while using AI tools, said Katherine Forrest, a partner at Paul Weiss, a former US District Court judge, and the author of two books about AI and the law.”
• “But disclosing AI use isn’t ‘necessarily a bad thing, and it may in fact be prudent during this interim phase, while we’re all getting used to this new transformed world with new tools,’ Forrest said.”
• “Generative AI is increasingly baked into the technology lawyers touch every day, such as Microsoft Corp.’s AI Copilot, which is available in Word, and many common legal research tools.”
• “AI disclosure will most likely appear in engagement letters, but firms are watching for clients to take the lead.”
• “Gerstenzang, the Cleary managing partner, said he expects client expectations on disclosure to dictate conversations about AI’s use and whether disclosure appears in engagement letters. The firm is already talking to clients about AI, he said.”
• “Use of generative AI isn’t currently part of Paul Weiss’ standard engagement letter, Forrest said. The firm has clients who have asked it not to use generative AI without communicating with them, she said.”

Fresh detail on this one: “Law firm that handles data breaches was hit by data breach” —

• “An international law firm that works with companies affected by security incidents has experienced its own cyberattack that exposed the sensitive health information of hundreds of thousands of data breach victims.”
• “San Francisco-based Orrick, Herrington & Sutcliffe said last week that hackers stole the personal information and sensitive health data of more than 637,000 data breach victims from a file share on its network during an intrusion in March 2023.”
• “Orrick works with companies that are hit by security incidents, including data breaches, to handle regulatory requirements, such as obtaining victims’ information in order to notify state authorities and the individuals affected.”
• “In a series of data breach notification letters sent to affected individuals, Orrick said the hackers stole reams of data from its systems that pertain to security incidents at other companies, during which Orrick served as legal counsel.”
• “Orrick said the stolen data includes consumer names, dates of birth, postal address and email addresses, and government-issued identification numbers, such as Social Security numbers, passport and driver license numbers, and tax identification numbers. The data also includes medical treatment and diagnosis information, insurance claims information — such as the date and costs of services — and healthcare insurance numbers and provider details.”
• “Orrick said that the breach includes online account credentials and credit or debit card numbers.”
• “The number of individuals known to be affected by this data breach has risen by threefold since Orrick first disclosed the incident. Orrick said in its most recent data breach notice that it “does not anticipate providing notifications on behalf of additional businesses,” but did not say how it came to this conclusion.”
• “It’s not clear how the hackers initially broke into Orrick’s network, or whether the hackers demanded a financial ransom from the law firm.”
• “In December, Orrick told a San Francisco federal court that it had reached an agreement in principle to resolve four class action lawsuits, which accused Orrick of failing to inform victims of the breach until months after the incident.”

“CMS’ Spanish Arm Becomes Latest Victim of LockBit Cyber Attack” —

• “CMS has become the latest law firm to fall victim to a cyber attack, with its Spanish arm suffering a data breach of its storage servers.”
• “According to a post on social media platform X, behind the attack is ransomware group LockBit, which made headlines last month when it breached Allen & Overy’s servers, holding to ransom potentially highly sensitive client and firm data.”
• “CMS confirmed in a statement that ‘other member firms of the CMS organisation’ are not affected by the incident. In addition, its Spanish office has engaged external forensic specialists, who are collaborating with its cyber security response team, to ‘isolate and control the incident.'”
• “Commenting on the attack, the firm said: ‘We are still doing thorough cyber forensic work to examine and resolve the incident. Our focus is to determine what data has been affected. The firm’s priority is its clients and therefore we will maintain our security protocols and have implemented additional procedures.'”
• “A&O appeared on LockBit’s list of targets on its website on November 9, with the hackers demanding a ransom and threatening to publish its confidential data. However, the firm was removed from the victim list one day before the November 28 ransom deadline. It is as yet unclear whether A&O paid a ransom following what experts said would have been prolonged negotiations.”

Michael J. Rossi, a partner at Conn, Kavanaugh, Rosenthal, Peisch & Ford, writes on: “Spotting and avoiding ‘material limitation’ conflicts of interest” —

• “Even if two clients are not directly adverse, a conflict of interest may arise if a lawyer’s ability to represent a client is materially limited by the lawyer’s other responsibilities or personal interests. These ‘material limitation’ conflicts are a minefield and are not always apparent. This column provides some tips on how to avoid them.”
• “Comment 8 [to Mass. R. Prof. C. 1.7] provides that a conflict of interest exists if there is a ‘significant risk that a lawyer’s ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the lawyer’s other responsibilities or interests.'”
• “The Supreme Judicial Court observed in Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, 473 Mass. 336 (2015), that the ‘critical inquiry’ in analyzing potential conflicts under the second prong of Rule 1.7 ‘is whether the lawyer has a competing interest or responsibility that will materially interfere with the lawyer’s independent professional judgment in considering alternatives or foreclose courses of action that reasonably should be pursued on behalf of the client'”
• “Material limitation conflicts under Rule 1.7 tend to arise in a number of familiar scenarios. The most common is when a lawyer represents multiple clients in the same matter. If an attorney simultaneously represents an employer and an employee, for example, the lawyer’s ability to recommend a course of action to one client may be impacted by the lawyer’s duty of loyalty to the other. This is especially true when the employee is alleged to have committed misconduct that exposed the employer to a lawsuit.”
• “Joint representation can also pose a problem when a lawyer represents more than one plaintiff in a personal injury case. The interests of joint clients may align at the outset of a case but diverge as the matter progresses, such as when one client wants to accept a settlement offer and the other wants to proceed to trial.”
• “The mere possibility of a future conflict between joint clients does not require a lawyer to decline representation. In practice, lawyers often represent more than one client in a case. The critical question for a conflict analysis is the likelihood that a difference in interests will emerge and, if it does, whether it will materially interfere with the lawyer’s independent professional judgment.”
• “The best approach when an attorney is asked to represent multiple clients is to (a) determine whether the clients’ interests are sufficiently aligned, such that the lawyer can adequately represent both of them, (b) disclose the special considerations for joint representation in the engagement letter, including the sharing of confidential information, and (c) be vigilant about changing circumstances in the case that may require the lawyer to withdraw as counsel for one or both clients.”
• “A second scenario that is ripe for material limitation conflicts under Rule 1.7 is when tensions arise in the attorney-client relationship. If a lawyer makes a material mistake in the handling of a case, the lawyer has a personal interest in not getting sued for malpractice. That interest may interfere with the lawyer’s independent judgment in pursuing a course of action in the client’s best interest.”
• “For example, an attorney who omits a key argument in a brief may be tempted to advise the client in a way that minimizes the mistake, rather than one that maximizes the client’s interests. When a lawyer believes his or her personal interests may be in conflict with a client’s interests, the lawyer should advise the client to seek independent legal advice before continuing the representation.”
• “A third scenario that gives rise to material limitation conflicts is when a lawyer’s action on behalf of one client materially limits the lawyer’s effectiveness in representing another client. These so-called ‘positional’ conflicts often arise when lawyers in the same law firm argue different sides of a legal issue in unrelated matters. The ethical risk is two-fold. On one hand, attorneys may find themselves in the undesirable position of creating legal precedent that is adverse to a client’s interest. On the other hand, a lawyer may be reluctant to advance a particular argument for one client in order not to offend another client.”
• “Positional conflicts are especially tricky because they are not detectable through the conflict check processes that most law firms use. Further complicating matters, the ethical rules on positional conflicts are vague.”
• “Comment 24 to Rule 1.7 states that ‘[t]he mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of [another] client in an unrelated matter does not create a conflict of interest.’ Only when the risk of a material limitation is significant must the lawyer refuse the representation or withdraw from one or both matters.”
• “The scenarios discussed above are not exhaustive. Material limitation conflicts can also arise when a lawyer enters into a business transaction with a client (e.g., a promissory note for the payment of fees), when a lawyer has a personal relationship with opposing counsel, or when an attorney has strongly held political beliefs that bear upon the subject matter of a representation.”
• “Material limitation conflicts are subtle and not always detectable through standard conflict check procedures. To avoid them, lawyers should ask themselves at all stages of an engagement whether their professional judgment might be compromised by competing interests, whether personal or professional. If there is any doubt, it is best to seek the advice of an in-house ethics partner or outside counsel.”

“Myovant shareholder lawsuit dismissed by federal judge” —

• “A federal judge in the US District Court, Southern District of New York, has dismissed a lawsuit brought by a shareholder – and putative class representative – of Myovant Sciences, a biopharmaceutical company that was acquired by its majority shareholder Sumitovant Biopharma in March 2023.”
• “The claimant, Joseph Zappia, alleged that Myovant and its directors violated US federal securities laws by filing a false and misleading proxy statement to solicit shareholder approval for the merger. Zappia asserted that the proxy statement failed to disclose that Skadden, Arps, Slate, Meagher & Flom, the law firm hired to advise Myovant’s special committee for the merger, had a conflict of interest because it also represented other companies in the Sumitomo Group, a network of Japanese businesses that included Sumitovant Biopharma and its corporate parent Sumitomo Pharma Co.”
• “Zappia attempted to make the case that Skadden’s conflict of interest compromised its independence and had a deleterious impact on its approach to Myovant and its shareholders, and that it therefore influenced the special committee to accept a low price for the merger and to refrain from soliciting other potential purchasers. In making these allegations, Zappia sought to represent a class of Myovant shareholders who he said had been harmed by the merger.”
• “The judge found that Zappia was unable to produce any facts that demonstrated that Skadden had an actual or potential conflict of interest that would have affected its representation of the special committee. He further noted that Zappia did not actually allege that Skadden had ever represented Sumitovant, the named counterparty in the merger, nor did the claim mention Sumitomo Pharma, its corporate parent. The judge also remarked that the other Sumitomo Group entities that Skadden represented were not operationally integrated with Sumitovant or Sumitomo Pharma. Swatting away the claimant’s reliance on Wilson v Great American Industries [1988], he opined that Zappia ‘read[s] too much into too little.'”
• “Moreover, the judge held that even if Skadden had a conflict of interest, it would not have been material to a reasonable investor, because the information about the firm’s representation of other Sumitomo Group entities was publicly available and did not significantly alter the total mix of information in the proxy statement.”

“Cravath Reveals Work For Ukraine Entities Tied to Hunter Biden” —

• “Cravath Swaine & Moore has disclosed it worked years ago as a foreign agent for Ukrainian businessman Mykola Zlochevsky and his company Burisma Holdings Ltd., according to Justice Department filings.”
• “Cravath partner John D. Buretta, a former Justice Department official, dating back to January 2016 represented Burisma and Zlochevsky, who have been featured in probes of Hunter Biden, the Jan. 4 filings under the Foreign Agents Registration Act show.”
• “Hunter Biden served on the board of Burisma, a Ukrainian energy firm, from 2014 to 2019. Congressional Republicans have said they are investigating whether he worked to influence his father, President Joe Biden, to thwart an investigation of the firm while the elder Biden was vice president.”
• “‘After discussions with the Department of Justice regarding FARA’s scope, Cravath has filed a retroactive registration covering legal services provided to two former clients in March and September 2016, and a supplemental statement terminating the registration as of September 2016,’ Cravath said in a statement.”
  “FARA mandates foreign principals and their advisers make disclosures when engaging in certain activities designed to influence the US government.”
• “‘It is not unusual for DOJ to notify a party of a possible need to register when the department becomes aware of potentially-covered activity,’ said William Minor, who leads DLA Piper’s political law practice. ‘In those cases, the FARA Unit will typically send a ‘letter of inquiry’ requesting further information, and the subsequent back-and-forth will often lead to a party concluding that a registration is advisable, even after the work has concluded.'”
• “Cravath said it was working for Zlochevsky ‘in connection with a possible investigation by the Federal Bureau of Investigation and/or other United States governmental authorities,’ according to a contract dated Jan. 13, 2016 and filed with DOJ’s FARA unit.”
• “Cravath disclosed receiving about $350,000 from the clients for “professional services and advice rendered” between March 2016 and August 2017, according to the Jan. 4 filings.”

“Johnson & Johnson Moves to Disqualify Beasley Allen From Talc Leadership” —

• “Johnson & Johnson has moved to disqualify plaintiffs attorney Andy Birchfield and his firm, Beasley Allen, from the talcum powder multidistrict litigation, citing a new partnership he formed with one of its former lawyers.”
• “Birchfield and his firm have struck an alliance with James Conlan, a former partner at Faegre Drinker Biddle & Reath who worked on Johnson & Johnson’s talcum powder litigation before setting up his own business venture last year called Legacy Liability Solutions LLC.”
• “Their partnership, highlighted in a Nov. 2 Bloomberg Law article by Conlan titled ‘Time to Ditch the Texas Two-Step for a New Mass Tort Strategy,’ seeks to strike a $19 billion deal to resolve talc lawsuits brought by ovarian cancer victims against Johnson & Johnson.”
• “Conlan outlined the details of the proposal in a Nov. 9 letter to Johnson & Johnson’s board of directors, according to a letter attached to a motion Johnson & Johnson filed on Tuesday to show cause why Birchfield and his firm shouldn’t be disqualified from the talc litigation or, at the least, removed from the plaintiffs’ steering committee, where Beasley Allen principal Leigh O’Dell serves as co-lead counsel.”
• “‘Our adversarial system does not work if one side’s lawyers obtain privileged and confidential information from the other’s former counsel,’ wrote Johnson & Johnson attorneys Steve Brody, a partner at O’Melveny & Myers in Washington, D.C., and Susan Sharko, of Faegre Drinker in Florham Park, New Jersey. ‘Where plaintiffs’ counsel forms an alliance with one of defendants’ former attorneys to pursue strategies directly adverse to the defendants in the very same matter, there is only one remedy that will restore fairness and the integrity of the judicial process: disqualification of plaintiffs’ counsel, in this case Andy Birchfield and the Beasley Allen law firm.'”
• “Conlan, who joined Faegre Drinker in 2020, worked on resolving the talc litigation and regularly attended meetings with Johnson & Johnson’s worldwide vice president of litigation, Erik Haas, and other senior in-house counsel.”
• “‘Conlan was privy to wide-ranging, litigation-driven strategy discussions of the strengths, weaknesses, and optimal trial tactics for J&J’s defense of the underlying tort cases that gave rise to J&J’s resolution strategies,’ the motion says. ‘Birchfield entered into his current alliance with Conlan knowing full well that Conlan represented J&J in the same matter. In fact, Birchfield was negotiating potential resolution of the same cases when Conlan was on the other side of the table advising J&J.'”

“Opioid defendant wants Motley Rice disqualified, citing government work” —

• “Optum Rx has moved to disqualify the prominent law firm Motley Rice from representing plaintiffs in pivotal upcoming opioid trials, saying Ohio ethics rules prevent the lawyers from using information they learned working as ‘special assistant attorneys general’ for states in private litigation.”
• “Motley Rice, like other big plaintiff firms, allied with attorneys general and municipal officials to pursue opioid lawsuits on a contingency-fee basis that have so far showered those private lawyers with more than $5 billion in fees. They are continuing with the litigation by targeting any company involved in the opioid business, from consulting firms like McKinsey & Co. to pharmacy benefit managers like Optum Rx, which play a middleman role between drug manufacturers and health plans.”
• “In its latest motion, Optum Rx said Motley Rice used the power of government subpoenas under contingency-fee agreements with Hawaii, the District of Columbia, Puerto Rico and the City of Chicago to obtain tens of thousands of sensitive records that detail Optum’s business strategy, refund agreements with drug manufacturers and other proprietary information.”
• “‘With that confidential information in hand as a roadmap, Motley Rice has turned to litigating opioid and other drug-pricing cases against OptumRx and other PBMs on behalf of various private and public clients,’ the PBM said in the Dec. 15 filing. ‘OptumRx does not challenge the government’s authority to investigate, but it is unethical for Motley Rice to extract confidential information from OptumRx by wielding government power and then, after obtaining the information, to represent other clients in private litigation.'”
• “Optum cited Ohio Rule of Professional Conduct 1.11(c), which prohibits lawyers with ‘confidential government information’ from representing private clients suing the same party. Judge Polster already used that rule in 2019 to disqualify a former U.S. attorney who represented Endo Pharmaceuticals, Optum noted.”
• “In the Hawaii case, Optum negotiated a confidentiality agreement that prohibits Motley Rice from using the materials to guide subpoenas or draft claims ‘in any other matters outside of its representation’ of the Hawaii Attorney General. The firm cited several court decisions that also upheld the disqualification of lawyers who represented government entities and then went on to represent private litigants against the same defendants.”