Bressler Risk Blog

David Kluft asks: “Can I be adverse to a prospective client if all the information I received from her was publicly available?” —

• “A Tulsa public bus driver wanted to file a discrimination complaint against the transit authority. She visited an OK law firm and showed them her EEOC right-to-sue letter and the same paperwork she had showed to her employer and filed with the EEOC. The firm declined the case and she sued pro se, also naming her union as a defendant.”
• “When the same firm appeared on behalf of the union defendant, she moved to disqualify the firm pursuant to Rule 1.18 (prospective client conflicts).”
• “The Court denied the motion, finding no conflict. Because the information the firm received from the prospective client was “generally known” already to all parties, the court found it could not possibly be ‘significantly harmful’ under the rule.”
• Decision: here.

“Ethics Opinion 1283: Attorney’s Referrals to Title Abstract Company Owned by Referring Attorney” —

• “An attorney who owns an interest in a title abstract agency that brokers title insurance may not simultaneously (i) represent a client in a real estate transaction and (ii) act as agent for a title insurance underwriter in the same transaction, unless the attorney performs purely ministerial functions for the title agency and does not negotiate on behalf of the underwriter.”
• “Under Rule 1.10(a) (as amended effective January 1, 2025), whether the attorney’s conflict (which is based on a financial interest in the title abstract agency) will be imputed to the whole firm depends on whether there is a ‘significant risk that the representation will be materially limited or that the independent professional judgment of the participating lawyers in the firm will be adversely affected.'”

“EEOC data requests to law firms were not mandatory, agency says in court filing” —

• “A letter to 20 BigLaw firms seeking detailed information about diversity-program applicants and other attorney job seekers constituted ‘informal information gathering’ rather than a mandatory demand, according to a court filing by the Equal Employment Opportunity Commission.”
• “Most of the 20 law firms did not provide any information requested by the EEOC, and those that did reply did not include identifying information about any specific individual, according to the July 31 EEOC filing seeking to dismiss a lawsuit challenging the information gathering. Three anonymous law students are the plaintiffs.”
• “The March 17 letters by EEOC acting chair Andrea Lucas expressed concerns about the firms’ diversity hiring practices, saying they may amount to discrimination that violates Title VII of the Civil Rights Act of 1964.”
• “The student plaintiffs had alleged the EEOC acted beyond its authority when it demanded sensitive personal information about the law firms’ applicants and employees dating back six to 10 years. The students applied to or worked at one or more of the law firms.”
• “In their Aug. 14 reply to the EEOC’s motion, the student plaintiffs say the EEOC defendants ‘attempt to minimize their conduct—an implicit acknowledgment that they have overstepped.'”
• “According to Law.com, Goodwin Procter ‘is the only law firm known to have submitted voluminous hiring data to the EEOC.’ The firm did not provide applicant names, however.”

“Burford Aims to Buy Stakes in US Law Firms, Rival Private Equity” —

• “Burford Capital is eyeing new territory after investing in lawsuits for nearly two decades: The litigation funder wants to buy stakes in US law firms. Burford is pitching the idea of purchasing a minority stake to several US law firms, according to Travis Lenkner, its chief development officer. The funder is angling itself as an alternative to private equity companies already backing some firms through deals to provide back office services. “
• ‘Burford is probably the most natural investor in this space,’ Lenkner said. ‘We’re not structured predominantly as a private equity fund, so we can be a very patient, permanent investor in a structure like this.'”
• “With $3 billion in market capitalization, publicly traded Burford is big enough to pull its weight in a space mostly inhabited by private equity giants, said Lenkner.”
• “‘Our size and capital structure I think gives us a relative advantage when you’re talking about other investors from within the legal finance space as compared to broader private equity,’ he said.”
• “Lenkner would not specify the number of law firms Burford is in talks with but said it’s a ‘significant pipeline’ for the company. The firms include leading larger firms as well as boutiques, he said. The plan was first reported by Financial Times.”
• “Lenkner said potential conflicts—such as a firm with Burford investment also representing defendants in a Burford-funded case—would be addressed at the beginning of any arrangement. Burford would be a passive minority investor in a service company, meaning it wouldn’t have access to confidential information in any cases, he said.”
• “A few states in recent years have loosened strict restrictions on outside investment in law firms, opening a path for litigation funders, private equity firms, and others to pour money directly into firms. Big Four consultancy KPMG in February won approval to open a US law firm under Arizona’s alternative business structure program. Utah, Puerto Rico and Washington, DC also have relaxed restrictions on non-lawyer ownership of law firms to varying degrees.”
• “In states that don’t allow nonlawyer ownership, some capital providers have used ‘managed service organizations’ as workarounds. Law firms are split in these arrangements, with the legal work flowing through a traditional lawyer-owner operation and the MSO controlling firm assets and selling back-office services to the law firm for a fee. The model has traditionally been used to allow outside investors into accounting firms and medical practices.”
• “Lenkner says Burford is exploring both options, but the MSO structure might be more accessible for national law firms.”
• “‘This is for us an incremental step, but an exciting one,’ said Lenkner. ‘It’s where the profession is going and the question is not whether these transactions will happen, it is how quickly and with whom.'”

“Law Firm MSOs and Legal Ethics Regulations: Lessons from Texas Opinion 706” —

• “The Professional Ethics Committee for the State Bar of Texas (Committee) in February 2025 issued Opinion No. 706, the first ethics opinion that squarely addressed the use of law firm management service organizations (MSOs).1 The Opinion is unique for two reasons. First, it provides guidance for the use and operation of law firm MSOs. Second, in doing so, it implicitly acknowledges the permissibility of such a structure. In the authors’ work in the law firm MSO space, we are asked nearly daily about the ethical permissibility of the relationship between law firms and MSOs. We, like the State Bar of Texas, believe that these relationships can (and currently do) exist entirely within the bounds of the legal regulatory structure – but only when properly planned, controlled and maintained.”
• “By way of background, law firm MSOs function much like the MSOs that have appeared in other professional service industries. As discussed in a previous Holland & Knight article, MSOs exist to assist professional service organizations – such as healthcare companies, accounting companies and law firms – with the administrative challenges that are associated with running those organizations. ‘In a typical MSO arrangement, the professional retains and exercises control over all professional aspects of the relevant practice [while] … the MSO, which is often owned by investors, provides all of the administrative services and nonprofessional personnel needed to support the practice, pursuant to a long-term management services agreement.’2 The aim of the model is to allow the professional to focus primarily on the professional relationship with their client, while the MSO handles the administrative burdens of the business.3 This structure allows an MSO to take advantage of innovating and professionalizing the business needs of the professional organization.4 This dual structure is becoming increasingly popular in the legal profession. Lawyers recognize the benefits of being able to hand off the ‘business of law’ while keeping control over the ‘profession of law’ – the actual serving of clients in an attorney/client relationship.”
• “While the law firm MSO structure goes to at least 2006,5 there are few people openly discussing these models in the legal profession and even fewer people or organizations writing about them. That is one of the reasons that Opinion No. 706 is so interesting to those of us practicing in the law firm MSO space: It is the first ethics opinion to provide guidelines around properly structuring law firm MSOs. More interestingly, the Committee implicitly approves the use of those very structures.”
• “Perhaps the most nuanced portion of Opinion 706 involves the situation where a lawyer refers his or her clients to a company in which the lawyer has an ownership interest.10 In this case, the company is not merely an independent service provider – it becomes part of the lawyer’s financial landscape. This dual role raises conflict concerns under Rule 1.06 and triggers the business-transaction requirements of Rule 1.08.”
• “Here, Opinion 706 draws a careful but firm line: Where a lawyer refers a client to a law-related business in which the lawyer has a personal financial interest,11 the referral constitutes a business transaction with the client.12 As a result, the lawyer must comply with the full set of requirements in Rule 1.08, including:
  • ‘full disclosure of the terms and nature of the transaction
  • a recommendation that the client seek independent counsel
  • informed, written consent from the client”
• “These safeguards ensure that the client understands the lawyer’s dual role and the potential for divided loyalties. The mere fact that the referred services are not strictly ‘legal’ in nature does not eliminate the duty of disclosure. Indeed, the Committee notes that, under the facts presented, it is unclear whether 1) the lawyer’s law firm will be using the Company’s services in the representation of the law firm’s clients or 2) the Company’s services will be engaged in general law firm operations or management. Ultimately, it concluded that in situations that implicate the former, ‘Lawyer A’s investment in the Company may create a conflict of interest and may require written disclosure and informed consent under Rules 1.06 and 1.08.'”
• “Importantly, the opinion does not prohibit such referrals outright (which is consistent with the view other jurisdictions have taken on the increasingly common practice). Rather, it insists that lawyers treat them with the seriousness and transparency required when engaging in any financial transaction with a client.”
• “As the legal marketplace continues to evolve, lawyers must remain vigilant about the ethical implications of innovation. Structuring law firm MSOs can be complicated, and an attorney must be careful to ensure that the needs of attorneys, investors and, most important, clients are met. While acting only as persuasive authority, Opinion No. 706 confirms that, when structured correctly, law firm MSOs are a viable option for lawyers, investors and service providers.”

“Firm’s Failed Tech Venture Foretells Big Law’s AI Sales Struggle” —

• “Norton Rose launched a Chicago office in 2022 with a lofty target: the firm and a tech company owned by a newly recruited partner would introduce 150 clients to a new legal workflow management tool called Proxy.”
• “Three years later, the relationship didn’t record a single sale to a firm customer. The reasons for the failure are laid out in dueling lawsuits filed by Norton Rose and the company, NMBL Technologies, led by now ex-partner Daniel Farris.”
• “The fight comes as firms are making more tech investments than ever, diving headfirst into buzzy artificial intelligence tools. Many of those investments are bound to fizzle out, but consultants expect successful ventures will mimic Norton Rose’s plan: sell tech-enabled legal products rather than traditional billable hours—a new challenge for law firms.”
• “‘Partners are good at selling legal services; selling products is not in their DNA, and that makes it hard,’ said Jeroen Plink, chief operating officer of consultancy LegalTech Hub. ‘Products are typically sold by product salespeople. Most law firms don’t have product salespeople.'”
• “There’s a long history of Big Law ‘innovation’ efforts promising far more than they deliver, but the Norton Rose-Proxy episode offers a rare peak behind the scenes of the concomitant internal fallout.”
• “NMBL argues that Norton Rose’s top leadership never invested in the company the way it promised and threw up bureaucratic roadblocks that made sales of the service impossible. It wants $15 million to make up for the botched rollout.”
• “Norton Rose, meanwhile, says clients weren’t interested in the tool, noting that an e-mail campaign marketing free trials to clients didn’t receive a single response. The law firm wants as much as $250,000, saying it never would have invested in the tool had it known how poorly it was going to perform in the market.”
  Innovative Focus”
• “Cody was heavily involved in the negotiations to recruit Farris and to partner with NMBL, according to the company’s lawsuit, which catalogues a nearly year-long recruiting effort that involved back-and-forth negotiations over Proxy.”
• “One of the hold-ups was over language for getting 150 Norton Rose clients to sign up for the new technology. The law firm didn’t want to sign up 149 clients and be on the hook for not performing, the NMBL complaint says. So the two sides settled on language that made the number a soft target based on Norton Rose providing ‘commercially reasonable good faith efforts to introduce’ that many clients to the product, according to a copy of the agreement.”
• “NMBL says Norton Rose didn’t meet even that less-burdensome requirement—or other aspects of the agreement.”
• “The firm ‘never had any actual interest in investing in and championing Proxy,’ said Andrew Patton, an attorney representing NMBL. Norton Rose used the Proxy agreement to recruit its cofounders to the firm ‘so that NRF could pursue traditional practices,’ he said.”
• “After original discussions that envisioned Norton Rose introducing all new clients to the products, the firm’s leader later insisted that relationship partners would decide whether to do so, according to NMBL’s complaint.”
• “Even after Farris developed training videos and white papers demonstrating the product, as few as 5% of the firm’s lawyers accessed the materials, NMBL’s complaint says. The firm never hired a ‘client success manager’ as the agreement envisioned.”
• “‘The allegations made by NMBL are without merit. We will vigorously pursue this matter, which should be resolved in Texas’ (where the firm’s suit was filed), a Norton Rose spokesperson said.”

Another from David Kluft: “Should the judge’s first cousin be once removed?” —

• “An SC Circuit Judge was assigned to a court where the judge’s first cousin’s firm frequently practices. The judge is recusing from the cases litigated by the cousin, but asked the Advisory Committee on Standards of Judicial Conduct if recusal was required for all cases involving the cousin’s firm?”
• “The Committee opined that under the SC rules, judges have to recuse when a litigant is within the ‘third degree of relationship’ to the judge, which includes parents, kids, grands, nieces, nephews, uncles and aunts. Cousins are not within this category, and neither are other lawyers at a cousin’s firm, so recusal is not required, but recusal may still be appropriate if the relationship is such that the judge’s impartiality could be questioned.”
• Decision: here.

“Former Highland Capital CEO Seeks Judge’s Recusal, Citing Her Novels as Evidence of Bias” —

• “In a unique twist to an ongoing legal battle, the former CEO of Highland Capital Management, James Dondero, has leveraged the novels authored by a federal judge as part of his latest effort to seek the judge’s recusal from a case central to the company’s contentious bankruptcy proceedings. Dondero argues that the novels reflect potential biases that could adversely affect the fairness of the judicial process.”
• “The issue at stake is the involvement of U.S. Bankruptcy Judge Stacey G. C. Jernigan, who has written several novels under the pseudonym L. A. Starks. Dondero claims that the characters and themes in Jernigan’s work suggest a predisposition that could taint her rulings in the complex financial disputes surrounding Highland Capital. He posits that specific character portrayals and plot lines might not be coincidental and raise reasonable doubts about impartiality.”
• “This unusual argument brings to the fore questions about the intersection of personal expression and judicial responsibility. While judicial recusal requests are typically grounded in concrete financial or personal interests that could lead to a conflict of interest, Dondero’s appeal introduces the interpretation of fictional literature as potential evidence in evaluating a judge’s ability to remain unbiased.”
• “The effectiveness of such an argument remains to be seen, as legal experts are divided on whether references in fiction should impact a judge’s standing to preside over a case. Some view this approach as a strategic maneuver designed to prolong proceedings, while others consider it a legitimate concern. The scrutiny of private writings of public officials is not entirely unprecedented, but it is rare in the context of judicial recusal controversies.”

“Judge sets hearing in bid to remove Mavis lawyers from limo cases” —

• “The judge overseeing civil litigation in the deadly 2018 limousine crash in Schoharie will conduct a hearing next month to determine whether the firm that represents Mavis Discount Tire, Yankwitt LLP, should be removed from the case.”
• “Brian Premo, who represents one of the two plaintiffs still suing the repair chain for work done on the limousine before the crash, wants the lawyers for the firm disqualified.”
• “The White Plains law firm has been leading the legal defense of Mavis in the civil courts. The families of the 20 people killed in the Oct. 6, 2018, crash filed wrongful death lawsuits within a few months of the tragedy. The civil cases were filed in several different counties, but acting state Supreme Court Justice Denise Hartman was assigned to coordinate the collection of evidence and the taking of depositions from witnesses.”
• “Mavis struck legal settlements in all of the civil lawsuits that Hartman has been overseeing, except for two. In each case, it is believed that Mavis agreed to pay roughly $2.25 million per victim.”
• “Lawyers for the Ukaj and Lisinicchia estates, led by Albany attorney Premo, have not settled with Mavis and are seeking to amend their lawsuits to include evidence the State Police collected as part of its investigation into the crash.”
• “They argue that internal Mavis security video recordings show that Mavis mechanics knew that the brakes in the Excursion were dangerous and would stop working at times, contrary to how the firm’s actions were portrayed at the May 2023 criminal trial of Nauman Hussain, who oversaw the limousine company founded by his father. Hussain, 35, was the only person ever charged with a crime in the case. He’s serving a prison term of 5 to 15 years after a Schoharie County jury last year convicted him of 20 counts of second-degree manslaughter. “
• “Mavis, through a spokesperson, declined to comment. Benjamin Allee, the Yankwitt partner who is leading the case, is a former criminal prosecutor in the U.S. attorney’s office for the Southern District of New York. He did not respond to a detailed request for comment. In the past, the law firm has said it did nothing to merit disqualification.”
• “Premo and Francis Young, a downstate attorney who represents the Lisinicchia estate, filed a motion with Hartman seeking the disqualification of Yankwitt from the case.”
• “Hartman has granted a request to hear oral arguments from the lawyers on Sept. 11. Premo and Young allege that Yankwitt attorneys had assisted prosecutors and police so much in the criminal investigation, including with arranging interviews with former Mavis employees, that they could not continue to represent Mavis in the civil cases.”
• “The limo departed from Amsterdam and was making its way to a brewery outside of Cooperstown when its brakes failed on a steep hill. “
• “In his motion to disqualify Yankwitt, Premo alleges that Allee and Yankwitt were given a leg up in negotiating the Mavis financial settlements with the families from their work on the criminal case. He also alleges that former Mavis mechanics who worked on the limo before the crash lied on the stand. Premo says after reviewing the internal videos from the Mavis store in Saratoga Springs, he believes that Mavis mechanics were aware the stretch limo’s brakes had serious mechanical issues and the pedal would drop to the floor at unexplained times, making the limo’s brakes useless.”
• “Hussain never had the limo properly inspected by the state Department of Transportation and lied on state Department of Motor Vehicles registration forms in order to conceal his use of the vehicle for weddings, proms and parties. “
• “In his most recent filing in the motion to disqualify Yankwitt, Premo points out that during Hussain’s trial, former Mavis mechanic Chikezie Okoro told Schoharie Country District Attorney Susan Mallery on direct examination that he never got under the Excursion when it was brought into the shop for work because the shop didn’t have the correct lift for a limo that size. The Excursion weighed about 6 tons.”

“Jackson Walker Settles Judge Romance Claims For $485K” —

• “Jackson Walker LLP has reached a $485,000 settlement with two former bankruptcy clients to resolve a dispute related to the concealed romance of a former partner and former Texas bankruptcy judge David R. Jones, according to a motion filed Friday.”
• “The settlement would resolve claims between Jackson Walker and two related offshore drilling companies, Seadrill Partners LLC and Seadrill Ltd., which hired Jackson Walker to handle their bankruptcy that concluded in 2021 and was overseen by then-judge Jones. The $485,000 settlement would recover more than half of the fees awarded to Jackson Walker in the underlying matter.”
• “‘The settlement amount provides a significant recovery for Seadrill, eliminates the litigation risk associated with continuing to litigate the claims, and eliminates the need for continued attorney fees and costs (including U.S. Trustee quarterly fees) associated with the litigation,’ the companies wrote in their motion for approval of the settlement.”
• “The settlement comes just 10 days after the U.S. Trustee and Jackson Walker told the judge overseeing the instant dispute, U.S. District Judge Alia Moses, that the parties had not been able to reach a deal by her deadline of July 15 and a few months after Seadrill participated in another mediation that failed in the spring.”
• “The Seadrill companies are two of many former Jackson Walker clients whose fee awards to Jackson Walker could be vacated in an action brought by the U.S. Trustee’s Office following revelations of a secret romantic relationship between Jones and former Jackson Walker partner Elizabeth Freeman.”
• “Although Freeman no longer worked at the firm when news of the relationship became public, she was involved in over 30 cases before him while during the relationship. Jones resigned in October 2023 amid an ethics investigation. The controversy has spawned accusations that Jones unjustly favored parties represented by Jackson Walker when they appeared in his courtroom.”
• “The trustee’s office has argued that judgments or orders approving the law firm’s fees in a slew of bankruptcy cases should be rescinded in light of the undisclosed relationship.”

“Trump Got His Judge, But Bove Must Sit Out the President’s Cases” —

• “Emil Bove, who recently was confirmed in a 50-49 Senate vote to be a judge on the US Court of Appeals for the Third Circuit, can and legally must be disqualified from hearing cases involving challenges to President Donald Trump’s actions and policies.”
• “Trump is clearly counting on Bove’s personal loyalty to rule in his favor in any cases that come before Bove. His expectation was confirmed when he posted on Truth Social: ‘He will end the Weaponization of Justice, restore the Rule of Law, and do anything else that is necessary to MAKE AMERICA GREAT AGAIN. Emil Bove will never let you down.'”
• “But Trump may have been too clever by half. Federal law requires judges who have a personal relationship with a party to recuse themselves from cases. The president may have used a judicial appointment slot to appoint an appeals court judge who will be barred from hearing Trump-related cases, just the opposite of what he wanted.”
• “Justices and judges whose impartiality might ‘reasonably be questioned’ must disqualify themselves from proceedings, under 28 U.S. Code Sec. 455. The code includes a litany of reasons a judge must be disqualified, including conflicts as vague as having ‘personal bias’ to specific instances of serving as an attorney for one of the parties or expressing a public opinion about the merits of the case they are hearing.”
• “Additionally, the US Supreme Court has been emphatic that due process of law, guaranteed by the Constitution, requires an impartial decision-maker.”
• “Bove was previously Trump’s private personal defense attorney in multiple criminal cases. In People v. Trump, Bove unsuccessfully defended Trump against 34 felony counts of falsifying business records as hush money to porn star Stormy Daniels.”
• “Trump then hand-picked Bove as principal deputy attorney general, a role in which he did Trump’s bidding at the Department of Justice. According to a high-level whistleblower, Bove told subordinate DOJ lawyers they may need to tell courts ‘fuck you’ if they don’t like courts’ decisions and instructed them to ignore court orders during a contentious legal battle in an immigration case. Bove has denied the accusations.”
• “At the DOJ, Bove sent memos to the acting FBI director instructing the FBI to ‘effectuate the termination’ of FBI employees involved in investigating and prosecuting Jan. 6 insurrectionists and directed the firing of numerous line prosecutors working on the cases.”
• “It is all but self-evident that Bove’s personal and professional loyalty to Trump demonstrates that his ‘impartiality might reasonably be questioned’ when it comes to matters involving Trump.”
• “Recusal isn’t optional. Both state and federal laws provide that judges are required to recuse themselves if grounds exist to do so.”
• “A judge may be subject to punishment for not recusing themselves, depending on the circumstances. If proper grounds for recusal did exist, and the judge was aware, there may be penalties levied against the judge for not doing so. Wrongful failure to recuse may also be grounds for appeal which could result in the case being dismissed or remanded for a new trial. If a judge refuses a recusal request, a party may move to have him recused.”
• “Because it’s unlikely Bove will agree to recusal, parties challenging Trump may need to regularly move for Bove’s recusal from cases involving Trump, citing reasonable questions as to Bove’s impartiality.”

David Kluft with another find: “If a judge is given an advisory opinion telling him to recuse, can he pretend there was no opinion and stay on the case?” —

• “A NY judge running for reelection was assigned a case being litigated by a member of his campaign committee, whose firm was holding fundraisers for the judge.”
• “Opposing counsel asked that the judge recuse. The judge contacted the Advisory Committee on Judicial Ethics, and the Committee issued an opinion telling him he was disqualified.”
• “The judge concealed the opinion and stayed on the case through the election. After he was re-elected, he revealed the opinion to the parties and declined to recuse anyway.”
• “Opposing counsel appealed and, of course, the Appellate Division reversed and remanded the case to a new judge. Public censure from the Commission on Judicial Conduct.”
• Ruling: here.

Actually, it’s a Double Kluft day, as he’s spotting all the interesting needles out there: “Can a lawyer testify as an expert witness in matters adverse to former clients?” —

• “A proposed CA ethics opinion would allow a lawyer ethically to testify as an expert adverse to a former client if it does not harm the client with regard to the matter in which the lawyer represented them; and if the lawyer does not disclose or use confidential information.”
• “Similarly, no ethical principal prevents a lawyer from representing a party after testifying against them as an expert (provided there is otherwise no conflict). Public comments to the proposed opinion are due August 18, 2025.”
• Read more and submit comments to the State Bar: here.

“Judge Won’t Recuse Over Past Work With DraftKings Counsel” —

• “A California federal judge presiding over a proposed class action against DraftKings regarding its fantasy sports games offerings rejected a request from the plaintiffs to recuse himself over concerns that an attorney for the defense has ties to the court.”
• “U.S. District Judge Charles R. Breyer acknowledged in his single-page Thursday order that Richard Patch of Coblentz Patch Duffy & Bass LLP was formerly a law partner of the court more than 25 years ago. The court has also hired the Coblentz Patch law firm in the past to do estate work.”
• “‘That said, the court does not automatically recuse in matters where Coblentz appears before the court, and there being nothing particular about this case that would warrant recusal, the court declines to recuse,’ Judge Breyer said.”
• “A trio of DraftKings customers filed a proposed class action accusing the sports betting operator of fraudulent behavior, saying its daily fantasy sports games and other contests circumvent California’s ban on sports betting.”
• “Fantasy wagers are no different from traditional proposition betting because they cannot control the outcome, the June 1 complaint filed by California residents Brandon Moore, ZhiCheng Zhen and Jonathan Smith said. Combined, the men have lost thousands of dollars on the betting app since May 2019, they claimed, saying they believed they were placing legal wagers.”
• “The plaintiffs recently filed with the court the July 3 official opinion of California Attorney General Rob Bonta saying that daily fantasy sports games violate the state’s penal code because they involve betting on sports, which is prohibited in the Golden State.”
• “In November 2022, California voters rejected two measures that would have legalized sports betting in the state. Proposition 27 would have legalized online sports betting for companies that could pay a hefty licensing fee and partner with a tribe. Proposition 26 would have opened the door for in-person sports betting at tribal casinos and a handful of racetracks across California.”

“Insurers Wage ‘Logically Inconsistent’ War on Lawsuit Investors” —

• “Some of the largest US insurance companies are ramping up attacks on litigation funders, even as their peers offer related products.”
• “Insurers blame outside funders behind plaintiffs’ lawyers in mass tort cases—like those alleging harm from talc, opioids, and weedkiller Roundup—for flooding the courts and driving up premiums. They’ve promised to keep up the pressure after legislation to impose a 40% tax on funders stalled in Congress, including by refusing to write policies for litigation finance companies.”
• “But the pushback extends beyond the funders fueling mass tort suits. It also targets those who put money behind a wide range of commercial disputes, including many for which insurers offer their own contingent risk policies.”
• “‘I find it logically inconsistent,’ said Ed Gehres, managing partner at Invenio LLP, a law firm focused on litigation finance transactions. ‘Whether they like it or not, the insurance companies cannot escape the fact that they are participants in the monetization of litigation.'”
• “Major insurance brokerage firms like Marsh McLennan, Lockton, Willis Towers Watson, and Alliant offer litigants and law firms policies covering contingent risk. The policies underwrite case dockets, allowing policyholders to get cheaper capital from funders. Some insurers will also directly underwrite funders’ investments.”
• “Still, insurers have joined the chorus of corporate interests to bring more regulation to the $16.1 billion litigation finance industry. Nationwide, Liberty Mutual, and Sentry were among the massive insurers who lobbied on the litigation finance tax bill, public records show.”
• “The leaders of Chubb and Marsh McLennan pledged to continue fighting the industry after the measure was dropped from the sweeping tax and spending bill signed by President Donald Trump on July 4. They said rising jury awards for car accident cases have spiked the price of auto insurance, and blamed litigation finance for driving advertising in mass tort cases.”
• “Marsh, an insurance broker and subsidiary of Marsh McLennan, places contingent risk policies but does not work with litigation funders, according to Daniela Raz, a senior vice president for the company. Raz worked at litigation funder Omni Bridgeway before joining Marsh in 2023 to work in its contingent liability group.”
• “‘Litigants and law firms on the plaintiff side of ‘the v’ seek out insurance solutions for a number of reasons, including that they can retain more proceeds than they would in an uninsured litigation finance transaction,’ she said. ‘Marsh helps those clients by sticking to our knitting, which is insurance.'”
• “Contingent risk policies put insurers at odds with their messaging. The product is often used in the M&A context, insuring against litigation to help a deal move forward, but there are also a variety of products used by and in tandem with litigation funders.”
• “WIP, or ‘work in progress’ insurance, allows law firms to insure their case dockets. The firms can then take out loans from funders against the policies. Funders will also insure their deals to protect their investment or provide funding to pay premiums to insurance companies.”
• “‘Law firms focused on consumer litigation, including mass tort and personal injury cases, raise more concerns for insurers because the defendants in those cases are typically insured,’ said Raz. ‘Conversely, commercial litigation firms specialize in cases alleging claims like antitrust, contract, and IP, in which there is typically no insurance on the defense side.'”
• “The litigation finance industry is typically broken up into two different categories: those who finance commercial cases like antitrust, breach of contract, and intellectual property, and those who issue loans to mass tort and personal injury law firms against their docket of cases. Some funders participate in both areas.”
• “Consumer legal funding involves loans directly to plaintiffs, rather than their lawyers. The loans, against a potential award in a pending legal claim, are used for claimants’ personal expenses, not litigation.”
• “‘It’s three distinct buckets and three distinct purposes,’ said Eric Schuller, president of the trade group Alliance for Responsible Consumer Legal Funding. ‘So why are you lumping them all together and saying we’re going to do a one-size-fits-all?'”
• “For Stef Zielezienski of insurance industry trade group American Property Casualty Insurance Association, the different types of funding are similar enough. The group, which says its members include 1,200 insurance companies, has lobbied on new regulations.”
• “‘The whole thing is third-party litigation finance,’ said Zielezienski, APCIA’s executive vice president and chief legal officer. ‘I prefer to package it together.'”

“J&J Loses Bid To Probe Beasley Allen Talc Litigation Funding” —

• “A special master found Monday there is no reason to believe third-party funders are influencing Beasley Allen Law Firm’s decisions in a massive talc litigation in New Jersey, defeating a subpoena from Johnson & Johnson digging into alleged third-party litigation funding.”
• “Special master Joel Schneider said in an order that the mere fact that Beasley Allen has opposed various settlement offers from the pharmaceutical giant in the multidistrict litigation over J&J’s talcum powder products is not evidence the firm is being controlled by litigation funders; the parties simply disagree about the value of the claims, he said.”
• “‘This is not the first nor will it be the last MDL where counsel for plaintiffs and defendants differ about the settlement value of plaintiffs’ claims,’ Schneider said. ‘Defendants’ effort to portray [Beasley Allen] as a lone wolf with regard to settlement is unavailing.'”
• “Schneider rejected J&J’s argument that it has a ‘right to get to the bottom’ of any possible third-party litigation funding at Beasley Allen. Beasley Allen represents thousands of clients in the multidistrict litigation in the District Court of New Jersey.”
• “Schneider denied a similar discovery request from J&J in July 2024 and said Monday that no new information had come to light to persuade him to decide differently.”
• “‘The [special master] finds that no new relevant developments have been revealed to alter the [special master’s] previous order and, accordingly, defendants’ motion will be denied,’ Schneider said.”
• “In the time since the last ruling on J&J’s third-party litigation funding subpoena on Beasley Allen in July 2024, J&J has pursued a $9 billion settlement via bankruptcy in Texas which was ultimately dismissed in March.”
• “In the New Jersey case, the company claimed that alleged voting irregularities on Beasley Allen’s part during the Texas bankruptcy, as well as the firm’s general opposition to approving that plan, warranted a closer look at any possible third-party litigation funding.”
• “Schneider turned down that argument on Monday, saying ‘voting issues and disputes that arose in the Texas bankruptcy are far removed from the present litigation financing discovery dispute.'”
• “He added that, regarding Beasley Allen’s decision to oppose the Texas bankruptcy settlement, that ‘now is not the time or context to address tangential fact disputes not related to the merits of this action.'”
• “According to Schneider, J&J mounted a new argument at oral argument that Beasley Allen is using its clients’ claims as collateral for different loans, but he said there is also no evidence to support that argument.”

“Trends in Transparency in Patent Litigation Funding” —

• “Over the past decade, third-party litigation funding (TPLF) has risen to prominence in U.S. patent litigation. The high cost of patent litigation can create an obstacle for cash-strapped inventors and non-practicing entities, who increasingly seek out third party funders to fund their patent monetization or enforcement strategies.”
• “At the same time, funders have discovered that the high stakes—and high returns—of patent litigation can create an attractive investment vehicle. Given that alignment of interests, it is no surprise that TPLF in patent cases has surged over the past decade, with some estimates indicating that as of 2021, nearly a third of all patent litigation is now funded.”
• “One key issue that has arisen in funded patent litigation is transparency—in other words, to what extent must funder involvement in a patent infringement action be revealed? This article tackles this issue of transparency in litigation funding of patent cases, and discusses practical impacts for companies involved in patent litigation that may be funded.”
• “The surge in litigation funding has been met with a cry for transparency, not only by companies sued in patent cases, but also by lawmakers.”
• “Three main concerns that have been driving these demands for transparency in TPLF. The first stems from the traditional concepts of procedural jurisprudence and how those issues may be impacted by funder involvement.”
• “Funders may often retain settlement vetoes, select counsel, or drive appeals in ways that some may argue serve investment return profiles more than commercial reality. These issues, if not properly addressed, can be at odds with settled legal and judicial principles, such as conflicts of interest and standing.”
• “These concerns militate against secrecy in funding, and favor transparency, so that conflicts of interest can be fully vetted, the various rules of ethics properly adhered to (e.g., who are the decisionmakers in any given case—the client, or an outside investor), and questions of standing can be properly tested.”
• “Secondly, businesses that are more often on the defense side, and which do not typically rely on litigation funding, will rightly tend to view a lack of transparency on TPLF as unfair, and contrary to their interests.”
• “As a recent example, on Oct. 2, 2024, a group of the largest U.S. corporations signed a letter to the Judicial Conference, urging the Advisory Committee on Civil Rules (Committee) to amend the Federal Rules of Civil Procedure to adopt a uniform rule regarding TPLF disclosure.”
• “The letter cites Federal Rule of Civil Procedure 26(a)(1)(A)(iv) requiring defendants to disclose insurance agreements, to argue that this should apply to plaintiffs for TPLF, under the same rationale that transparency ‘will enable counsel for both sides to make the same realistic appraisal of the case, so that settlement and litigation strategy are based on knowledge and not speculation.'”
• “Other district courts have employed similar local rules requiring disclosure of parties with financial interests, such as Northern District of California’s Local Rule 3-15 and District of New Jersey’s Local Civil Rule 7.1.1.”
• “However, even in districts that allow for discovery into TPLF, courts often require a showing of relevance or good cause, e.g., where the funder has authority to make material litigation or settlement decisions, where there are inadequate protections for interests of the parties, or where there may be conflicts of interest.”
• “The most recent cases have largely continued this trend, with courts evaluating TPLF-related discovery requests on a case-by-case basis, generally granting discovery into the identities of funders, but denying further discovery absent a specific showing of relevance. Samesurf, Inc. v. Intuit, Inc., No. 22-CV-412, 2024 WL 4994338, at *1 (S.D. Cal. Dec. 4, 2024); see also Haptic, Inc. v. Apple, Inc., No. 24-CV-02296, 2025 WL 1569306, at *3 (N.D. Cal. June 3, 2025) (holding valuation-related documents to be relevant but protected by work-product privilege); Entangled Media, LLC v. Dropbox Inc., No. 23-CV-03264-PCP (VKD), 2025 WL 1069896, at *4 (N.D. Cal. Apr. 8, 2025) (allowing partial discovery into a security agreement showing funder’s security interest in the asserted patents).”

“J&J Talc Evidence Gets Review by Ex-Judge at Drugmaker Law Firm” —

• “A retired federal judge will help decide the fate of thousands of Johnson & Johnson baby powder cancer lawsuits even though her law firm represents the drugmaker in other matters. Freda Wolfson was appointed earlier this summer to re-examine how experts analyzed some scientific evidence on the link between J&J’s talc-based powder and cancer. She has deep expertise after conducting a similar inquiry while overseeing suits accusing J&J of hiding its baby powder’s health risks.”
• “The 71-year-old former judge supervised the consolidation of the federal cases for seven years before retiring in 2023 and joining the New Jersey-based law firm of Lowenstein Sandler. That firm represented the J&J unit that first filed for bankruptcy in 2021.”
• “So-called special masters like Wolfson seldom draw public attention, but her role is in the spotlight because conclusions on expert analysis could bolster or doom plaintiffs’ chances of winning big verdicts against J&J. The company already has paid out billions of dollars in damages in state court trials over claims its talc powder caused cancer — a contention that the drug maker has consistently denied.”
• “U.S. District Judge Michael Shipp in Trenton — who inherited the sprawling baby powder litigation from Wolfson — determined before naming her as a special master that she doesn’t have a conflict of interest under federal ethics rules. Shipp found she disclosed her law firm’s ties to J&J and walled herself off from colleagues who work on ‘wholly unrelated’ company matters. Wolfson will evaluate expert evidence that surfaced after she okayed the science underlying the litigation in 2020.”
• “While lawyers on both sides consented to Wolfson’s role and agreed to split her fees, some legal scholars say the appointment is troubling because of the firm’s ties to J&J.”
• “‘It’s really not a good look to pick someone whose law firm represents J&J – even if it isn’t in the baby powder cases,’ said Carl Tobias, a University of Richmond law professor who teaches about product-liability cases. ‘You don’t want to have any appearance of conflicts when it comes to making recommendations on whether these cases should go to trial.'”
• “Wolfson said in an email her prior management of the cases and familiarity with the proper standards for expert-witness testimony makes her well-positioned to review the new evidence. ‘To the extent any potential conflict could be perceived, the parties expressly and knowingly waived any such objection,’ Wolfson said.”
• “The fact that Lowenstein Sandler represents J&J in corporate matters not related to talc doesn’t pose a conflict in the baby powder cases, she said in a June affidavit. A spokesman for the law firm wouldn’t specify what types of cases it handles for J&J.”

“Duterte victims’ lawyer no objection to DQ bid vs ICC prosecutor” —

• “The camp representing victims of the bloody drug war carried out under then-president Rodrigo Duterte said it has no objections if the International Criminal Court (ICC) disqualifies the lead prosecutor who investigated the killings, in line with the ex-leader’s petition.”
• “‘In the case of the Philippines, even if Khan is removed, there won’t be such serious [ramifications],’ human rights lawyer and ICC assistant to counsel Kristina Conti said in an interview Sunday.”
• “Conti made the remark after Duterte’s lead counsel, Nicholas Kaufman, petitioned the ICC to disqualify chief prosecutor Karim Khan, citing concerns over impartiality.”
• “Kaufman told the ICC that Khan had prior involvement in a similar case, representing drug war victims in his capacity as a private lawyer. Details of the defense’s submission were largely redacted, making the timeline unclear.”
• “The defense argued that Khan must be disqualified under Article 42(7) of the Rome Statute, the ICC’s founding treaty, which bars prosecutors from participating in a case where their impartiality might reasonably be doubted. The rule applies if the prosecutor was previously involved in the same or a related case involving the person under investigation.”
• “Conti said that Khan’s current leave due to allegations of sexual misconduct would not significantly impact the legal battle, as deputy prosecutor Mame Mandiaye has taken over to ensure proceedings continue. She also acknowledged Kaufman’s points, saying she had no knowledge of Khan’s alleged prior involvement in an identical case.”
• “Kaufman claimed Khan failed to disclose this ‘blatant conflict of interest’ from the start of the probe until the ICC Pre-Trial Chamber issued a warrant against Duterte on 6 March, questioning the prosecutor’s impartiality.”
• “Khan became chief prosecutor in 2021, succeeding Fatou Bensouda, who began the preliminary probe in February 2018. The investigation officially began on 15 September 2021 but was deferred two months later at Duterte’s request.”
• “In ICC proceedings, victims have an independent role separate from the prosecution. They are represented by a legal representative provided by the court, who may present victims’ views and call their own witnesses, which could include state officials.”
• “Earlier, Conti noted that the ICC may call ‘insider witnesses’ against Duterte, including police officers and other law enforcers — a common practice in international tribunals.”
• “Duterte, 80, has been detained at Scheveningen Prison in The Hague, Netherlands, since his arrest in March in Manila. He is awaiting confirmation of charges on 23 September for one count of crimes against humanity over killings recorded from 1 November 2011 to 16 March 2019, spanning his time as Davao City mayor and president.”

“Workday Wants Firm DQ’d Over Privileged Info In Atty’s Suit” —

• “Attorneys at Webb Law Group APC should be disqualified from representing an ex-Workday Inc. attorney in his bias suit against the company and should face sanctions for their ‘egregious behavior’ in disclosing privileged information in a publicly filed document, Workday told a California federal magistrate judge.”
• “A draft of a proposed second amended complaint Anthony C. Hill’s lawyers at Webb Law shared with Workday during the course of his race and disability bias suit included privileged and confidential information that Hill learned during his work as senior counsel for Workday, the finance and human resources platform explained in a motion Tuesday.”
• “Even though Workday informed Hill’s attorneys that the draft amended complaint contained the privileged information and asked them to remove or redact it, they filed the complaint anyway, including the confidential information, the company said in a motion to disqualify and sanction Webb Law.”
• “‘Plaintiff’s attorneys were on notice that information contained in the SAC was privileged information plaintiff himself could only be aware of in the course of providing legal advice to Workday, they were given the opportunity to rectify the issue prior to filing, and instead of engaging with Workday on a matter as important as the attorney-client privilege, they intentionally filed the privileged and confidential information on the public docket,’ Workday asserted.”
• “Once the proposed amended complaint was filed, Workday asked Hill to file a motion to remove the incorrectly filed document, but Hill’s attorneys refused. When Workday contacted the court to request that the document be locked, those lawyers emailed the ECF help desk to demand that the document be made publicly available.”
• “Workday then moved to seal portions of the second amended complaint, but Hill opposed Workday’s motion despite conceding that it contained privileged information, according to the company.”
• “Webb Law’s actions over the course of the incident ‘appear calculated to cause injury,’ according to Workday, which said that Hill’s attorneys could have engaged with the company to resolve the issue, sought guidance from the court, or provisionally filed the proposed amended complaint under seal.”
• “But instead of taking any of these ‘reasonable, efficient and burden-free options,’ Webb Law chose to disclose the information in its filing and interfered with Workday’s steps to prevent public disclosure, according to Workday.”
• “‘The law is clear that where, as here, an attorney who comes into possession of an adversary’s privileged or other confidential materials uses such materials to gain advantage, including to prepare pleadings, the attorney is subject to disqualification,’ Workday said.”

David Kluft notes: “Can I represent two employees in a failure to promote case if there was only one promotion available?” —

• “Two employees of a NYC municipal agency sued for employment discrimination after the agency promoted someone else instead of them to a job opening.”
• “The agency argued that both employees couldn’t be represented by the same counsel, because there was only one promotion available (a disputed point) and the plaintiffs would be competing with each other to recover for denial of a single promotion.”
• “The federal court found that, at least at the liability stage of the proceeding, each plaintiff only had to prove their qualifications relative to the person that got the job, not relative to each other.”
• “The Court acknowledged a potential for conflicts of interest, depending on the jury’s damages methodology, but found that ‘Plaintiffs could waive most conflicts imaginable under the possible methodologies,’ so with the appropriate informed consent, competent and diligent representation was possible.”
• Decision: here.

“NC Atty Says Ex-Wife Has No Claim To Firm’s Future Earnings” —

• “An intellectual property lawyer in North Carolina told the state’s top court that his ex-wife isn’t entitled to half the value of his law firm in their divorce, arguing that whatever he earns from the firm’s goodwill in the future can’t be divvied up as part of the marital estate.”
• “Jason M. Sneed of Sneed PLLC said in a reply brief Thursday in the North Carolina Supreme Court that neither his firm’s personal goodwill tied to his experience and reputation as a lawyer nor its enterprise goodwill stemming from the value of the business itself count as marital property under state law.”
• “Personal goodwill is never included, Sneed said, and enterprise goodwill in a solo practice like his is indistinguishable from the professional who runs it.”
• “‘Under the equitable distribution statute, marital property only includes property acquired during the marriage and before separation,’ Sneed said. ‘But future earnings are property necessarily acquired after separation. Goodwill, as future earnings, doesn’t meet the statutory definition.'”
• “According to the brief, the North Carolina Court of Appeals was therefore wrong to affirm the trial court’s equitable distribution order requiring Sneed to pay his ex-wife Charity Johnston $1.55 million, or half the value of Sneed PLLC on the day of their separation.”
• “Sneed is a former Alston & Bird LLP partner who opened his own boutique intellectual property practice in 2011, according to his LinkedIn profile. He divorced Johnston in 2016 after accusing her of infidelity, setting off a decade-long dispute over how to divide up their marital estate.”
• “At trial in 2021, a business valuation expert testified that Sneed PLLC was worth $3.1 million as of the date of separation. According to court filings, the expert said that roughly 90% of the firm’s value derived from Sneed’s personal goodwill, while the remaining 10% was enterprise goodwill.”
• “In September 2022, a judge awarded Johnston half the value of her ex-husband’s law firm, which was to be paid out in monthly installments of roughly $8,600 over 15 years,court documents state. The North Carolina Court of Appeals affirmed that decision in May 2024.”
• “On appeal to the state’s high court, Sneed has argued his law firm’s goodwill should never have been lumped into the marital estate since it represents future earnings after the date of separation.”
• “In response, Johnston pointed to North Carolina Supreme Court precedent in which she said the justices found goodwill in a professional corporation is marital property. She also said her ex-husband failed to preserve his arguments as to enterprise goodwill on appeal.”