Bressler Risk Blog

“Disciplinary Commission publishes advisory opinion on conflicts of interest” —

• “The Indiana Supreme Court Disciplinary Commission has issued an advisory opinion focused on when attorneys must decline to represent a client or withdraw from a current representation due to a conflict of interest.”
• “‘While realized and potential conflicts inevitably arise in one’s practice, attorneys must be diligent to avoid damaging the interests of those to whom they owe a duty,’ the commission wrote. ‘To that end, it is vitally important that attorneys have a thorough conflicts check procedure in place.'”
• “‘Conflicts analysis is nuanced and fact specific,’ it continued. ‘Attorneys should carefully evaluate who the actors are and what interests are at stake in a matter. Thought should be given as tohow potentially far-reaching the effects of the representation are to avoid damaging the interests of someone to whom the attorney owes a duty but who may not even be a party to the instant matter.”
• “In its July 2022 advisory opinion, the commission posed four hypothetical ‘ethical minefields'”:
  • “The first hypothetical situation concerns duties to prospective clients. In that scenario, the commission presented a hypothetical dissolution case in which a wife comes to a law office seeking help and offers material information to an attorney. Ultimately the lawyer isn’t retained, but three weeks later the husband hires the lawyer to represent him in the dissolution proceeding.”
  • “The second hypothetical presents a scenario in which four individuals who form a limited liability company, each owning 25% shares, insist that a lawyer represent each of them individually and agree to waive all conflicts. However, it quickly appears that one of the individuals, individual A, will contribute the lion’s share of monetary funding to start the LLC.”
  • “In the third hypothetical, the Disciplinary Commission gave the example of a lawyer who served as a client’s go-to for all legal questions and representation needs for many years. One day, the client approached the lawyer with an offer: The lawyer would provide legal services to the client’s business, Widget Corp., for two years in exchange for 5,000 shares of stock in Widget Corp. The lawyer accepted the offer and agreed to continue representing the client in his individual capacity in addition to representing Widget Corp.”
  • “In the final hypothetical, the commission gave an example of a conflict that might arise during representation. Specifically, a lawyer has represented Client A, a bricklayer, for years and is currently representing Client A in contract negotiations with a supplier. The lawyer was just hired by Client B, a homeowner, for a potential lawsuit against Client B’s builder due to water seeping into Client B’s home. After Client B’s suit against the builder is filed, the builder files a third-party complaint against Client A claiming that all damage to the home is due to faulty bricklaying. Client A calls the lawyer and asks him to represent Client A in Client B’s lawsuit.”
• For the Court’s review of those scenarios in detail, see the complete opinion: “Detecting and Navigating Conflicts of Interest.“

“Why Judges Keep Recusing Themselves From a N.Y.C. Vaccine Mandate Case” —

• “The city’s teachers, who sued over vaccine requirements, said the judges assigned to the case owned thousands of dollars of Covid-19 vaccine-maker stock, which could affect their rulings.”
• “Over two weeks, the teachers’ lawyers have asked three successive judges assigned to the case to recuse themselves and have it reassigned. The lawyers cited financial disclosure forms, listing each judge as owning thousands of dollars of stock in Covid-19 vaccine manufacturers, whose share price, they argued, could be helped or hurt by their rulings.”
• “‘The ownership of this stock constitutes a direct financial conflict of interest in the outcome of this case,’ the lawyers wrote on June 9 to Judge Valerie E. Caproni, the first judge assigned to the case.”
• “The escalating dispute highlights a question that has drawn increasing scrutiny in the news media, the courts and in Congress: When should judges disqualify themselves from cases?”
• “Several ethics experts who examined the dispute in the teachers’ case said the successive recusal requests showed how lawyers might find it advantageous to seek a judge’s disqualification if it served a strategic purpose.”
• “Under the law, judges must step away if they own even one share of stock in a party to a lawsuit, said Stephen Gillers, a professor at New York University School of Law. “The one-share rule is easy,” he said. ‘It’s a bright line. It either exists or it doesn’t exist, and there’s nothing to argue about.'”
• “In the teachers’ case, however, the parties were public officials and the city education department — not a company. Then, Mr. Gillers said, the question is whether the judge’s financial interest ‘could be substantially affected’ by a ruling, which is vague.”
• “There was disagreement among the experts over whether the judges needed to withdraw. Rebecca Roiphe, a professor at New York Law School, said it seemed to her that none were required to do so.”
• “‘The chance that this lawsuit in New York would affect the stock prices of a company like Pfizer, which has a market cap of around $300 billion, are negligible,’ she said. ‘It seems that the judges were instead caving to unreasonable assumptions about their ability to be fair.'”
• “But James Sample, a Hofstra University law professor, said the issue of appearing impartial is real. ‘Do I think that Judge Caproni and Judge Ramos could have been fair in hearing this case? Absolutely,’ he said. ‘But hearing the case once it was clear that they own significant positions in an interested party fails the optics test. And in recusal law, the optics test matters.'”

“Louisville judge disqualified from Breonna Taylor protester cases” —

• “Kentucky’s Supreme Court has disqualified a Louisville judge from presiding over several cases regarding people who were arrested in the summer of 2020 during a protest regarding Breonna Taylor’s death.”
• “The court cited Judge Josephine Buckner’s potential bias based on her previous employment and social media posts.”
• “According to the motion for removal, the prosecution said Buckner should be disqualified from presiding over the protestors’ cases because she worked for Louisville Attorney Sam Aguiar’s law firm while he represented Taylor’s family.”
• “Other members at the law firm also represented other protestors who had been arrested that summer, the Commonwealth said.”
• “In response to the prosecution’s affidavit, Buckner confirmed that she did work for Aguiar before her appointment to the bench. However, she says her previous employment with the Jefferson County Attorney’s Office, which defended the civil action regarding Taylor’s death, ‘is as relevant to the present case as her previous employment with the Aguiar firm.'”
• “The Commonwealth further argued in their motion that Buckner shared three Facebook posts relating to Taylor’s death between August 2020 and June 2021. Three of the posts were made by Aguiar and Lonita Baker, who also represented Taylor’s family.”

“Lawyer Can’t Have 2 ‘Masters’: A Judge Just Disqualified This New Jersey Law Firm” —

• “A judge ruled that Pashman Stein Walder Hayden may not concurrently represent a corporation and a part owner in a dispute with another part owner.”
• “Judge Albert Rivas ruled after plaintiff counsel cited case law finding that a similar arrangement violated the Rules of Professional Conduct.”
• “The judge also declined bids to quash a subpoena of the plaintiff’s financial records and to broaden the powers of a special fiscal agent in the case.”
• “Pashman Stein is free to continue representing the Uppalapati defendants, but may not also represent AM Logic, Rivas said in an order.”
• “Tallapragada, who allegedly owns 50% of AM Logic, claims in the suit that Madhavi Uppalapati, who isthe alleged owner of the other 50%, has misappropriated $600,000 from the company and won’t let him examine the books. Uppalapati disputes Tallapragada’s ownership claims.”
• “O’Connor said in court papers that the circumstances are similar to those in a 2014 Appellate Division case, Comando v. Nugiel. In that case, law firm Norris McLaughlin was disqualified from simultaneously representing the defendant and the business that the parties were fighting over.”
• “O’Connor, who also represented the plaintiff in Comando, said Rivas’ ruling on Friday ‘reaffirms the Comando decision that I cited in the motion papers, which says you cannot claim that a lawyer has two masters. I see lawyers doing it all the time. Even though the court was pretty clear, I still see it coming up all the time. Trial courts are not quick to disqualify lawyers,’ he said.”

Ira L. Herman, Partner, Bankruptcy & Restructuring at Blank Rome wrote an excellent, in depth piece: “Why Bankruptcy Counsel Must Be Mindful of Ethics” —

• “Counsel and other professionals being engaged to represent a debtor in a restructuring will often face myriad thorny conflicts and conflict-related issues. In the larger cases this is so, at least in part, because of complicated capital structures and interlocking interests.”
• “Somewhat ironically, the conflict issues in the smaller cases often are more difficult because of the very nature of small and closely held businesses and the dollar amounts at stake in such cases.”
• “For example, where a potential debtor is a single-member limited liability company, that single member may have guaranteed the debt of the small business, be its landlord, or have made a secured loan to the business. Additionally, small business ownership creates challenges for counsel when such entity’s interests diverge from those of its owner, who may assume that she or he is the business.”
• “To further illustrate how these issues arise similarly in the larger and smaller cases, retainers and fees regularly are paid on behalf of a debtor by an equity sponsor or an affiliate. In the smaller business cases, friends and family — who may have previously loaned money either to the debtor or its ownership — often pay the freight.”
• “In matters large and small, Rule 1.8(f) of the American Bar Association’s Model Rules of Professional Conduct must be consulted. A lawyer shall not accept compensation for representing a client from one other than the client unless:
  • The client gives informed consent;
  • There is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and
  • Information relating to representation of a client is protected as required by Rule 1.6.”
• “The Bankruptcy Code does not define “adverse” interest in any way. In contrast, the term “disinterested person” is defined in Section 101(14). The term “disinterested person” means a person who:
  • Is not a creditor, an equity security holder, or an insider;
  • Is not and was not, within two years before the date of the filing of the petition, a director, officer, or employee of the debtor; and
  • Does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, for any other reason.
• “When insiders, affiliates, friends and family show up all over a restructuring, it is a time for counsel to be mindful of the professional responsibilities as a lawyer practicing in an area of law that also has unique rules governing professional conduct.”
• “Counsel’s inquiry cannot start with an analysis of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.[4][5] Rather, the inquiry must start with the ethical rules found in the Model Code of Professional Conduct, including the duties of loyalty and independent judgment and to whom these duties are owed.”

“A Deeper Dive — Who Is the Client? The Ethics Rule Implications for In-House Counsel and Outside Counsel” —

• “Shannon “A.J.” Singleton and Alicia Still delve into the ethical requirements for in-house counsel and outside counsel, extending the discussion of a Showcase CLE program at the ABA Business Law Section’s 2022 Hybrid Spring Meeting.”
• “Their conversation hits on the in-house implications of ABA Model Rule of Professional Conduct 4.2, what it takes to forge relationships with colleagues on the business side and why it matters, and more.”

This is a 25 minute video discussion. The actual 90 minutes CLE presentation is accessible for ABA members. That: “…presentation explores the unique application of the Rules of Professional Conduct and other ethical requirements to the role of in-house lawyers, including client identity, conflicts, confidentiality and privilege, and business and interpersonal relations with clients. The content will also be useful to outside counsel working with in-house lawyers.”

“Goodwin Walls Off Jackson’s Brother-in-Law From High Court Cases” —

• “Justice Ketanji Brown Jackson’s brother-in-law will not receive income from his law firm Goodwin Procter’s work on cases in the US Supreme Court, the firm told the court Thursday.”
• “William Jackson is a partner in Goodwin’s Washington office, where he focuses on health care and life sciences litigation. He does not handle Supreme Court cases, the firm said in a letter to the high court’s clerk.”
• “Other firms have similarly opted to wall off partners with family ties to the court to avoid conflicts of interest. Goodwin’s move comes amid rising calls for the court to tighten ethics restrictions following revelations that Justice Clarence Thomas’ wife, Virginia ‘Ginni’ Thomas, was involved in a pressure campaign to overturn the 2020 election.”

“One good item and one bad item for your Friday” —

• “…the New Hampshire Bar Association has published a pretty good ethics opinion to provide guidance to lawyers that find themselves representing clients who end up seeking out crowdsourcing to help pay their legal fees in connection with matters.”
• “…the guidance on having to be wary about (and make sure you fully counsel your client about) providing any sort of informational updates to those who provide funds whether as a “perk” or “reward” for participation or otherwise and the reminder that funds raised explicitly for the purpose of paying for legal fees and legal expenses cannot then be used to provide the client with financial assistance for living expenses if the lawyer essentially appears to be the one raising the funds or so involved in the effort to raise the funds publicly because of the prohibition in RPC 1.8(e) on lawyers offering that kind of financial assistance.”
• “The opinion does not take the next step though of offering the relatively obvious practical advice that the most flexible way to crowdsource would always be to seek funds for a client to allow them to financially survive their circumstances without promising that all or even any of the funds would go to attorney fees. Once raised and available to the client, the client could then use them for whatever purpose they wish, including paying their lawyer.”

“How mercenary hackers sway litigation battles” —

• “A trove of thousands of email records uncovered by Reuters reveals Indian cyber mercenaries hacking parties involved in lawsuits around the world – showing how hired spies have become the secret weapon of litigants seeking an edge.”
• “For Gupta it was just the beginning. Over the next decade, he and a small coterie of Indian colleagues built an underground hacking operation that would become a hub for private investigators, like Moser, who sought an advantage for clients embroiled in lawsuits.”
• “Reuters identified 35 legal cases since 2013 in which Indian hackers attempted to obtain documents from one side or another of a courtroom battle by sending them password-stealing emails.”
• “The messages were often camouflaged as innocuous communications from clients, colleagues, friends or family. They were aimed at giving the hackers access to targets’ inboxes and, ultimately, private or attorney-client privileged information.”
• “At least 75 U.S. and European companies, three dozen advocacy and media groups and numerous Western business executives were the subjects of these hacking attempts, Reuters found.”
• “The targets’ lawyers were often hit, too. The Indian hackers tried to break into the inboxes of some 1,000 attorneys at 108 different law firms, Reuters found.”
• “Among the law firms targeted were global practices, including U.S.-based Baker McKenzie, Cooley and Cleary Gottlieb. Major European firms, including London’s Clyde & Co. and Geneva-based arbitration specialist LALIVE, were also hit. In 2018, the Indian hackers tried to compromise more than 80 different inboxes at Paris-based Bredin Prat alone.”
• “One of the most prominent was WeWork co-founder Adam Neumann, who hired New York’s Seiden Law Group after learning from Reuters that he and other company executives’ email accounts were targeted by the Indian hackers starting in August 2017, according to four people familiar with the matter.”
• “Indian mercenary hackers have worked in the shadows for at least a decade, helping private detectives get an edge in litigation, a Reuters investigation found. Now one victim – an aviation executive named Farhad Azima – is exposing the secretive industry, with potential ripple effects for legal battles on both sides of the Atlantic… ‘Millions of dollars are being made by hackers, investigators and their instructing law firms from these illegal activities,’ he said. ‘The hack-for-hire companies may be thousands of miles away, but the victims are often U.S. citizens on U.S. soil.'”

Other examples and more detail for the curious or concerned: “Dark Basin: Uncovering a Massive Hack-For-Hire Operation” —

• “Dark Basin is a hack-for-hire group that has targeted thousands of individuals and hundreds of institutions on six continents. Targets include advocacy groups and journalists, elected and senior government officials, hedge funds, and multiple industries.”
• “Dark Basin extensively targeted American nonprofits, including organisations working on a campaign called #ExxonKnew, which asserted that ExxonMobil hid information about climate change for decades.”
• “Several international banks and investment firms, as well as prominent corporate law firms in the United States, Asia, and Europe, were targets. We also found a number of companies involved in offshore banking and finance were also targeted.”
• “We found targeted individuals in many major US and global law firms. Lawyers working on corporate litigation and financial services were disproportionately represented, with targets in many countries including the US, UK, Israel, France, Belgium, Norway, Switzerland, Iceland, Kenya, and Nigeria.”
• “Dark Basin’s activities make it clear that there is a large and likely growing hack-for-hire industry. Hack-for-hire groups enable companies to outsource activities like those described in this report, which muddies the waters and can hamper legal investigations. Previous court cases indicate that similar operations to BellTroX have contracted through a murky set of contractual, payment, and information sharing layers that may include law firms and private investigators and which allow clients a degree of deniability and distance.”

“Officials Balked at a Drug Company’s Tax Shelter. Auditors Approved It Anyway.” —

• “Court documents show the potential conflicts of interest when accounting firms simultaneously help clients avoid taxes and audit their finances.”
• “Consultants at the giant advisory firm EY had devised an elaborate arrangement that would allow Perrigo, one of the country’s leading makers of nonprescription drugs, to avoid more than $100 million in federal taxes. But the company’s outside auditors, at the accounting firm BDO, were questioning the setup’s propriety.”
• “At least one EY official, too, expressed concern that the tax shelter his colleagues had designed was overly aggressive. Even so, auditors at EY, also known as Ernst & Young, eventually blessed the transactions, which federal authorities now claim were shams, according to previously unreported documents made public in a court case last year.”
• “Even so, auditors at EY, also known as Ernst & Young, eventually blessed the transactions, which federal authorities now claim were shams, according to previously unreported documents made public in a court case last year.”
• “Internal EY emails and memos — made public last year in a court case in which the I.R.S. is challenging Perrigo’s tax arrangements and accusing EY of constructing “an abusive tax dodge” — provide a rare inside look at the potential conflicts of interest that arise as a single firm constructs tax shelters and simultaneously audits its own work.”
• “‘When you are a consultant, you are partnering with management. You are trying to make management look really good,’ said Lynn Turner, a former chief accountant at the Securities and Exchange Commission. ‘That’s not the role of an independent auditor.'”
• “While conflicts of interest among accounting firms have troubled investors for decades, there are signs that the conduct of the Big 4 firms is receiving new regulatory scrutiny.”
• “Nowhere is the tension over accounting firms’ multifaceted roles more pronounced than in the lucrative business of advising companies on how to slice their tax bills.”
• “The Big 4 accounting firms — EY, KPMG, PwC and Deloitte — have emerged as perhaps the most powerful private-sector force in U.S. tax policy. They lobby federal officials to tweak tax rules to help their clients. A steady stream of lawyers from the firms rotate in and out of senior tax positions in the Treasury Department, where they write rules favorable to their former clients.”
• “At the same time, the Big 4 firms help companies move profits out of the reach of the U.S. government. Then the companies’ auditors — often a different group of employees from the same firm that created the structures in the first place — have to sign off on the setups. In assessing their legitimacy and the effect on the client’s financial results, the auditors frequently consult with the colleagues who devised the tax strategies.”
• “The I.R.S. is taking a dim view of these transactions.”

“The Big 4’s Tax Problem” —

• “How Perrigo’s tax shelter worked: In 2005, EY devised a plan to help Perrigo, then based in Allegan, Mich., avoid U.S. taxes on its popular anti-heartburn medication, omeprazole. If Perrigo had bought omeprazole from a manufacturer and then sold the pills to customers in the U.S., its profits would have been taxed there. Instead, EY advised Perrigo to set up a subsidiary in Israel, with no employees and no offices, to buy the omeprazole. The shell company then sold the pills to Perrigo in the U.S. at a profit. That meant that Perrigo’s income on the pills largely remained in Israel rather than in the U.S., out of reach of the I.R.S. And because of the vagaries of Israeli tax law, the profits weren’t taxed in Israel, either.”
• “The I.R.S. eventually questioned the transactions and required Perrigo to pay $163 million in back taxes. In a related case, Justice Department lawyers representing the I.R.S. accused EY of enabling a “shell game” and a “flagrant tax scheme gone awry.” The fight went to a federal trial last year. The judge hasn’t announced a verdict yet.”

“Ernst & Young to Pay $100 Million Fine After Auditors Cheated on Ethics Exams” —

• “Ernst & Young, one of the world’s largest auditing firms, has agreed to pay a $100 million fine after U.S. securities regulators found that some of its auditors had cheated on ethics exams — and that the firm did not do enough to stop the practice.”
• “The penalty is the largest ever imposed by the Securities and Exchange Commission against an auditing firm. An administrative civil order filed by regulators said Ernst — also known as EY — had misled investigators, withheld evidence and violated public accounting rules designed to maintain the integrity of the profession.”
• “‘It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams, of all things,’ said Gurbir S. Grewal, the commission’s director of enforcement, in announcing the settlement Tuesday.”
• “The penalty is twice the sum that KPMG, another big audit firm, paid in 2019 to resolve an investigation into similar allegations of cheating by auditors on internal training exams.”
• “Ernst, which admitted in the order that its conduct was wrong, said in a statement that ‘nothing is more important than our integrity and our ethics.’ The firm also said that ‘sharing answers on any assessment or exam is a violation of our Code of Conduct and is not tolerated’ and said it would take efforts to enforce compliance with ethical rules.”

“Judge Says Privilege Doesn’t Cover Documents Sought in Suit Against Eckert Seamans” —

• “A federal judge upheld an order against Eckert Seamans Cherin & Mellott in a discovery dispute central to a former client’s conflict-of-interest suit against the firm.”
• “The Tuesday decision from U.S. District Judge Jennifer Wilson of the Middle District of Pennsylvania affirmed a magistrate judge’s order directing Eckert Seamans to turn over certain documents to plaintiff Pace-O-Matic Inc. despite the firm’s assertion that the information in question was protected by attorney-client privilege.”
• “Wilson said in a memorandum that Magistrate Judge Joseph Saporito did not abuse his discretion by applying judicial estoppel and was correct in his conclusion that Eckert Seamans adopted inconsistent positions in bad faith.”
• “POM, a gambling device manufacturer, claimed that Eckert Seamans represented the company in a suit over its devices’ legality while simultaneously representing Parx Casino, a competitor that had been arguing in a separate suit that those same devices should be outlawed. POM claimed it was dropped as an Eckert Seamans client when it brought up the alleged conflict of interest.”
• “POM filed suit against Eckert Seamans in February 2020 and sought documents and information from the firm and other parties regarding a Commonwealth Court case involving POM and Parx. The parties objected, asserting attorney-client and work-product privileges, sparking a dispute…”
• “Wilson supported the finding that the firm took two irreconcilable stances, writing, ‘On one hand, Eckert has taken the position that it does not represent any party adverse to POM in litigation, including Parx. On the other hand, Eckert invokes the attorney-client privilege to oppose the production of documents maintained by Eckert involving Parx, a party with interests adverse to POM.'”
• “Wilson said that by presenting conflicting positions, the firm forced the court to make a choice between the two. She ordered that the unredacted documents covered by Saporito’s order be given to the plaintiffs by July 27.”

“Fed. Circ. Refuses To Lift Atty’s USPTO Conflict Suspension” —

• “The Federal Circuit on Friday refused to block an attorney’s suspension from practicing before the U.S. Patent and Trademark Office, rejecting his First Amendment challenge to the finding that he violated conflict of interest laws by representing clients while working for the U.S. Navy.”
• “Correll was suspended after the USPTO learned that he represented clients in patent and trademark matters at the office for 15 years while he was simultaneously employed by the U.S. Department of the Navy. The office found that he violated federal conflict of interest statutes that bar federal employees from representing clients in any matter in which the U.S. is a party or has an interest.”
• “The Federal Circuit was unimpressed with Correll’s claims that the suspension violated his constitutional rights to free speech and free association, concluding that ‘we agree with the district court that the government’s interest in avoiding even the appearance of impropriety outweighs the burden that Mr. Correll’s suspension has on his rights.'”
• “When Correll registered to practice before the USPTO, he signed an oath promising to observe the agency’s rules of practice, which include a prohibition on federal employees representing private clients, the appeal court wrote.”
• “It added that the U.S. Supreme Court has acknowledged that ‘attorneys regularly and voluntarily waive certain free speech rights as part of their duties,’ so even if Correll was correct that his rights were violated, ‘the First Amendment does not excuse him from obligations willingly undertaken, nor does it forbid the PTO’s discipline.'”
• “He filed or prosecuted 211 patent applications and 80 trademark registration applications between 2002 and 2017, when the USPTO’s Office of Enrollment and Discipline received notice of his activities and opened an investigation, the opinion said. According to the opinion, Correll continued to do both jobs despite being reminded by a USPTO survey in 2003 that federal employees may not represent private clients at the agency.”

“H.E.R. Sues Her Record Label and Asks Out of Contract” —

• “Grammy-winning singer H.E.R. is suing her record label MBK Entertainment, claiming that her contract breaks labor code statutes and must be voided.”
• “In her suit filed in Los Angeles last Thursday, H.E.R., whose real name is Gabriella Wilson, claims that MBK Entertainment, the record label of her manager Jeff Robinson, violated California’s business and professions code with her contract, which she signed at age 14.”
• “The suit, first reported by the Blast, alleges that Wilson didn’t have proper independent legal representation following her signing with MBK in 2011. Robinson, founder of the company and former manager to Alicia Keys, became her manager soon after she signed, and he allegedly fired her old law firm before bringing in his own lawyers to negotiate subsequent deals such as her publishing deal.”
• “Such an act could present a potential conflict of interest because Robinson would be representing both the artist and the label, but as the suit states, Wilson never signed a conflict waiver. The suit also alleges the lawyers took 5 percent from the deals they negotiated but that Wilson never agreed to that fee.”
• “Wilson’s lawsuit also claims the contract violates the California labor code’s seven-year statute, and that the deal should be voidable and ceased as of May 18, 2019. ‘Wilson’s seven years have run,’ the suit said. ‘MBK’s attempts to thwart this important and fundamental California public policy should not be condoned.'”
• “That seven-year statute is itself a hot-button item in the music industry. While most workers in California are protected from personal service agreements from lasting more than seven years, there’s an exception specifically for musicians, with record labels entitled to sue for damages if an artist walks from their deal after seven years and still owes the label undelivered albums. The previously introduced FAIR Act seeks to end that exclusion and faces a vote from California’s senate this week.”

“Walgreens appeals to keep counsel DQ fight out of arbitration” —

• “A lawyer for Walgreen Co urged a Washington, D.C., appeals court to revive a key part of an alleged professional misconduct claim that the retail pharmacy giant brought against one of its former law firms now representing its adversary in arbitration.”
• “Walgreens last year sued Crowell & Moring in District of Columbia Superior Court to immediately stop the large law firm from representing insurer Humana Health Plan Inc in an arbitration with Walgreens over drug pricing, contending Crowell, as its former firm, has violated its ethical duty.”
• “The main issue in Thursday’s appeal is whether an arbitration agreement between Walgreens and Humana applies to Walgreens’ ethics dispute with Crowell, which was not a party to the agreement.”
• “The panel judges questioned whether a ruling might open a door to third parties being brought into an arbitration and they also closely examined the broad language of the arbitration agreement itself.”
• “‘There’s a sentence that just says, ‘If there’s a dispute about the scope of this agreement, you and Humana have agreed an arbitrator will decide it,’ Judge Roy McLeese told a lawyer for Walgreens. ‘Do you think that the disputes we’re talking about today are not disputes about the scope of this agreement?'”
• “Walgreens’ counsel Frederick Robinson of Reed Smith told McLeese and Judges Loren AliKhan and Corinne Beckwith that Walgreens ‘never agreed to arbitrate a dispute about the ethics of our former counsel in any forum other than a judicial forum.'”