Bressler Risk Blog

“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.'”

“Calif. Panel Won’t Disqualify Law Firm In Pipe Maker’s Fight” —

• “A California appellate panel upheld on Tuesday a lower court’s refusal to disqualify Pillsbury Winthrop Shaw Pittman LLP from representing Victaulic Co. in its multimillion dollar coverage fight with three AIG units, rejecting arguments that the firm’s attorneys obtained relevant confidential information on AIG while at a previous firm.”
• “In a published opinion, a three-judge appellate panel said the AIG units couldn’t show how lower court Judge Jeffrey S. Brand abused his discretion in finding that Scott Greenspan and Arthur Aizley didn’t have any kind of ‘direct personal relationship’ or ‘substantial relationship’ with AIG’s claims-handling arm while the attorneys worked for Sedgwick LLP.”
• “The panel slammed the insurers’ contention that while at Sedgwick, the two attorneys worked on coverage cases involving AIG that were nearly identical to the types of issues in the Victaulic case, calling it ‘some hyperbole.'”
• “Judge Brand tossed the insurer’s motion, finding that despite Greenspan and Aizley’s work on previous matters involving AIG Claims, the AIG insurers couldn’t show that the attorneys obtained any information that was ‘material to the evaluation, prosecution, settlement or accomplishment of Pillsbury’s current representation of Victaulic in this case.'”
• “The appellate panel agreed, saying there’s no evidence to show that Greenspan or Aizley had any direct relationships with AIG Claims personnel. Greenspan testified that during his time at Sedgwick, it was his supervising partner, Lawrence Klein, who logged most of the face time with AIG Claims, the panel noted. As an associate, Aizley had effectively no interaction with AIG, the panel added.”
• “Also fatal to the insurers’ argument is that while Greenspan and Aizley worked on matters for AIG claims, there’s no evidence to show that the attorneys worked with any of the three AIG insurance units involved in the Victaulic litigation.”
• “The panel further noted that Pillsbury put into place stringent ‘wall-off’ procedures that prevented Greenspan and Aizley from having any involvement in the Victaulic case or even accessing records from it when they joined the firm in November 2020 and February 2021, respectively.”
• “‘Defendants do not even attempt to explain why these screening procedures are insufficient, much less how Judge Brand abused his discretion in finding them sufficient,’ Judge Richman wrote.”

“A Federal Judge Bought Apple And Microsoft Bonds While Overseeing A Case Against Them — Then Dismissed It” —

• “A federal judge who dismissed a child-trafficking and forced labor lawsuit against big technology firms including Apple and Microsoft is arguing that his decision should not be vacated over claims that he had a conflict of interest in the case.”
• “The judge, Carl J. Nichols, a longtime corporate lawyer who was appointed to the United States District Court for the District of Columbia in 2019 by President Donald Trump, had bond holdings in Apple and Microsoft when he was assigned the case at the end of 2019. Then, in 2020, while the case was pending before him, he purchased more bonds in both companies, according to an appeal filed against his decision in last month.”
• “A separate filing that includes Judge Nichols financial disclosure forms shows that in 2020 he purchased bonds in Apple seven times, and Microsoft five times, holdings valued between $60,000 and $200,000.”
• “While Nichols declined to comment for this article, he stated in a recent legal filing in April that he had not violated Section 455 because his holdings in Apple and Microsoft were bonds, not stocks – as initially asserted by the plaintiffs – and therefore did not have to recuse himself from the proceeding.”
• “Pointing to a prior legal opinion, he stated that a bond holding does not ‘convey an ownership interest in the issuer,’ so it does not ‘give rise to a financial interest in the debtor.’ Nichols further added that he no longer holds bonds in either Apple or Microsoft.”
• “Judge Nichols’ actions are of ‘serious concern,’ says Charles Geyh, a professor at Indiana University Maurer School of Law, who studies judicial conduct, ethics and procedure. Not only because of the size of the holdings, Geyh says, but also because Nichols increased his holdings multiple times while the case was before him. ‘This is more than your garden variety situation,’ Geyh says. ‘It is so rare to see judges feathering their nests on purpose…normally you would have a judge recusal.'”

Fascinating interview with with Fred Esposito, COO of Rivkin Radler: “Leveraging process improvement: Changing the way law firms handle client in-take” —

• “I wanted our firm to start our process improvement program by working on one that is critical to the business; those processes include intake, conflicts, timekeeping, billing, on-boarding, and pricing. The client in-take process was selected because it not only touches every part of the firm, it also produces outputs that affect and inform those other processes and strategic decisions.”
• “I believe that client in-take may be one of the most critical areas on which a firm can focus its process improvement efforts, simply because it’s a contact point with almost every part of the client’s interaction within the firm.”
• “As the process improvement operation into client in-take began, I had partners, associates, managers, directors, and administrators — such as those in finance, billing, and IT — selected to work on the project… All of these divergent voices greatly contributed to moving the project forward successfully. For example, we saw a lot of things from the lawyers’ perspective that have been very useful. Using this, my team delved into not only the procedural process of how the firm was conducting client in-take — measuring and analyzing the different steps of the in-take process — but also identified what being missed or overlooked.”
• “For example, a large part of the in-take process is determining whether potential clients have conflicts that should be known to the firm. With the ability to focus on this one specific area, the team was able to find a way to better identify conflicts around adverse parties or relationships between parties, which often get missed in routine conflict checks. They also determined whether there were false conflicts being raised that may have caused needless problems.”
• “When the pandemic hit, we wanted to see what the impact of a virtual law firm would be on these processes. So, we regrouped and revised our project charter and scope. In fact, we actually did the Measure and Analyze phases twice. That was because team members had worked the conflict process to a certain point, then decided to expand the scope to capture these missed and false conflicts. There was enough information that had been gathered to tell us this is something we should be considering.”
• “Overall, the process improvement initiative in client in-take at our firm has been going on for more than two years. And that’s my point, this all takes time — it’s not an overnight thing. It’s not like you’re going to buy a Process Improvement for Dummies book and have your firm changed in three months. It’s not going to work like that — process improvement, done right, takes time.”

“Cisco wins reversal of $2.75 bln damages award because judge’s wife owned stock” —

• “A U.S. appeals court on Thursday threw out a more than $2.75 billion award against Cisco Systems Inc , saying the trial judge should have disqualified himself after learning that his wife owned Cisco stock.”
• “The trial judge, U.S. District Judge Henry Morgan in Norfolk, Virginia, found Cisco liable for patent infringement in October 2020, two months after learning that his wife owned 100 Cisco shares worth $4,688.”
• “Morgan later put the shares in a blind trust, and told the parties that the shares ‘did not and could not have influenced’ his handling of the case.”
• “But the Washington, D.C.-based appeals court said a blind trust was not the same as selling the shares, and it did not matter that San Jose, California-based Cisco had lost.”
• “The court ordered the case reassigned to another judge, because letting Morgan stay on risked undermining public confidence in the judicial process.”
• “Judicial independence attracted renewed attention last year after the Wall Street Journal said 131 federal judges violated federal law by hearing 685 lawsuits since 2010 involving companies where they or their families owned stock.”
• “‘The judiciary takes this matter seriously,’ U.S. Supreme Court Chief Justice John Roberts wrote in his 2021 year-end report. ‘We expect judges to adhere to the highest standards, and those judges violated an ethics rule.'”

“Fox Rothschild Calls Conflict Allegation A ‘Tall Tale‘” —

• “Fox Rothschild lawyers representing aggrieved investors in a professional athlete startup asked a New York federal judge Tuesday to reject a ‘transparent’ attempt to manufacture a conflict and an appearance of impropriety.”
• “Although one of the defendants in the case, GlassBridge Enterprises Inc., is a former Fox client, the firm’s work was focused on pension plan negotiations and had nothing to do with the current litigation, Cypress said. Moreover, that work was completed nearly two years before the current suit was filed. During that period, GlassBridge has also not claimed that the firm had confidential information related to GlassBridge’s investment in a startup known as SportBLX, which is the focus of the current case.”
• “‘Critically, as Fox’s relationship with GlassBridge formally terminated in November 2021 — more than a year after Fox last performed work for GlassBridge — it is undisputed that Fox did not represent GlassBridge in connection with its securities manipulation, tortious interference with contract and unlawful conduct’ that is the subject of Cypress’ claims, the filing states.”
• “New York-based SportBLX had sought to ‘tokenize’ and trade in professional athletes through a blockchain platform that the company would create.”
• “In a May disqualification motion, Glassbridge said it had provided its Fox Rothschild lawyer, Pamela Thein, information about its valuation and assessments of the Sport-BLX investment so that the firm could advocate to include those assets in a proposed settlement agreement. In a second part of the representation, other Fox lawyers also assisted in negotiating lower insurance premiums.”
• “But in mid-2019, GlassBridge received a demand letter from Fox Rothschild claiming that Cypress, another Fox client, ‘intended to sue Sport-BLX, which would have directly affected GlassBridge’s interests in Sport-BLX.’ Fox later assured the company that it would not be involved in the suit, but then ‘disengaged GlassBridge like a hot potato’ and sued anyway, the company said.”
• “‘GlassBridge is being forced to defend itself in a lawsuit brought by its former law firm based on the very confidences that it provided Fox Rothschild during at least two prior representations,’ the company said.”

Hat tip to Nigel Riley, general manager of risk and compliance solutions at Intapp, for sending this interesting one my way: “Game over? Plaintiffs’ lawyers banned from Madison Square Garden by MSG” —

• “The billionaire family that owns majority stakes in the New York Knicks, New York Rangers and the teams’ arena, Madison Square Garden, has never been shy about controlling access to the venues in its empire… But MSG has escalated its access game: It is now using bans from its venues as a litigation tactic.”
• “At least two shareholder firms engaged in litigation over the 2021 merger of Madison Square Garden Entertainment Corp and MSG Networks Inc have received letters from an MSG lawyer advising that they are barred from entering Madison Square Garden, Radio City Music Hall, the Beacon Theatre and other MSG venues until the shareholder suits are resolved.”
• “The justification? Professional conduct rules prohibiting contact between shareholder lawyers and MSG employees, the letter said. (Reuters obtained a copy.)”
• “‘Because of the adversarial nature inherent in litigation proceedings, and because of the potential for contact with the company’s employees and disclosure outside proper litigation discovery channels that could result from the presence of any of your firm’s lawyers at the company’s venues, neither you, nor any other attorney employed at your firm, may enter the company’s venues,’ wrote Hal Weidenfeld, an in-house lawyer for MSG Entertainment, in a June 24 letter to shareholder lawyer Joel Fleming of Block & Leviton.”
• “The suit contends that the Dolan family, which controls all of the various pieces of the MSG empire, forced through a deal that was detrimental to MSG Entertainment shareholders in order to enhance the family’s economic and voting stake in the combined entity.”
• “The company said the new policy may be ‘disappointing’ to some of the now-banned plaintiffs’ lawyers, but that’s simply an unfortunate consequence of ‘our need to protect against improper disclosure and discovery.’ The lawyers will be welcomed back, the statement said, when their cases against MSG entities are resolved.”
• “‘We’re a firm full of Celtics fans,’ Fleming said. ‘If we want to watch the Knicks lose, it’s a lot more fun to see it happen at TD Garden.'”

Curious, I had a look to see what other events the MSG ban blocks these lawyers from attending. Alas, they will be restricted from upcoming acts including: Billy Joel, Michael Buble, and Rage Against the Machine…

(Could one argue that it would be professionally prudent for these lawyers to keep their distances even after litigation is concluded? They may want to avoid even the appearance of impropriety… whispers that it was the lure of the upcoming Hanson concert, Tom Jones, or Doobie Brothers 50th Anniversary Tour that brought them to the negotiating table? I’ll let the ethics experts ponder that one…)

“Firm splits with lawyers who won gun rights case at Supreme Court” —

• “Two of the lawyers responsible for a major victory for gun rights forces at the Supreme Court on Thursday are parting with their prominent law firm after it announced it would no longer handle Second Amendment litigation.”
• “Former Solicitor General Paul Clement and Erin Murphy, a regular Supreme Court litigator, said they were launching their own firm after Chicago-based Kirkland & Ellis decided to step back from gun-related litigation.”
• “Through a firm spokesperson, Kirkland confirmed its decision but did not explain its rationale for dropping gun cases. A key attorney at Kirkland, Jon Ballis, said he hoped the firm could continue to work with Clement and Murphy on matters not related to guns.”
• “Clement’s departure from Kirkland & Ellis echoes a similar episode about a decade ago when he left Atlanta-based King & Spalding after that firm moved to distance itself from Clement’s work to preserve the Defense of Marriage Act, a federal law banning benefits for same-sex couples.”

Not a law firm, but still and interesting conflicts story: “SEC charges Egan-Jones and CEO with conflict of interest breaches” —

• “The Securities and Exchange Commission on Tuesday has charged credit ratings firm Egan-Jones as well as its CEO, Sean Egan, with violating conflict of interest provisions, according to a release.”
• “The Pennsylvania-based company, without admitting or denying the SEC’s findings, will settle the charges with a penalty of $1.7M and over $146K in disgorgement and interest, the securities agency said.”
• “The SEC’s findings concluded that Egan ‘was influenced by sales and marketing considerations while participating in determining a credit rating for that client, which created a prohibited conflict of interest.'”
• “Also, Egan-Jones didn’t ‘establish, maintain, and enforce policies and procedures reasonably designed to manage such conflicts of interest,’ the SEC said.”

More from the SEC order:

• “On July 11, 2019, Client A engaged EJR to issue a rating for a real estate transaction. Although EJR’s typical turnaround time for that type of rating was approximately five days, on July 23, EJR discovered that the client relationship manager for Client A had failed to submit the ratings request to the ratings group.”
• “On July 31, Client A emailed EJR’s client relationship manager to ask about the status of the rating and the reason for the delay. In those emails to EJR, Client A complained that the delay was “beyond ridiculous” and demanded that the rating be issued that day by 5:00 p.m. Client A also threatened to cancel the pending rating request and stop doing business with EJR.”
• “Egan — who at the time was EJR’s president and the head of EJR’s ratings group — spoke to the client relationship manager and stated that Client A was an important client for EJR and that he was concerned that EJR could lose Client A’s business.”
• “Later on July 31, Egan called Client A and promised that EJR would provide the requested rating later that day. Egan also told Client A that the client relationship manager was being replaced.”
• “At around 4:30 p.m. on July 31, a half hour before Client A’s deadline, EJR convened an RRC by telephone to vote on a proposed rating for Client A. Egan and a senior EJR analyst (“Analyst 1”) were the voting members of the committee, with Analyst 1 serving as the chairperson. The presenting analyst on the committee (the “Presenting Analyst”) recommended a rating of BBB+ for the transaction. However, during the RRC meeting, Analyst 1 requested certain information about the transaction that she believed was essential for determining an accurate rating. Because EJR did not have the information that she sought, Analyst 1 abstained from voting on the proposed rating. Without a majority of voting members in support, the proposed rating was not approved by the RRC.”
• “At approximately 5:13 p.m., Client A sent Egan an email stating: ‘We are passed [sic] 5pm. Where is the rating?'”
• “At approximately 5:17 p.m., Egan became the chairperson of the RRC. Analyst 1 was replaced with another EJR analyst (“Analyst 2”) as the second voting member.”
• “At 5:21 p.m., Egan and Analyst 2 voted to approve the proposed BBB+ rating, which EJR then issued”
• “Client A, however, was displeased with the BBB+ rating, and emailed the Presenting Analyst asking why the rating only was BBB+ and noted that EJR had recently rated another, similar transaction for Client A two notches higher. When the Presenting Analyst attempted to explain the reason for the BBB+ rating, Client A replied, ‘Surely you jest. I recommend you go back and verify your models. You must have missed something.’ Client A then forwarded those emails to Egan and asked Egan to call to discuss the rating.”
• “On August 6 and August 7, 2019, Client A emailed Egan asking him whether there was any ‘update’ on the rating.”
• “Around this time, Egan, in his capacity as a member of the prior RRC that had approved the BBB+ rating on July 31, directed the Presenting Analyst to develop a new rating tool in light of Client A’s concerns about the BBB+ rating. On August 12, EJR convened another RRC, with Egan as a voting member and an analyst who had not participated in either of the two prior RRCs as the RRC chair and second voting member (“Analyst 3”). Neither Analyst 1 nor Analyst 2 was invited to serve on this new RRC.”
• “The Presenting Analyst again proposed a rating of BBB+. Notwithstanding the Presenting Analyst’s recommendation, and although EJR had received no substantive information from Client A to support a higher rating, Egan and Analyst 3, relying on the new rating tool referenced above, voted to increase the rating one notch to A-.”

“Dunkin’ wants lawyers disqualified from lawsuit over ‘plant-based’ sausage” —

• “Dunkin’ Brands Inc told a Florida federal court Wednesday that law firm Troutman Pepper Hamilton Sanders should not be allowed to represent a Philadelphia company suing it for trademark infringement because the firm represents another Dunkin’ unit in a different case.”
• “Troutman’s defense of Dunkin’ Donuts Franchising LLC in a New Jersey sexual harassment and discrimination lawsuit should disqualify it from representing Vegadelphia Foods in its lawsuit over Dunkin’ and Beyond Meat’s “Great Taste, Plant-Based” slogan, the company said.”
• “Vegadelphia, which sells plant-based beef and chicken, said in its April lawsuit that Dunkin’ and Beyond Meat’s slogan for their Beyond Sausage Sandwich is likely to cause confusion with its trademarked slogan, ‘Where Great Taste is Plant-Based.'”
• “Dunkin’ said in its Wednesday filing that ‘for all practical purposes, Troutman has sued a current client.’ It said Troutman was hired to represent Dunkin’ Franchising in January.”
• “The filing said Dunkin’ Franchising is a shell company used solely to contract with Dunkin’ franchise owners. Any ruling against Dunkin’ Brands would also hurt Troutman’s client in the New Jersey case, the company said.”

“Nelson Mullins Atty’s Work Was ‘Conflict Ridden,’ Jury Hears” —

• “A legal ethics expert testified Thursday that a Nelson Mullins lawyer’s work for a wealthy Florida family was rife with conflicts of interest, and a waiver letter he asked them to sign was an ethical minefield.”
• “Charles Wolfram, a law professor emeritus at Cornell University, took the stand in a lawsuit claiming that Nelson Mullins Riley & Scarborough LLP lawyer Carl Rosen mishandled trust work for Dr. Steven Scott and his wife, former nurse Rebecca Scott, allowing their eldest son, Rob Scott, to reap $46 million from a trust against their wishes.”
• “Wolfram told the jury that Rosen’s work for eight members of the same family — there were four other children besides Rob, plus a mother-in-law — was a ‘classical conflict of interest.'”
• “At a May 2012 meeting in his office, Rosen presented the family members with a consent waiver, which they all signed. In Wolfram’s view, however, the letter was riddled with ethical problems.”
• “For example, it was an attempt to waive both past and future issues, which Wolfram called ‘an impossible request.’ Rosen has testified it was only for past issues.”
• “Elsewhere, the letter explains that for each signatory, Rosen will not disclose confidential information from that person to other family members, even if the information is adverse to another family member.”
• “Wolfram described this as ‘a very controversial method of representing clients that some members of the estate planning community embrace, but many think [is] very, very difficult to maintain.'”
• “‘You could very easily get into a conflict situation and not be able to deal with it,’ he said.”

“Appeals Court Says ‘Gentleman’s Agreement’ Between Law Firm and Client Does Not Outweigh Contract” —

• “The New Jersey Appellate Division has rejected Basil Law Group’s claim that it is due $400,000 in fees and additional work promised in a ‘gentleman’s agreement’ with Noah Bank, after the bank’s CEO stepped down amid criminal charges.”
• “Shin asked Basil to reduce the fixed fee balance of $550,000 in exchange for a $250,000 fee, an oral promise the firm would remain primary counsel for all litigation matters, and a promise the board would pay the firm to perform in an advisory capacity. The agreement was only verbal, which Basil claimed in a deposition was at Shin’s request. Basil stated that Shin said that he would pay off the additional $400,000 but could not put it in writing, according to the opinion.”
• “In what Shin called ‘a gentleman’s agreement’ during his deposition, Noah would not have to pay the full agreement price of $650,000 in exchange for providing additional legal work, the opinion said. He also admitted to stating that he would pay the $400,000 if ‘he were able to do so’ or if there was ‘a merger transaction in which everybody hit the lottery.'”
• “Noah’s chairman of the board, Edwin Lloyd, asked Basil to conduct an internal investigation into the criminal allegations to protect Noah’s interests. However, James learned that Basil was also assisting Shin with his criminal defense. Basil requested and received a waiver of conflict from James to proceed with Shin’s representation, according to the opinion.”
• “After consulting with outside counsel, James recommended Noah terminate Basil’s services for the company citing a conflict of interest. Basil was terminated from all pending litigation and future work. In a discussion with the board, all were in agreement that a conflict existed. However, Lloyd testified that Noah terminated Basil because of cost and because the services were no longer needed, the opinion said.”
• “In August 2019, Basil attempted to collect the additional $400,000 in fees and asserted that Noah’s reason for terminating the firm was strategic and demanded payment within 30 days. The bill went unpaid and Basil brought this action in Bergen County Superior Court. The trial court found ‘no ambiguity’ in the 2019 contract and therefore concluded that there was no breach of contract, according to the appeals court’s opinion.”
• “On the final claim regarding termination of Basil’s services by Noah, the trial court found nothing that indicated ‘malice or ill motive.’ James received advice from counsel that indicated a conflict existed and the board no longer felt satisfied with Basil’s services once he represented Shin in the criminal matter.”
• “‘Basil conceded defendant could terminate plaintiff under the oral agreement if defendant became dissatisfied with plaintiff’s representation,’ the appeals court said. ‘Therefore, defendant did not breach the implied covenant in terminating plaintiff’s services. We see no reason to disturb the court’s order finding no breach of the covenant of good faith and fair dealing.'”

“Atty DQ Bid Takes Back Seat In Restaurant Ownership Fight” —

• “A Georgia state judge said the issue of ownership must be decided before he could determine whether an attorney can represent both a business and its CEO in a dispute over the corporate ownership of a metro Atlanta sushi restaurant and possible breaches of fiduciary duties.”
• “Ryan Isenberg of Isenberg & Hewitt PC, who represents Yijae and Lee, contended that Moore couldn’t represent both defendant Dongin Kim and EJ & Don as a necessary nominal party in the suit because a corporation’s attorney can’t represent an individual shareholder in a case in which his interests are adverse to those of other shareholders.”
• “Moore contended that he should be able to represent both the company and Kim at least until the issue of ownership is decided.”
• “‘I think this motion puts the cart before the horse,’ Moore said. ‘I think we have to first determine who is a shareholder. That’s a fundamental merit-based argument. We don’t believe that Lee or Yijae are shareholders based on the evidence. That’s a merit-based argument, and if it’s true, they have no standing to contest whether I can represent the organization and its CEO.'”
• “Judge Davis agreed with Moore, saying the dispute at the heart of the case is whether Yijae and Lee are shareholders in the company at all and that issue must be decided before he could determine whether Moore can represent both Kim as CEO and EJ & Don.”
• “Yijae and Lee first filed suit against Kim in January after they said he claimed they were merely lenders, not shareholders, in EJ & Don and asked them to refrain from coming on the premises of the restaurant. They sought a declaratory judgment that they are actually the controlling shareholders of the company and that they are entitled to a preliminary and permanent injunction barring Kim from exercising control over it.”