Bressler Risk Blog

“JetBlue Winds Down Relationship With New CEO’s Former Law Firm” —

• “The longstanding association between Holland & Knight and JetBlue Airways Corp. is tapering down as Joanna Geraghty, who is married to the law firm’s current head of litigation, takes over as the airline’s new chief executive officer.”
• “JetBlue, which recently paid a $69 million termination fee to Spirit Airlines Inc. after a federal judge scuttled its $3.8 billion bid for the budget carrier, remains a client of Holland & Knight, but the latter is getting closer to being left at the gate.”
• “A source at Holland & Knight verified that the work the firm has done for JetBlue has been ‘declining year-over-year’ for at least 10 years, so much so that it no longer merits a standard potential conflict of interest disclosure. A spokesman for the airline confirmed it remains a Holland & Knight client. Both parties claim they have crafted protocols to avoid conflicts.”
• “Publicly traded companies in the US must detail certain ‘related party’ transactions, such as if a vendor or business partner is related to a company’s board member or a senior executive, according to securities rules. Companies and their boards also enjoy some latitude in what they consider ‘material’ information that must be disclosed to shareholders.”
• “JetBlue first began disclosing what it paid Holland & Knight in fiscal 2018, the first year in which Geraghty was listed as one of its six highest-paid executives. JetBlue’s most recent proxy statement filed March 22 did not include what Holland & Knight received from it in legal fees during fiscal 2023.”
• “From 2018 to 2022, Holland & Knight’s JetBlue work ranged from between .0025% to .18% of its annual revenue, billables that roughly add up to several million dollars. Holland & Knight’s gross revenue broke the $1 billion mark in 2020 and last year neared $2 billion, per reporting by The American Lawyer.”
• “In its 2022 proxy, JetBlue stated that Geraghty—then its president and chief operating officer—is married to a Holland & Knight partner. Multiple lawyers at Holland & Knight, including Geraghty’s husband, litigation section leader Christopher Kelly, have performed ‘various legal services for many years,’ JetBlue said. The New York-based company said its relationship with Holland & Knight predated Geraghty coming aboard in 2005.”
• “JetBlue said in its 2022 proxy that ‘Geraghty’s spouse did not have a material interest’ in Holland & Knight’s relationship with JetBlue as ‘he was no longer involved in providing or supervising services’ that the firm did for the airline.”
• “Kelly also didn’t receive direct compensation from fees paid by JetBlue to Holland & Knight in recent years, according to disclosures by the airline.”
• “Holland & Knight had a role on more than 20% of cases involving JetBlue in US federal courts since 2007, according to Bloomberg Law data. Kelly and others represented the company in disputes with passengers and labor-related affairs. Within the last decade, however, Holland & Knight’s work for JetBlue has tapered off as Geraghty’s duties expanded. Bloomberg Law records show that the firm’s handled only two federal court cases for JetBlue in the past five years.”

“MA Ethics Opinion 2024-1: Nonprofit organization + Estate planning” —

• “When a Client asks a Lawyer to draft an estate plan that includes a testamentary gift to a non-profit organization for which the Lawyer serves as an officer or board member, the Lawyer’s relationship with the non-profit creates a conflict of interest necessitating the Client’s informed consent, confirmed in writing, before the Lawyer may proceed. In obtaining the Client’s informed consent, the Lawyer should advise the Client of the enhanced risk that an undue influence claim based on the Lawyer’s relationship with the non-profit may be asserted.”
  ““An estate planning Lawyer is the President of a small non-profit social service agency with limited financial means. The non-profit is not a client of the Lawyer or of the Lawyer’s firm. One of the Lawyer’s clients asked the Lawyer to draft an estate planning document that includes a substantial testamentary gift to the non-profit.”
  “The Lawyer’s role as President of a non-profit organization creates a conflict of interest when working with a Client who wishes to make or alter testamentary gifts to the non-profit. As President, the Lawyer has a personal interest in the non-profit’s success, which is at least partially dependent on charitable gifts to the non-profit. Since the non-profit has limited means and the proposed gift is substantial, there is a significant risk that the Lawyer’s personal interest will influence the Lawyer’s advice regarding the Client’s estate plan.”
  “In this case, the Lawyer has an attorney-client relationship with the Client who intends to make a gift, but not with the non-profit. Accordingly, before going forward with drafting the estate planning document, the Lawyer should fully inform the Client of the potential conflict of interest and obtain the Client’s informed consent confirmed in writing as required by Rule 1.7(b)(4).”
  “Even though the Committee believes that the conflict is consentable, the Lawyer should proceed cautiously. The preparation of an instrument benefitting the non-profit by one of its officers or board members could create the appearance of undue influence, which is one of the grounds on which a will may be contested by a decedent’s heirs or the devisees under a prior will.”
  “Accordingly, in seeking the Client’s informed consent, the Lawyer should point out to the Client that the Client’s testamentary wishes would be less susceptible to a challenge if the Client’s will were prepared by an independent lawyer.”

“NCAA removes game official at halftime because of background conflict” —

• “The NCAA changed one of the officials at the half of the Chattanooga-N.C. State game Saturday because of a background conflict.”
• “‘There was a switch of game officials at halftime of the Chattanooga-N.C. State first-round game because it was learned after the game had started that Umpire 2 Tommi Paris had a background conflict that, if known, would prevent her from working that assigned game,’ the NCAA said in a statement after an inquiry from The Associated Press.”
• “An online profile for Paris says that she received a master’s degree from Chattanooga. The NCAA asks all officials who are being considered for the NCAA Tournament to disclose school affiliations to avoid potential conflicts. In this case, it wasn’t disclosed.”

“Supreme Court to Review Standard for Showing ‘Evident Partiality’ by Arbitrators” —

• “Conflicts of interest are of great interest to law firms, prosecutors and arbitrators. In two major international arbitrations, parties are seeking review by the U.S. Supreme Court of the standard that courts should apply when considering whether to vacate an arbitration award based on an alleged conflict of interest. The cases are important not only because of the large size of the awards at issue, but also because arbitration is the preferred method by which the world’s commercial disputes are being resolved.”
• “U.S. courts are divided on how they should apply the “evident partiality” standard contained in the Federal Arbitration Act, which must be demonstrated in order to vacate an arbitration award based on an arbitrator’s alleged conflict of interest. Five circuit courts follow the U.S. Court of Appeals for the Second Circuit standard requiring an award to be vacated only if a court would have to conclude an arbitrator was partial. The Ninth Circuit requires only a reasonable impression of possible bias and the Eleventh Circuit articulates the Second Circuit standard, but applies the Ninth Circuit standard. The litigants petitioning for certiorari arise in different procedural postures, but both cases request clarification of the standard.”
• “In Occidental Exploration and Production Company (OEPC) v. Andes Petroleum Ecuador Limited (Andes), US Supreme Ct No. 23-506, OEPC filed a similar petition for certiorari in connection with an arbitration in which Andes was awarded more than $550 million award. Like Grupo in the Panama Canal case, OEPC contends that the lower courts applied the wrong standard in reviewing OEPC’s claim of arbitrator conflicts of interest. In opposition, Andes argued that OEPC would have lost under any standard. Andes further notes that the Supreme Court has previously denied petitions for certiorari presenting the same general question at least fifteen times in the last 25 years.”
• “The U.S. District Court for the Southern District of New York denied OEPC’s motion to vacate the arbitration award and the Second Circuit affirmed. The Second Circuit ruled that, “Unlike a judge, who can be disqualified in any proceeding in which his impartiality might reasonably be questioned, an arbitrator is disqualified only when a reasonable person, considering all the circumstances, would have to conclude that an arbitrator was partial to one side.” The circuit court also noted that it had ruled, in an earlier case, that it did not think that “the fact that two arbitrators served together in one arbitration at the same time that they served together in another is, without more, evidence that they were predisposed to favor one party over another in either arbitration.””
• “In its petition for certiorari, OEPC argued that the Second Circuit applied too strict a standard in assessing the arbitrator’s alleged conflict of interest. It argued that the standard should not be whether a reasonable person “would have to conclude” the arbitrator was actually biased, but rather whether the arbitrator “might reasonably be thought to be biased.” In response, Andes argued that “whatever differences may exist in terminology are academic,” as OEPC would have lost under any standard.”

“The State Bar seeks public comment on Proposed Formal Opinion Interim No. 21-0003 (Ethics of In-House Counsel).” —

• “Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly and can also be used to upload your comment letter and/or other attachments.”
• “Proposed Formal Opinion Interim No. 21-0003 considers:
  • Is there a conflict of interest when an in-house lawyer moves from one company to another?
  • Does a stock option agreement present a lawyer with any conflicts of interest and, if so, how and when should such conflicts of interest be addressed with the employer?”
• “The opinion digest states: It is common for in-house lawyers to move from one company to another, often within the same industry. And, although conflicts rules apply equally to in-house lawyers as to law firm lawyers, the conflicts analysis must take into account the unique characteristics of the in-house role, which is typically both an attorney-client and employer-employee relationship.”
• “A former client conflict of interest under Rule of Professional Conduct 1.9 does not arise simply because an in-house lawyer moves between companies that are economic competitors. A conflict of interest will arise if the lawyer was personally involved in representing their former employer on a matter that is factually and legally identical or similar to a matter the lawyer is to handle for their new employer, and in which the companies are materially adverse.”
• “Alternatively, a conflict of interest will arise if the lawyer was not personally involved in the representation, but they obtained confidential information during their prior employment concerning the same or substantially similar, adverse matter. The conflict may be imputed to the entire legal department of the new employer unless screening measures may be implemented under rule 1.10.”
• See also the detailed analysis presented in the PDF: “PROPOSED FORMAL OPINION INTERIM NO. 21-0003“

“SRA can’t tell us whom to represent, says regulatory specialist” —

• “The Solicitors Regulation Authority should be wary of dictating to firms how they conduct litigation and which clients they choose to take on, a leading regulatory lawyer has said.”
• “Iain Miller, partner with London firm Kingsley Napley, said there was a danger in the SRA referring to a solicitor’s duty as being to ‘uphold the public interest’ when this was such a broad and unqualified term.”
• “Speaking at the Law Society’s risk and compliance conference today, Miller said the public interest served by lawyers is different to that of healthcare workers or other professionals.”
• “‘We all support society but in different ways,’ he said. ‘Once this is understood it becomes much easier to understand what we can and cannot do for our clients. For example, it would be wrong to draft a non-disclosure agreement that inhibited the work of the courts or regulators. It would also be wrong to use our skills as lawyers to advance an unmeritorious claim in correspondence in order to achieve what no court would ever order.”
• “‘However, these issues are very fact dependant,’ he said. ‘This is particularly because we operate in a common law adversarial system. We are entitled to advance claims on behalf of our clients which are arguable, but think they may not succeed.’”
• “The SRA has come under pressure from lobby groups and academics to do more to address certain types of abusive litigation, particularly those dubbed strategic lawsuits against public participation (SLAPPs).”
• “Paul Philip, SRA chief executive, has said that solicitors must act with integrity and not abuse the litigation process, but equally they should ‘act fearlessly in their client’s interest when bringing legitimate claims.’”
• “Miller told the conference that all members of society were entitled to legal advice ‘in any circumstances’, no matter what societal reservations there may be about, for example, a client’s environmental impact.”

“‘I Was Kind of Dumbfounded’: J&J Lawyers Testify in Talc Disqualification Hearing” —

• “A senior in-house attorney for Johnson & Johnson told a pair of judges on Monday that an alliance between a former member of his legal team and talc plaintiffs’ attorney Andy Birchfield was the ‘most egregious breach of ethical obligations I have ever heard of, ever seen.'”
• “At an evidentiary hearing, Erik Haas, Johnson & Johnson’s worldwide vice president of litigation, told Steve Brody, a partner at O’Melveny & Myers in Washington, D.C., that he was shocked when his former outside counsel, John Conlan, teamed up with Birchfield, of Montgomery, Alabama’s Beasley Allen, to propose settling the talc litigation for $19 billion.”
• “‘We were utterly shocked and appalled that our former counsel was conferring with our adversary,’ Haas said, ‘by proposing an alternative transaction based upon the same matter and same issues he had represented us extensively for 21 months.'”
• “But he and an outside lawyer for Johnson & Johnson, Jim Murdica, of Barnes & Thornburg in Los Angeles, had more recent revelations: they had no idea Conlan began working with Birchfield as early as April 2023, about six months before they originally learned about the alliance, until plaintiffs’ lawyers submitted a privilege log a few weeks ago in the multidistrict litigation describing confidential communications between them.”
• “‘I was kind of dumbfounded—and I was in close contact with the mediators’” Murdica testified on Monday. ‘I was extremely concerned. In my career, I’ve never seen anything like that.'”
• “Jeffrey Pollock, a partner at Fox Rothschild in Princeton, New Jersey, who represents Birchfield, objected to testimony about the communications in the privilege logs, calling it ‘rank speculation.'”
• “The hearing, before Atlantic County Superior Court Judge John Porto and U.S. Magistrate Judge Rukhsanah Singh, both in New Jersey, comes after Johnson & Johnson filed motions to disqualify Birchfield and his firm from leadership of the talc litigation. Beasley Allen principal Leigh O’Dell is co-lead plaintiffs’ counsel in the talc MDL.”
• “The disqualification motions allege Birchfield partnered with Conlan, who was a partner at Faegre Drinker Biddle & Reath until 2022, to push a talc settlement that was more than double the amount Johnson & Johnson offered as part of the second bankruptcy of its subsidiary, LTL Management.”
• “Birchfield’s lawyer, Pollock, has called the allegations ‘smear tactics’ and an unprofessional ‘locker-room brawl.'”
• “Monday’s hearing continued to be contentious, with objections back and forth. ‘Listen to my question for once,’ Pollock told Haas on cross-examination. ‘The process is not the Erik Haas show.'”
• “Both Porto, the judge in the talc multicounty litigation in New Jersey state courts, and Singh, who is overseeing the talc multidistrict litigation in the U.S. District Court of New Jersey, found that more evidence was needed.”
• “Haas, on direct examination, said he was ‘intimately familiar’ with Conlan’s work on the Johnson & Johnson talc litigation, calling him a ‘central figure in strategic decision making in connection with this team.'”
• “‘We would have weekly calls where we were collectively litigating and adjudicating the talc litigation,’ he said. ‘From the very first conversation I had and throughout the entire time Mr. Conlan was representing Johnson & Johnson, we had repeated discussions—many, many discussions—over whether and to what extent the cases should be resolved in bankruptcy or completely outside bankruptcy.'”
• “He said Conlan, who now runs Legacy Liability Solutions, approached him about a proposal to resolve the talc litigation, but he didn’t know at the time Birchfield was working with him. The idea was for Legacy to administer funds to settle talc claims, absorbing LTL and other entities with talc liabilities. Johnson & Johnson turned him down, citing its auditor’s concerns.”
• “Conlan’s Oct. 18 letter was the first time he revealed working with Birchfield—that is, until the privilege logs came up a few weeks ago showing a longer relationship between the two of them.”
• “‘We now know it’s even more egregious, because it wasn’t the first time,’ Haas said.”
• “Pollock attempted to downplay the accusations that his client was pushing for a settlement with a dollar figure that would provide more legal fees for him. He brought up two experts for Johnson & Johnson in its bankruptcy that estimated the cost to resolve the talc litigation would be $11 billion to $21 billion. He also questioned whether Conlan had breached any ethics.”
• “‘You accused him of being a side-switching lawyer,’ Pollock told Haas. ‘How can he be a side-switching lawyer if he’s not representing a client in the matter other than himself?’ Haas explained that Conlan is working with Johnson & Johnson’s adversary on the same matters ‘That is a side-switching lawyer,’ he said. Porto previously ordered that both Conlan and Birchfield must testify at the hearing. On Monday afternoon, he said he would schedule another day of the hearing at a later date.”

Mark Hinderks, Stinson LLP’s legal ethics and professional responsibility practice writes: “Is It a Conflict of Interest to Be Adverse to a Former Firm Client Who Has Left With a Departing Lawyer?” —

• “Question: I am a lawyer with a midsized firm. With the mobility of lawyers moving laterally in recent years, it is not uncommon for a lawyer to join us as a new partner with their own set of clients whose matters they bring with them to the firm. Regrettably, we also sometimes lose partners to other firms, who then depart with some or all of the clients with whom they have built relationships. This type of movement seems to be a part of the modern practice of law but creates sometimes confusing conflict of interest issues.”
• “Recently, one of our partners left the firm to join another firm. We were able to amicably and jointly communicate to clients for which she was responsible about her departure, some of which chose to stay with our firm and some of which determined to transfer their files and matters to the exiting partner’s new firm. X Company, a client that the partner had earlier brought to the firm chose to move all their matters with her to her new firm. She took all of the client files (paper and electronic), and also took with her the only associate who had worked on any of X Company’s matters. “
• “Now, a couple of months later, a dispute has erupted between one of my clients and X Company, and they want me to represent them in a suit against X Company. I am concerned that the company was also a client of our firm only about 60 days ago. Does this create a conflict issue for us either under the former client Rule 1.9, or the imputation of conflicts Rule 1.10?”
• “Answer: These facts present an interesting twist on the Model Rules’ protection of the interests of ‘former clients.’ Rule 1.9 duties to former clients seek to prevent a lawyer from using confidential information gained in a previous representation from being used to the former client’s disadvantage when representing a different client, and to prevent a changing of sides. The rule accomplishes this by limiting adversity in the ‘same or substantially related’ matters. See Rule 1.9, Comments 1-2.”
• “In your situation, however, these interests are not implicated because your firm no longer has in its possession any confidential information relating to the matters of the former client X Company; there is no lawyer remaining at the firm who was exposed to X Company’s confidential information, and there is no lawyer remaining at the firm who would be ‘switching sides’ if you or another lawyer at the firm were to now be adverse to X Company.”
• “This situation is expressly accounted for in Rule 1.10(b), which provides that when a lawyer has terminated their association with a firm, the firm is not thereafter prohibited from being adverse to a client represented by that formerly associated lawyer, and not currently represented by the firm, unless it is the same matter or substantially related to that in which the formerly associated lawyer represented the client while at the firm; or any lawyer remaining in the firm has confidential information protected by Rules 1.6 and 1.9(c) that is material to the matter, in any form, paper, electronic or in their head.”
• “Here, all the records are gone, and the only lawyers who had knowledge of the former client’s confidential information in their heads are also gone. Therefore, provided the new matter is not the same or substantially related to a matter for X Company while the partner who left represented them at your firm, neither you nor your firm have a conflict of interest that precludes current adversity. Good luck with the new matter.”

“Law firm conflicts ‘permeated FTX’s bankruptcy’, professors allege” —

• “Two law professors have claimed that Sullivan & Cromwell put its own interests before that of FTX’s stakeholders, reviving criticism over the law firm’s role in the bankrupt cryptocurrency exchange’s rise, collapse and unwinding.”
• “The firm’s ‘apparent conflicts of interest permeated FTX’s bankruptcy filing and every aspect of the case,’ Jonathan Lipson of Temple University and David Skeel of the University of Pennsylvania wrote in a paper published online earlier this month.”
• “The two academics focused on the 20 M&A and regulatory assignments that S&C worked on for FTX, for which it earned just under $10mn in the months leading up to the exchange’s November 2022 bankruptcy filing. “
• “Through that work, ‘S&C knew, or was in a position to know, that FTX was co-mingling customer assets,’ the professors contended, referring to FTX founder Sam Bankman-Fried’s misuse of account holder funds. “
• “John Ray, the chief executive appointed to oversee FTX, said in a statement on behalf of the company and its advisers: ‘The paper is simply not research but uninformed and unsupported allegations’ that ‘grossly mischaracterises the facts.'”
• “The office of the US Trustee, a part of the Department of Justice that represents the public interest in bankruptcy cases, initially objected to S&C’s retention, arguing that the law firm had failed to properly disclose the full extent of its connections to FTX. Several US senators also voiced concern.
• “But the trustee eventually lifted its objection after the law firm provided more details of its previous work, and the court approved S&C’s hiring. According to court filings, S&C has reaped $184mn in fees, including billings and reimbursements, between November 2022 and January 2024.”
• “The professors further contended that ‘S&C may have violated ethical duties of confidentiality, candour, and loyalty by reporting allegations of these crimes to prosecutors . . . by duping Bankman-Fried into giving control of FTX to Ray.'”
• “‘For well over a year, S&C and Ray had free rein to marshal and manage conflicting claims about the public and private interests at stake as they saw fit,’” the professors wrote. ‘These conflicts appear to have reduced recoveries, even as they have enriched S&C.'”
• “People close to S&C and FTX noted that all the company’s actions had to be approved by the bankruptcy court with the consent of the US Trustee and creditors, and pointed out that Bankman-Fried had several lawyers personally representing him in November 2022. Moreover, they said account holders could potentially receive the full amount of their claims by the time the bankruptcy was finished.”
• “Lipson and Skeel said they ran into each other last autumn during oral arguments before an appeals court over the examiner’s appointment. They decided afterwards to collaborate on the article about the duties of lawyers, which is to be published in the Stanford Law Review.”
• “They said there was a ‘firewall’ in place so Bankman-Fried’s parents, who are Stanford law professors, had no knowledge of the article prior to submission. Skeel said he had no interaction with the Bankman-Frieds and handled all interactions with the Stanford publication. The pair did not call S&C or FTX prior to publication but said they welcomed any feedback. “

“In public, Suarez says he’s not Ken Griffin’s attorney. Under oath, he said differently” —

• “Miami Mayor Francis Suarez has long said that he has no conflict of interest when it comes to his public support for billionaire hedge funder Ken Griffin, a major client of the law firm where Suarez is employed.”
• “But in an interview conducted under oath in December, Suarez contradicted previous public statements and said he is one of Griffin’s attorneys — a potential violation of ethics laws prohibiting elected officials from working for anyone who has business before their government.”
• “In his sworn statement to a state ethics investigator, Suarez said Griffin was not just a client of the law firm where he works, but his own personal client. The mayor made that point as part of a successful effort to get the Florida Commission on Ethics to dismiss an unrelated complaint against him.”
• “But in calling Griffin “my client,” Suarez also raised a possible conflict of interest under Florida law, given that Griffin is lobbying the city for various permissions as he moves his personal residence and company headquarters to South Florida.”
• “While Florida laws governing outside employment would not prevent the mayor from working for a firm whose clients have official business with the city of Miami, the law prohibits Suarez from doing legal work for those clients, according to a formal ethics opinion issued to Suarez in 2021.”
• “And Suarez would be in violation of state ethics laws, the letter warned, if ‘any client for whom he is performing legal services is conducting business with [not just the City Commission, but] any subordinate city board or staff.’ The restriction would apply, the ethics officials wrote, regardless of whether Suarez recused himself from any related city matters.”
• “The mayor’s office is now walking back Suarez’s sworn statement. In response to the Herald’s latest questions, the mayor’s director of communications, Stephanie Severino, said Griffin ‘is not and has never been a personal client of Mayor Suarez.’ Nor, she said, is Suarez on Griffin’s account at the law firm where Suarez works.”
• “When the Herald asked Florida Commission on Ethics spokesperson Lynn Blais about Suarez’s comment and whether it presented a conflict of interest for him if Griffin were in fact his direct client, she wrote by email: ‘We cannot give an opinion about a person’s conduct… a public officer or public employee who is in doubt about the applicability of the standards conduct to himself or herself may seek an advisory opinion from the Commission'”

“Whitestone Law Disqualified from Dual Representation in Netflix Patent Infringement Battle” —

• “In an unfolding patent infringement dispute against Netflix, California federal judge has ruled that Whitestone Law is unable to simultaneously represent both the plaintiff, a Finnish inventor, and the nonparty that footed part of the inventor’s legal bills. The decision was made on the basis that interests of the two parties have diverged following certain allegations made by Netflix against them both.”
• “This ruling was a result of the determination that the potentially conflicting interests between the inventor and the financial backer could not be justifiably represented by a single law firm. While the precise nature of Netflix’s accusations remains undisclosed, the ruling underscores the crucial role of legal ethics in managing client representation particularly in patent infringement cases.”

“ORDER GRANTING PLAINTIFF’S MOTION TO DISQUALIFY WHITESTONE LAW FROM REPRESENTING AIPI, LLC” —

• “Whitestone Law has represented Valjakka in this matter at various times, including by defending his deposition on October 12, 2023.”
• “It has also represented AiPi… Recently, however, as Whitestone Law attorney Joseph Zito conceded at the hearing on this motion, Netflix has made allegations concerning AiPi that render AiPi adverse to Valjakka. Specifically, Netflix accuses both AiPi and Valjakka of transferring and using litigation settlement proceeds in a manner that violated the California Uniform Voidable Transactions Act (“CUVTA”) and this Court’s September 21, 2023 injunction.”
• “Thus, both Valjakka and AiPi ‘have been accused of things by Netflix,’ where they ‘acted together . . . to some extent and not together in other extents,’ and consequently, both Valjakka and AiPi “will have an incentive to point the finger at each other.”
• “The facts before the Court demonstrate a significant violation of the duty of loyalty by Whitestone Law. Going forward, vigorously representing either AiPi or Valjakka will require attempting to damage the other one’s interests, both as to the responsibility for any CUVTA violation and as to any claim Valjakka might make concerning alleged misrepresentations by AiPi. That is a direct conflict of interest.”
• “Accordingly, Whitestone Law cannot represent both Valjakka and AiPi without violating the duty of loyalty.”

“Music executive sues industry lawyer Joel Katz, Greenberg Traurig firm” —

• “A music executive has filed a legal malpractice lawsuit, opens new tab against U.S. law firm Greenberg Traurig and Joel Katz, a former shareholder at the firm and longtime recording industry adviser, accusing them of botching contract negotiations for a job with Warner Music Group.”
• “Michael Flynn, a former music executive for Sony Music’s Epic Records and Universal Music’s Capitol Records, said Katz and current Greenberg Traurig shareholder Duane Sitar ‘actively used their positions of trust to benefit Warner, themselves, and others’ while he was their client.”
• “The lawsuit, filed Tuesday in Fulton County, Georgia, Superior Court, said Katz and Sitar helped Warner ‘devise a pretext for breaking its promise of employment’ to Flynn.”
• “Warner was trying to avoid legal action from a competitor, which stood to lose one of its key executives who wanted to join Warner and work with Flynn, the lawsuit said.”
• “A spokesperson for Greenberg Traurig and Sitar said Flynn’s lawsuit is ‘an old, previously dismissed claim which we consider meritless and will be contesting.'”

“Opioid Judge Rejects DQ Motion, But Cautions Motley Rice: ‘The Court Frowns’” —

• “A federal judge on Monday declined to disqualify Motley Rice from dozens of opioid cases, but said he was ‘very uncomfortable’ with its government client arrangements.”
• “U.S. District Judge Dan Polster, in the Northern District of Ohio, found the timing of pharmacy benefit manager OptumRx’s Dec. 15 disqualification motion to be suspect, particularly since it could have raised its concerns as early as 2018, when the judge appointed Motley Rice member Joe Rice to the plaintiffs’ executive committee in the opioid multidistrict litigation.”
• “‘If OptumRx always intended to move to disqualify Motley Rice as MDL co-lead counsel, then the court finds the timing of OptumRx’s motion somewhat troubling,’ he held.”
• “OptumRx, owned by United HealthCare, alleged that Motley Rice used its subpoena power in prior government cases to obtain confidential information, which it could use in the opioid cases against pharmacy benefit managers. Motley Rice represented Hawaii, the District of Columbia and Chicago in separate cases against OptumRx and other pharmacy benefit managers over insulin pricing.”
• “But Polster questioned OptumRx’s claim that Motley Rice obtained confidential documents while representing Chicago in a previous government case given that those materials should have been provided in the multidistrict litigation.”
• “Polster agreed with OptumRx, however, that Motley Rice was, in fact, acting as a ‘public officer’ in its prior government cases and is now representing private clients, even though they are cities and counties.”
• “‘The language of the retainer agreement cannot change what Motley Rice actually did,’ the judge, who held a hearing last month, ruled. ‘The unavoidable fact is that, when Motley Rice served government subpoenas and received documents in response—even if it was acting on behalf of those governmental entities under a contingent fee, independent contractor agreement—it had been granted authority to wield the power of the government.'”
• “He cautioned members of the plaintiffs bar about potential conflicts in similar circumstances.”
• “‘The court is very uncomfortable with the malleability of this quasi-government-employment configuration,’ he wrote. ‘If private outside counsel, like Motley Rice, intends to enter agreements where it has the power to wield (and potentially abuse) government power, then it needs to adhere to all the same rules to which government lawyers are subject. Motley Rice and all other law firms should carefully take this into account going forward.'”
• “‘There is a real difference between a law firm’s representations of a governmental entity as a private client and a law firm’s wielding the authority of that government. The facts happen to work in favor of Motley Rice in this case: were it not for the standing repository obligations, and the nature of the investigation materials OptumRx produced, the court’s discussion and analysis in this order might have been different.'”

“Prosecutors may call on Nadine Menendez lawyers as witnesses in bribery case” —

• “Despite a recent change in representation, Nadine Arslanian Menendez may soon be on the hunt for another lawyer. Recent court filings show that the government may bring David Schertler and other members of his law firm to the stand as witnesses against her and her co-defendants in a federal corruption and bribery case.”
• “Her co-defendants include her husband, Sen. Bob Menendez, and three New Jersey businessmen, including Wael Hana and North Jersey developer Fred Daibes. The third, Jose Uribe, recently flipped his not guilty plea to guilty.”
• “The United States attorney for the Southern District of New York requested a hearing to ensure Nadine Menendez ‘understands and knowingly waives the multiple issues arising from her continued retention of Mr. Schertler and his law firm,’ U.S. Attorney Damian Williams wrote in a letter to Judge Sidney Stein on Sunday.”
• “A proposed list of questions was included in the court document and outlined whether there is a conflict of interest or other potential problems related to Schertler, as well as Danny Onorato and Paola Pinto, who also represent Nadine Menendez, due to their personal knowledge of certain facts that the government has alleged are relevant.”
• “‘The Government believes that Schertler participated in, among other things, relevant conversations with you and counsel for your co-defendants Robert Menendez and Wael Hana,’ court documents said.”
• “The conversations included such topics as the nature and purpose of the payments co-defendant Uribe made for a Mercedes-Benz that Nadine Menendez received, the nature of payments Hana made towards Nadine Menendez’s mortgage, and the purpose of repayment for both.”
• “There is also a question of communications Nadine Menendez had with Schertler regarding a presentation he made to the United States Attorney’s Office on Aug. 11, 2023, the purpose of that presentation, and communication he had with counsel for Nadine and Bob Menendez.”