Bressler Risk Blog

“‘Palpable and Significant Risk’: Law Firm Disqualified From Federal Suit” —

• “U.S. Magistrate Judge James Wicks of the Eastern District of New York on Wednesday took the unusual step of granting a motion to disqualify counsel in a case seeking damages from Nassau County and several law enforcement officers in a wrongful conviction case.”
• “Wicks found that Sokoloff Stern, a firm representing the defendants, also represented a Nassau County assistant district attorney who raised concerns about the police conduct at issue in the case.”
• “The plaintiff in the case, Josiah Galloway, was wrongfully convicted of shooting a taxi driver and spent 10 years in prison before the Nassau County District Attorney’s Office’s Conviction Integrity Unit in 2018 reinvestigated the case and moved to vacate the conviction and dismiss the indictment.”
• “Wicks found that the Nassau ADA ‘is more aligned with plaintiff in this matter than with defendants,’ noting that she said in a deposition that she credited the testimony of an eyewitness that cut ‘directly’ against the defendants’ argument.”
• “If the plaintiffs’ attorneys from Elefterakis, Elefterakis & Panek called the ADA at trial and confronted her with her testimony in the deposition, the defense counsel would be placed ‘in the impossible position of having represented a witness earlier in the proceedings who, now before a jury, is testifying directly against the defendants… Such circumstances would fly far beyond the mere image of impropriety and would instead pose a palpable and significant risk of taint to the trial,’ Wicks wrote.”

For anyone else who has watched the recent documentary “LuLaRich” (streaming free on Amazon Prime), here’s some recent related news: “Reed Smith Beats DQ Bid Over Privileged LuLaRoe Docs” —

• “A California appellate panel has backed a lower court’s ruling that Reed Smith LLP shouldn’t be disqualified from a suit against clothing retailer LuLaRoe, agreeing that its attorneys followed the necessary privilege obligations when handling documents leaked to the firm anonymously by an opposing firm’s legal secretary.”
• ” In a unanimous unpublished decision Friday, the three-judge panel declined to disqualify Reed Smith from representing Providence Industries LLC in the manufacturer’s contract dispute case against LuLaRoe LLC, finding that the attorneys’ decision to notify opposing counsel of the leaked documents was ‘exactly’ what the precedential privilege law instructs.”
• “‘There is no evidence compelling the conclusion that Reed Smith has used or is likely to use the documents at any point in the litigation,’ the appellate panel said.”
• “In 2019, Reed Smith began getting anonymous correspondence that seemed like “the musings of a disgruntled person who was following” the Providence v. LuLaRoe case, according to the panel. Given the public nature of the case, the documents did not raise eyebrows, the firm said, according to the panel. The letters were later determined to have been sent by a legal secretary at Floratos Loll & Devine PLC, which was serving as outside general counsel to LuLaRoe, the panel said.”
• “‘Within days’ of the Sept. 19, 2019, receipt of the fourth letter, Houston and Rivas ran it by Reed Smith’s in-house counsel and the California State Bar’s ethics hotline, the panel said.”

And something else that caught my eye, for those inclined: “Lawyer Lies and Political Speech” —

• “ABSTRACT. Lawyer lies designed to sabotage valid election results are not protected political speech under the First Amendment. Ethics rules governing candor and frivolous litigation require sanctions, if not disbarment. Moreover, the duty of candor should be extended from the courthouse to the public square when lawyer lies threaten our democracy. “Lawyer lies pervade politics regardless of party, though to be sure, they became more noticeable in the Trump Era. In the aftermath of the 2020 election, lawyers desperate to alter the outcome of validly cast votes spewed outrageous lies. Their election fraud lies stand apart from those made by lawyers earlier in President Trump’s Administration because of the consequences at stake.”
• “This Essay contends that ethics rules governing candor in the courtroom and frivolous litigation require sanctions for lawyer lies designed to sabotage valid election results. Further, it makes the case for extending the duty of candor to the public square when those lies threaten extreme harm. Lies may be justifiable in political dealings and in the practice of law, but the legal profession should not tolerate them when pressed on behalf of government officials aiming to undo legitimate election results, whether in the courtroom or in the court of public opinion. While this Essay focuses on the lies told following the 2020 election, the analysis here similarly applies to past elections, and especially to future elections.”
• “Despite pledges and promises to seek truth, lawyers sometimes must engage in dishonesty to fulfill duties to their clients. For example, ethics rules explicitly permit lawyers to obscure the truth during negotiations.”
• “Lawyers acting in political roles, whether representing a government official or holding office themselves, frequently confront significant tensions surrounding honesty.”
• “Lying occurs regularly in the practice of law, though perhaps not as often as it does in politics. The codes governing ‘ethics’ for lawyers allow communications that many would find dishonest and unethical in other contexts.”
• “Professional conduct rules not only permit lawyer lies, but in some instances may require less than candid speech, if not outright lies. For example, bluffing in negotiations is expected and the failure to do so may risk violating the duty of competent representation. Lawyers are allowed to argue contrary positions in different jurisdictions at different times for different clients. A District of Columbia Bar Ethics Opinion authorizes lawyers working in an intelligence or national security capacity to
  ‘act deceitfully’ if required for engagement in clandestine activities.65 And the Colorado Supreme Court revised its rules to explicitly permit lawyers ‘to advise, direct, or supervise others, including clients, law enforcement or investigators’ in ‘engaging in investigative deceit.'”

“Judge Warned Trial Lawyer Not to Cross-Examine Former Client, Laying Grounds for Appeal of $10M Verdict” —

• “The jury found that Ugo Colombo and his company breached a contract, but only the company was held financially liable. A White & Case lawyer previously represented Colombo but cross-examined him despite a warning from the presiding judge that it could provide grounds for an appeal. The jury verdict amounted to $10 million, which nets to $1.9 million after application of escrow proceeds.”
• “‘Lawyers who litigate against and cross-examine former clients should exercise restraint to avoid maligning their former clients in the press,’ Sean Burstyn, who is among the attorneys that represented Colombo, said on Monday. ‘The legal profession suffers enough from misperceptions about the loyalties of its members.'”
• “As a result, the defense is likely to file an appeal over an ‘appearance of impropriety’ that Burstyn raised leading up to Robinson’s cross-examination of the White & Case partner’s former client, Colombo, court transcripts suggest.”
• “Moving forward, the basis for a potential appeal lies in the cross-examination that Robinson conducted of his former client, Colombo. Miami-Dade Circuit Judge William Thomas previously suggested that Robinson could have been aware of confidential information due to his prior representation of Colombo.”
• “The state court transcripts show that Thomas specifically advised Robinson against conducting the cross-examination, warning, ‘You’re proceeding at your own peril… In the 17 years on the bench, I haven’t had the occasion where the lawyer who previously represented the client was going to cross-examine the client, even though there was no motion for disqualification,’ Thomas said, according to the transcript.”

“Gilstrap discloses potential Microsoft, Walmart conflicts in closed patent cases” —

• “An East Texas federal court on Friday disclosed that a judge with one of the busiest patent dockets in the country had potential financial conflicts in dozens of closed patent cases involving Microsoft, Walmart, Target and others.”
• “In letters on Friday to the parties in those cases, David O’Toole, the clerk of the court, said that it was brought to U.S. District Judge Rodney Gilstrap’s attention that ‘a trust in which his spouse has an interest’ held stock in the companies, which also include IBM, JP Morgan, Home Depot and many others, while he presided over cases brought between 2011 and 2018.”
• “The letters come in the wake of a Wall Street Journal report last month highlighting certain federal judges’ alleged financial conflicts in disputes they oversaw. The report said Gilstrap had conflicts in 138 cases, more than any other of the 130 federal judges identified in the story.”
• “Some of the letters also said Gilstrap himself owned stock in McDonald’s and Alcoa during cases in his Marshall, Texas, court, and that even though U.S. Magistrate Judge Roy Payne dismissed them before he took any action, the stock ownership would have required Gilstrap’s recusal.”
• “The court asked the parties to respond to the possibility that Gilstrap should have disqualified himself from hearing the cases under the code of conduct for federal judges.”
• “Lawmakers introduced legislation Monday in both houses of the U.S. Congress that would require judges to report stock trades over $1,000 within 45 days and post their financial disclosures online. The federal judiciary has said it would review its conflict-screening process, and the chair of the federal judiciary’s ethics committee said at a Tuesday hearing that it was developing a new electronic system for processing judges’ financial disclosures more quickly.”

“How To Address The Shadow IT Problem” —

• “Let me start with a story I heard recently. A law firm had in place a written policy that set forth a list of approved services, software and tech devices that could be used by staff and attorneys. During a network security assessment conducted by an outside vendor, the question ‘Does anyone at the firm use Dropbox’ was asked. The answer was ‘Absolutely not. Dropbox is not an approved service.’ This is when one of the security consultants informed the firm that over 80 email addresses of firm attorneys and staff were tied to individual Dropbox accounts. Such much for firm policies.”
• “The concern over the 80+ individuals who were using Dropbox was that they would fail to take necessary steps to use it in a competent and secure way and that indeed was the case. Missteps would have included things like not enabling two factor authentication, failing to create a unique strong password for account access, and not responsibly using file permission settings to control file access, just for starters.”
• “When staff and attorneys at any firm make unilateral decisions to not abide by a firm’s policies and procedures and just use any service, software, or device they like, unintended consequences can follow. Such decisions might be ‘justified’ by a belief that the rules don’t apply to them, the rules make no sense or are too difficult to follow, no one can tell them what they can or can’t do with their own devices, or even that doing so made their work easier or more efficient in their minds. Unfortunately, if the unintended consequence turns out to be a network security breach, which is the greatest concern, their reasoning matters not.”
• “Truth be told, I believe completely eradicating the problem for any firm is going to be an unattainable goal. That said, the problem can be effectively managed. Before you can responsibly address the problem, however, it’s important to understand that shadow IT is often brought into play because there were tech needs that were unmet, associated risks that were not understood, and/or an apathy about existing policies.”

“Southern Indiana attorney reprimanded for representing opposing parties in criminal matter” —

• “Carla Ginn, a solo practitioner in Scottsburg, has been publicly reprimanded for violating the prohibitions against conflict of interest by simultaneously representing a father, the alleged perpetrator, and his son, the alleged victim.”
• “According to the disciplinary complaint, Ginn had been dating the father for about four months in 2018 when she began acting as co-counsel on his older son’s case related to three criminal matters… In January 2020, the father was arrested and charged with 13 felony counts after getting into an altercation with the older son Ginn was representing and a younger son. Although the older son was listed a victim, Ginn appeared with the father at his arraignment and subsequently entered a formal appearance on the father’s behalf.”
• “After the father was order not to have unauthorized contact with his sons, Ginn continued to simultaneously represent the father and older son. She received discovery, including the recorded statements of the older son and his brother in the father’s criminal matter.”
• “Also, in February 2020, she entered her formal appearance in the older son’s previous criminal cases and moved to alter the terms of his probation so he could work part time for his father. The trial court denied the request.”

“A personal conflict of interest drew an agreed public reprimand from the Indiana Supreme Court” —

• “Respondent represented a businessman (‘Seller’) who was negotiating to sell his company to a ‘Buyer.'”
• “Prior to Respondent’s representation, the parties had entered into an exclusivity agreement that limited Seller’s ability to negotiate with others for 150 days. Seller ultimately rejected Buyer’s final offer, and the sale did not go through.”
• “Respondent entered his last billing entry in the matter on November 25, 2015. On November 27, 2015, Respondent, on behalf of a company he owned, sent a proposed purchase agreement to Seller. Although Seller was aware of Respondent’s affiliation with his company, Respondent did not advise Seller in writing that he was no longer Seller’s counsel and was not representing Seller in the proposed purchase agreement, nor did Respondent obtain Seller’s informed consent in writing. On November 30, Seller sought legal advice from Respondent regarding release from his exclusivity agreement with Buyer, which Respondent provided despite being materially limited by his own personal interest. Respondent and Seller consummated their agreement on December 4, 2015.”

“Commentary: Todd Rokita’s odd compulsion” —

• “When he was a small boy, Indiana Attorney General Todd Rokita must have been the kind of kid who had to touch a hot stove multiple times before he figured out it burned. Time and age haven’t taught him much.”
• “The Indiana Supreme Court just rejected—for the second time—Rokita’s attempt to keep a lawsuit filed by Indiana Gov. Eric Holcomb from moving forward. Holcomb sued the Indiana General Assembly for overriding his veto of a bill that violates the Indiana constitution by granting lawmakers the power to call the legislature back into session. The constitution clearly says only the governor may call the legislature into session.”
• “He [Rokita] argued, nonsensically, that the governor couldn’t hire outside counsel without his permission. That he could represent both parties in the dispute. That he also could assume the court’s role and serve as arbiter.”
• “From the trial court to the state’s highest court, judges and justices haven’t said that Rokita’s arguments were misguided, mistaken or even just plain wrong. They have said that the arguments were absurd.”
• “At different times, Indiana’s attorney general has represented the governor and the state legislature when each has been sued. When the two branches of government fall into a constitutional dispute, the notion that the attorney general doesn’t have a conflict of interest is…well, absurd. As a matter of principle, Rokita should have sat this one out.”
• “When Rokita’s feckless determination to insert himself into the battle between governor and legislature popped up, I filed a Freedom of Information Act request for records on the number of times the attorney general’s office has paid for outside legal counsel in recent years… Between 2015 and now, the state of Indiana has hired outside counsel at least 45 different times. Each time, the attorney general has approved the hiring.”

“Judge Denies DOJ Bid to Disqualify Ex-Trump Official, Warns Against ‘Furthering Partisan Causes‘” —

• “A federal judge in Texas on Wednesday rejected the U.S. Department of Justice’s attempt to disqualify a lawyer who served in the department during the Trump administration from an immigration case, suggesting that the DOJ’s motion was motivated more by politics than legal concerns.”
• “U.S. District Judge Mark Pittman of the Northern District of Texas said the government’s effort to boot the lawyer, Gene Hamilton, from the case was ‘a mere shot across the bow meant to blur the real legal issue before the court.'”
• “A DOJ lawyer, Brian Stoltz, argued that ethics rules meant to prevent ‘side switching’ barred Hamilton from representing Texas in the lawsuit, which focuses on a federal immigration rule enacted during the COVID-19 pandemic. The government said Hamilton obtained confidential information about the government’s legal arguments while working for the Justice Department and was substantially involved in cases similar to Texas’ lawsuit that amounted to the same underlying ‘matter.'”
• “Hamilton was a counselor to Attorneys General Jeff Sessions and William Barr during the Trump administration. He is representing Texas as part of America First Legal, an organization founded by former Trump senior adviser Stephen Miller to bring legal challenges to Biden administration policies.”
• “Pittman found that Hamilton did not have confidential information relevant to the case because much of the information in Texas’ complaint is publicly available. Because Hamilton left the government during the presidential transition, he was not working for the DOJ when the actual regulation challenged in the lawsuit was implemented, the judge found.”

“DLA Piper Defends Representation In $30M Power Plant Row” —

• “DLA Piper US LLP urged the state court to reject the disqualification bid by Curtiss-Wright Electro-Mechanical Corp., which claims the global law firm has a conflict of interest in representing Westinghouse Electric Co. LLC.”
• “Westinghouse sued Curtiss-Wright in Georgia in July over the allegedly late supply of reactor coolant pumps for electric and nuclear power plants in the Southeast, claiming about $30.7 million in liquidated damages. Curtiss-Wright sought the firm’s disqualification on the basis that it was represented in 2013 and 2014 by a Swedish attorney, now working for DLA Piper, in a substantially similar dispute with Westinghouse over the supply of reactor coolant pumps for nuclear power plants in China.”
• “But counsel for DLA Piper, a nonparty in the Georgia case, said Curtiss-Wright failed to meet its burden showing the representation of Curtiss-Wright more than seven years ago by Swedish DLA Piper attorney Karl-Oskar Dalin, when he was with another law firm, involved substantial similarities with the Georgia litigation.”
• “‘We’ve heard a lot of generalities about superficial similarities,’ Nancy Hart of Gibson Dunn & Crutcher LLP, an attorney for DLA Piper, said during a motion hearing. ‘But once you get past that surface, the similarities really end.'”
• “The Chinese dispute, and Dalin’s brief involvement in it, happened before Curtiss-Wright was even due to start supplying reactor coolant pumps to Westinghouse for construction projects at the Alvin W. Vogtle Electric Generating Plant in Waynesboro, Georgia, and the Virgil C. Summer Nuclear Power Station in Jenkinsville, South Carolina, Hart said. Dalin joined DLA Piper in Sweden in 2016 and is a partner in its Stockholm office.”
• “But counsel for Curtiss-Wright said Dalin was sent a confidential memo in late 2013 from one of its lawyers at a different firm, assessing the claims and liquidated damages for the Chinese dispute with Westinghouse. That memo included Curtiss-Wright’s strengths and weaknesses in relation to the claims, which are substantially similar to those in the Georgia litigation, said Craig K. Pendergrast of Taylor English Duma LLP, an attorney for Curtiss-Wright.”
• “‘The reactor coolant pump design specifications are common to all of these projects. That’s a common issue for all of them as to the impact of the design changes and the subsequent production and delivery of the RCPs,’ Pendergrast said. ‘The formula for the liquidated damages is common across the board.'”

“Law Firm Shouldn’t Have Represented Local Bars while ABC Attorney was on their Payroll, Giattino and Fisher Say” —

• “Hoboken Councilwomen Jen Giattino and Tiffanie Fisher have asked for an investigation into the restructuring of two Hoboken bar liquor licenses after learning that the attorney representing the city’s ABC Board [Alcoholic Beverage Control] is employed by the firm representing those bars.””Giattino and Fisher said they learned that the law firm Schenk, Price, Smith & King was handling the ownership restructuring of two local Hoboken bars, McSwiggan’s and Green Rock, while John Allen, a city employee and the attorney for the local Alcohol and Beverage Commission Board, was also employed as one of Firm’s attorneys.”
• “‘Assistant Corporation Counsel John Allen resigned as Counsel for the Alcohol Beverage Control Board on October 13,’ City Spokesperson Marilyn Baer told TAPinto Hoboken when asked about the possible conflict. ‘He chose to resign to avoid future potential conflicts. As previously disclosed, Mr. Allen is affiliated with Schenck, Price, Smith & King LLP.'”
• “Hoboken does allow attorneys of its boards to work for or own private legal firms, according to local ordinance, as long as the attorney gives priority to city obligations over private practices so that there will be no conflicts of interest.”
• “Baer continued to explain that Allen resigned from the position with the city ‘instead of simply recusing himself on individual matters pertaining to the license holder,’ and therefore ‘went the extra mile to resolve the matter.'”
• “Giattino, who filed a request for information on Oct.15 and was first told she would not receive a response until Nov. 10, after the upcoming election where the mayor and three City Council seats are being contested, still doesn’t buy it. ‘We learned that Schenk Price was representing at least one liquor license holder back in September. So, getting these responses from Hoboken’s Corporation Counsel means that Hoboken either has no controls in place to manage conflicts like this or the Bhalla administration condones this behavior, or both,’ she said.”

“Cruise Co. Wants Atty DQ’d From Personal Injury Suit” —

• “Attorney Michael Dunlavy doesn’t work at Gerson & Schwartz anymore, but he could have potentially handed over confidential information he gained while working at Foreman Friedman PA, which is representing the cruise line in a trip-and-fall lawsuit filed by Emily Chen, according to a motion to disqualify filed Thursday.”
• “‘Dunlavy acquired confidential, nondiscoverable information about Norwegian in this matter and it would be prejudicial to Norwegian since it would give plaintiff an unfair advantage,’ the cruise line said. ‘The entire firm of Gerson & Schwartz, Dunlavy’s former employer, should be prohibited from representing plaintiff in this matter since the conflict of interest between Dunlavy and Norwegian should be imputed to his entire new firm.'”
• “However, the motion is misguided, Gerson & Schwartz founder and senior partner Philip M. Gerson told Law360 Friday. ‘I’m surprised they didn’t pick up the phone to call me. Had they done, so I would have told them that Michael Dunlavy worked for our firm for a total of nine days,’ Gerson said. ‘He never touched or saw the Chen file, and we have no idea what he did at Foreman Friedman.'”
• “Norwegian said that for most of the eight months Dunlavy was employed at Foreman Friedman, he ‘was the associate attorney handling the matter day to day’ for Norwegian, the motion said. He resigned from the firm on May 17. Foreman and Friedman said it just ‘recently learned’ about where Dunlavy went after that.”
• “The cruise line’s argument is that the Rules Regulating the Florida Bar, which encompass district courts for the Southern District of Florida, requires that Dunlavy be disqualified from representing Chen. Norwegian goes on to cite the decision in Armor Screen Corp. v. Storm Catcher Inc., which determined that when an attorney is disqualified so also is the entire law firm, the company said.”

With kind thanks (as always) today’s update focuses on the latest from Bill Freivogel:

• “JKAYC, LLC v. Noah Bank, No. 20-CV-943 (PKC) (SMG) (E.D.N.Y. Sept. 30, 2021). Tenant moved to disqualify Landlord’s law firm (“Law Firm”) because Law Firm had for many years represented Tenant on other matters. All that ended in June 2019. The magistrate judge granted the motion. In this opinion the district judge denied Landlord’s motion for reconsideration. Law Firm did not represent Tenant in negotiating or executing The Lease. However, Law Firm’s of-counsel (and office sharer) did. The of-counsel did communicate with Law Firm about various aspects of the lease. The decisions turned on substantial relationship, and, to a small extent, playbook. Because of the factual intensity of both courts’ opinions and, because it all is of dubious precedential value, we will not burden you more with background.”
• “LaSalle Elec. Contractors Inc. v. 2590687 Ont. Inc., 2021 ONSC 6547 (CanLII) (Super. Ct. Ont. Oct. 4, 2021). Hotel construction project. LaSalle, an electrical contractor, is suing the owner of the project, 259. 259 has filed a third-party action against the project construction manager, JBL. Law Firm has appeared representing both LaSalle and JBL. 259 moved to disqualify Law Firm, claiming, in part, that Law Firm’s representation of both LaSalle and JBL would enable Law Firm to use confidential information from one to benefit the other — all to the unfair disadvantage of 259. In this opinion the court granted the motion to disqualify Law Firm from representing LaSalle. Recognizing the reality of many third-party actions, the court found the joint representation to be ‘untenable.’ ‘Put bluntly, it is not wholly in JBL’s interests for LaSalle’s claim against 259 to succeed.'”
• “In re S-Tek 1, LLC, 2021 WL 4876930 (D.N.M. Oct. 19, 2021). Chapter 11. Pre-petition, Debtor sued Company for fraud and related grounds. Company counterclaimed, claiming Debtor owed Company money. Company also filed a third-party claim against persons related to Debtor (“Individuals”). Debtor moved to employ Law Firm as Debtor’s Counsel. At the same time Law Firm would represent Individuals in the litigation. Several parties objected to the joint representation, claiming Law Firm would have a conflict of interest. In this opinion the bankruptcy judge approved retention of Law Firm with several conditions. The court characterized the conflict as “potential.” The court said that if the conflict ripened into an actual one, Law Firm would have to resign. To prevent that from happening, the court restricted Individuals from raising issues that would cause an actual conflict. [Our note: Given the unique relationships of the parties, and the questionable precedential value of the case, we will not burden you with the various ways the conflict could become an actual one. The bankruptcy judge took pages doing that.]”
• “Tecnicas Reunidas De Talara S.A.C. v. SSK Inteneria Y Construccion S.A.C., No. 21-22206-CIV-ALTONAGA (S.D. Fla. Oct. 13, 2021). SSK successfully achieved a $40 million international arbitration award against Tecnicas. Tecnicas brought this action to vacate the award because of “side-switching” by a lawyer (“Lawyer”) during the arbitration. Early in the arbitration Tecnicas added lawyer and his firm (“Firm 1”) to “its team of counsel.” Lawyer, while at Firm 1, actively participated for Tecnicas in the arbitration hearing (during March 2-6, 2020). Before the deadline for filing post-hearing briefs, Lawyer left Firm 1 and joined the firm representing SSK (“Firm 2”). Tecnicas first raised this “side-switching” by Lawyer when it filed this petition to vacate the award. In this opinion the court denied relief to Tecnicas, granted SSK’s motion to dismiss this case, and confirmed the award. First, the court found no prejudice to Tecnicas. The court did not apply a Rule 1.9-type analysis because Tecnicas waited until after the arbitration award to raise the conflict. Thus, the standard shifted from “substantial relationship” to prejudice. The court also found that Tecnicas waived the conflict by not raising it in the arbitration tribunal and waiting until after the award to bring it to this court. A lot of the court’s analysis is dependent on the application of international arbitration rules, which we will ignore here given the unusual sequence of events and nature of the case. In denying attorneys fees to SSK, the court said that Tenicas’ ‘arguments are not frivolous, as evidenced by the 22 pages of analysis contained in this Order.'”
• “Hepworth Holzer, LLP v. Dist. Judge Norton, 2021 WL 4692822 (Ida. Oct. 8, 2021). Gary Tubbs was injured in a bicycle accident on property owned by a recreational association (“Ass’n”). Tubbs hired the Hepworth law firm (“Hepworth”) to bring a case against Ass’n. The Elam firm (“Elam”) represents Ass’n. Elam filed a motion for summary judgment. While that motion was pending, an associate (“Lawyer”) left Elam and joined Hepworth. One month after Lawyer’s move, the trial court granted summary judgment for Ass’n. Lawyer, then at Hepworth, helped draft a motion for reconsideration. Earlier, while at Elam, Lawyer did discuss legal theories regarding the motion for summary judgment with two Elam lawyers. Lawyer billed no time to the case. Ass’n moved to disqualify Hepworth. The trial court granted the motion. Hepworth petitioned the Idaho Supreme Court for mandamus or prohibition. In this opinion the court, in granting mandamus (reversing the disqualification), discussed several procedural issues at great length. We will skip those. The court was particularly impressed with Lawyer’s “negligible contact” with the case while at Elam and the prejudice to Tubbs if the disqualification of Hepworth were sustained.”

Hat tip to Simon Chester (Head of Client and Matter Acceptance Team at Gowling WLG) for sending word of: “Potential conflicts of interest prompt Rogers to switch law firms” —

• “The battle for control of Rogers Communications Inc., which is coming to a head in a B.C. court Monday, has involved an ever-increasing number of lawyers as players in the corporate drama cycle their way through law firms because of potential conflicts of interest. The B.C. Supreme Court hearing is expected to decide if Edward Rogers can dictate who is on, and off, the board of Canada’s largest cellphone and cable company, founded by his father. Rogers is on its second law firm in as many weeks.”
• “Hiring Goodmans triggered another legal challenge last week, as lawyers for Edward Rogers flagged a new potential conflict. In court filings, they pointed out Goodmans is now representing both the company and chief executive Joe Natale, who Mr. Rogers unsuccessfully attempted to fire in late September, setting off an increasingly bitter feud. Goodmans responded by saying both the CEO and the company signed off on the firm as Fasken’s replacement, eliminating the issue.”
• “Legal experts say the conflicts laid bare at Rogers, which play out against a backdrop of consolidation in corporate Canada, highlight the barriers to mergers among major law firms and strengthen the business case for specialized legal boutiques.”
• “‘Situations like Rogers create unique conflicts,’ said lawyer Gavin MacKenzie at MacKenzie Barristers, an expert in legal ethics. Mr. MacKenzie is a former head of a regulatory body for lawyers as treasurer of the Law Society of Ontario. ‘You have a public company, where everyone was previously rowing in one direction, suddenly breaking down into constituencies that have very different goals, creating significant challenges for their lawyers,’ he said.”
• “Last Friday, court filings show three members of the Rogers family – Loretta Rogers, widow of the founder, and two of her daughters, Melinda and Martha – attacked perceived conflicts at Torys LLP. The corporate law firm has overseen the clan’s affairs for decades and works for the Rogers Control Trust, an entity that controls 97.5 per cent of the company’s voting shares. In the 1960s, newly graduated law student Ted Rogers articled at Torys before moving into radio and cable.”
• “A series of Supreme Court of Canada decisions over the past three decades raised the bar on a law firm’s duty to its clients. In a 2013 decision on a case involving Canadian National Railway Co., the top court said a law firm cannot act for a client whose interests oppose another client, even in unrelated matters, unless both sides consent.”
• “A number of small firms with central roles in the Rogers leadership struggle, including Lax O’Sullivan Lisus Gottlieb, trace their roots to litigators who left major firms in part to avoid conflicts. Partners at the boutique used to work at Goodmans and McCarthy Tétrault. Mr. MacKenzie said as courts raised the bar on a lawyer’s duty to its clients, they ensured a steady stream of work will go to boutique firms with proven practitioners.”

For more detail on the substance of the matter, see: “Family battle for control of Rogers lands in B.C. court.”

“PwC’s Canada Legal Arm Sees Opportunity for Its Immigration Practice in Sale to Private Equity Firm” —

• “Big clients will no longer be conflicted out by strict audit rules that law firms allied with PwC had to follow.”
• “The uncoupling of the tax and immigration mobility business from Big Four accounting giant PwC will open doors for the Canadian immigration law firm allied with PwC, as it will no longer be bound by strict conflicts rules that now govern which clients it can take on, according to the head of the firm’s Canadian immigration practice.”
• “PwC agreed last week to sell its mobility consulting division to American private equity firm Clayton, Dubilier & Rice for US$2.2 billion. The deal, which covers 5,700 people in 41 locations around the globe, includes 500 Canadians and 200 lawyers and staff at PwC Law, which has offices in Toronto, Montreal and Vancouver.”
• “‘With our current affiliation with PwC we certainly are bound by independence restrictions,’ said Melodie Molina, a partner with PwC Law in Toronto. ‘Without being part of PwC, it does open up the doors into a market that is free from those audit restrictions.'”
• “Molina said PwC Law will continue to exist, providing tax and corporate law services, but the immigration practice, which includes both U.S. and Canadian lawyers, will be carved out into a new business.”
• “PwC, as well as Deloitte and KPMG, hooked up with small but successful business immigration law firms in 2013-14. EY has had an affiliated law firm practicing tax and immigration law firm for even longer. The equity partners in the law firms were also partners in the accounting firms. While there has been shared management in areas such as human resources, the law firms themselves were arms-length operations under regulatory rules.”
• “David Garson’s firm Guberman Garson allied with Deloitte in 2014 but he left the partnership in February 2020 to go back to running his own boutique firm. He said it was sometimes ‘very difficult’ to bring in big clients because any hint of an audit relationship anywhere else in the world meant the clients would be ‘conflicted out.'”
• “He said when the Big Four got into the ‘law game’ they probably initially thought it was ‘an essential part’ of what they could offer clients. While that was true to some extent, the issue of operating margins between law and accounting firms differed quite a bit so returns, in the long run, may not have been what they expected. ‘In an immigration firm, typically margins would be 30 to 35%, whereas an accounting firm wants to see 50%,’ he said.”

“Pandora Papers Unleash A Lot Of Biglaw Evils On The World” —

• “But the Pandora Papers also have the side effect of revealing which Biglaw firms are neck deep in assisting these clients in moving this money… for whatever reasons. After all, you can’t set up a bunch of dummy corporations and funnel resources into novel, difficult to pierce, ‘trust-like’ instruments without lawyers and The New Republic took a look at which law firms have turned up in the data dump.”
• “How do law firms think they can get into this sort of work? Especially in an environment where working as a functional lobbyist is fraught with risk. It all depends on what you call yourself. From the TNR report:
  • “Some lawyers now combine legal services with P.R. representation—thus taking skillful advantage of foreign lobbying exemptions that remain wide open. (One of the first hires the Jordanian king-cum-kleptocrat made after his offshore holdings were revealed was American firm DLA Piper, which will now help him with ‘media matters.’)”

“After WSJ’s Explosive Exposé on Judges’ Financial Conflicts, Free Law Project Posts the Data For All to See” —

• “In an explosive exposé last week, The Wall Street Journal reported that 131 federal judges broke the law by hearing cases where they had a financial interest.”
• “Now, the Free Law Project is making that data available to all, creating the first online database of federal judges’ financial disclosures.”
• “The database is a collection of over 250,000 pages of financial records gathered since 2017 through requests to the federal judiciary, Michael Lissner, executive director and CTO, said in a blog post today.”
• “The files contain the disclosure records for every federal judge, justice and magistrate from 2011 to 2018, with the 2019 disclosures coming soon. It also has some files from 2003 to 2010, gathered from other sources.”
• “Until 2017, federal judges’ financial disclosures could be obtained only by requesting them individually by fax. That changed in 2017, when the Judicial Conference authorized disclosures to be released on ‘electronic storage devices … at no cost to the requestor.'”

“Facing Backlash, Mayer Brown Dumps Client” —

• “Last week, the Biglaw firm Mayer Brown came under fire for its most recent representation of the University of Hong Kong. The university is trying to get a work of art — the Pillar of Shame sculpture by Danish artist Jens Galschiøt designed to commemorate the victims of the 1989 Tiananmen Square protests and massacre in Beijing — removed from its campus. The play is being called an ‘attack on art’ and reportedly shows the firm is ‘complicit in the suppression of human rights.'”
• “Not a good look for the firm. Particularly one that likes that like to tout its human rights expertise. So, maybe it really wasn’t a surprise that the firm has backed away from its client in this particular representation.”
• “But proving you can’t please all the people all the time, there’s now backlash to the backlash. In a social media post, former Hong Kong chief executive Chun-ying Leung said Mayer Brown caved to political pressure in withdrawing its representation, calling for a ‘China-wide boycott’ and saying: ‘From here on, no client in Hong Kong or Mainland China, particularly those with Chinese government connections, will find Mayer Brown dependable.'”