Risk Update

Conflicts Allegations Evaluated — Freed from Disqualification (But “Frowned” At), “Lawyer as Witness” Conflicts Concerns

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.”