Risk Update

Conflicts Allegations — Judge Conflict Accusation Quashed, Arbitrator Conflict Argument Invalidated

Posted Dan Bressler

“Texas Attorneys Avoid Lawsuit Over Gas-Technology Settlement” —

  • “After Betty died in 2012, her daughter Carol Sousa disputed the [IP licensing] agreement between the law firms and her mother in a state trial court, alleging that the law firms had taken advantage of her mother… The trial court therefore affirmed the parties’ arbitration award and granted attorneys’ fees.”
  • “Sousa argued on appeal that the arbitrator had a conflict of interest, because he had a prior business relationship with Wilson Elser, the law firm representing the IP attorneys. Sousa alleged that the arbitrator signed a false arbitrator oath.”
  • “The appeals court said Thursday there was no evidence of the arbitrator’s disqualification because he disclosed the relationship in his oath. The arbitrator disclosed that he had conducted 11 mediations involving seven attorneys who were associated with Wilson Elser from 2006-2019.”
  • “These disclosures were made after the arbitrator’s appointment, but before his confirmation and before any proceedings in the arbitration began, the court said.”
    “Sousa previously alleged the arbitrator refused to hear material evidence and allow cross-examination. But the court found no evidence of actual bias at the hearing, with the court saying her ‘arguments aren’t consistent with the record.'”
  • “‘Sousa offers a long list of complaints but offers little discussion or explanation as to how the excluded evidence was material and therefore its exclusion deprived her of a fair hearing,’ the court said. The appeals court affirmed the judgment of the trial court.

“Abbott Labs’ Judge Choice Leads To JPML Conflict Questions” —

  • “The Judicial Panel on Multidistrict Litigation raised no red flags Thursday about consolidating 18 lawsuits alleging that Abbott Laboratories’ Similac infant formula caused a deadly illness in premature babies, but at a Seattle hearing the panel questioned whether Abbott’s choice of judge has an appearance of conflict because he once represented the company.”
  • “The six-judge panel heard attorneys for the plaintiffs and Abbott argue in support of consolidating the cases currently in federal courts in six states. The judges peppered Abbott attorney James Hurst of Kirkland & Ellis LLP with questions about Abbott’s choice of U.S. District Judge John F. Kness, who represented Abbott in a lawsuit prior to joining the bench in 2020.”
  • “Hurst said more than 15 years has passed since Judge Kness represented Abbott in a lawsuit related to an explosion at a pharmaceutical plant, which makes it implausible that the judge would still have any allegiance to the company.”
  • “U.S. District Judge Madeline Cox Arleo challenged Hurst, noting that Judge Kness has listed his Abbott representation as one of the most significant cases he handled in his career.”
  • “‘Judge Kness’ extensive, personal handling of significant litigated matters on behalf of Abbott invites the appearance of bias. While no motion for recusal has been filed, issues surrounding such representation may introduce unnecessary delay and inefficiency to the litigation,’ according to a brief filed by plaintiff Arturo Andaluz.”