“Nelson Mullins Faces Ex-Client’s $1M Fee Suit Over Conflict” —

• “A former client of Nelson Mullins Riley & Scarborough is suing the firm and two partners over their fees, claiming they failed to disclose a conflict in representing him in a fraud investigation and indictment that later landed him 10 years in prison.”
• “Brian Martinsen, who was convicted of defrauding investors in nine related private funds referred to as ‘StraightPath Funds’ and sentenced to 10 years in prison in May, filed a complaint in the Manhattan Supreme Court on Tuesday looking to reclaim $950,000 he said should have been refunded to him after Nelson Mullins withdrew as his counsel.”
• “According to the complaint, Nelson Mullins and its partners Scott Sherman and Jonathan Etra failed to disclose a conflict of interest until opposing counsel from the government pointed out the issue to the federal judge handling Martinsen’s case.”
• “The conflict, according to the complaint, was that Nelson Mullins also represented Martinsen’s co-defendants and co-fund-principals Michael Castillero and Eric Lachow in a related civil enforcement action, both of whom had then become cooperating government witnesses against Martinsen. The partners and the firm knew about this when they agreed to represent Martinsen against the government, the complaint states.”
• “Martinsen said Nelson Mullins had him execute a $1.5 million retainer agreement on the day of his arraignment in 2023 and accepted a wire from him for the same amount despite the conflict. The conflict remained undisclosed to Martinsen until March 2025 when the government filed a letter with the Southern District of New York court alerting the judge that Martinsen did not have the conflict-free counsel he was entitled to under the Sixth Amendment, the suit says.”
• “After that letter was filed, Nelson Mullins filed a motion to withdraw as Martinsen’s counsel. The court granted that withdrawal motion, and Martinsen retained new attorneys, Matthew Brissenden and Kevin Keating, both of whom run their own law offices.”
• “Nelson Mullins did not fully refund Martinsen’s retainer, the complaint states. Instead, the firm held on to $950,000 of the $1.5 million on the ‘self-serving’ determination that it had earned that amount in fees despite the conflict, the lawsuit alleges. Martinsen’s state court suit seeks to recover that remaining amount.”
• “‘Under controlling New York authority, an attorney who engages in misconduct by violating the Rules of Professional Conduct is not entitled to legal fees for the services rendered, and an attorney whose own conflict of interest compels withdrawal may not recover in quantum meruit,’ the suit says.”
• “The complaint seeks fee forfeiture and disgorgement for the $950,000 held by Nelson Mullins. It also lays out claims for breach of fiduciary duty, breach of contract, fraudulent inducement, deceit and unjust enrichment.”
• “Further, the suit states that Nelson Mullins failed to provide Martinsen with the required written engagement letter when it first started representing him. Martinsen asked the court to grant him treble damages with interest as well as the fees and costs of his suit against Nelson Mullins.”

“Playboy fights fee bid in dispute with ex-lawyers at Quinn Emanuel” —

• “Playboy Enterprises and Quinn Emanuel are locked in a dispute over unpaid legal fees after Playboy accused the U.S. law firm of mishandling litigation and ignoring conflicts of interest while representing the adult entertainment company.”
• “Playboy sued the law firm in Los Angeles Superior Court last week, asking a judge to halt an arbitration proceeding in which Quinn Emanuel is seeking legal fees it claims it is owed by Playboy from litigation over its iconic ‘bunny’ logo.”
• “The clash over fees stems from Quinn Emanuel’s prior work for Playboy in a lawsuit that alleged sexual wellness company Advanced Vita Supplements infringed the company’s bunny trademarks. Playboy claims Quinn Emanuel improperly steered the company away from naming additional defendants in the case because they were clients of the firm.”
• “Playboy argued in its August 18 filing that the arbitration should be paused until after a trial that is scheduled for March 2027 in the trademark case. The resolution of the trial, Playboy said, could affect its claims against the law firm.”
• “Quinn Emanuel initiated an arbitration proceeding in March seeking to recover about $712,000 in unpaid fees for its work on the Advanced Vita Supplements case. It represented Playboy in the case until 2024, when the company fired the firm and hired lawyers from Frost.”
• “Playboy said it has already paid Quinn Emanuel more than $4.5 million and will show the firm ‘was massively overpaid for the work it actually performed.'”
• “Quinn Emanuel has denied any wrongdoing and argued that the fee arbitration is separate from Playboy’s conflict-of-interest claims and should proceed. The firm said in court filings that its fees and costs billed to Playboy were reasonable.”

“Detroit Ethics Board to investigate top city lawyer for side job at Lear” —

• “The Detroit Board of Ethics voted Wednesday, Aug. 19 to investigate whether top City Hall attorney Conrad Mallett violated the city’s ethics ordinance by serving as a paid director of Lear Corp., an auto supplier receiving city tax breaks.”
• “The investigation comes after the Free Press reported in August that Mallett received $1.8 million in cash and stock awards from Lear while holding top city government posts. The company opened a large plant near City Airport in 2022 and is receiving an approximately $4 million, 12-year tax abatement approved by the Detroit City Council in October that year.”
• “At the ethics board’s meeting, Executive Director Christal Phillips said Mallett has failed to respond to recent requests from ethics board staff to disclose his position at Lear.”
• “The meeting also produced a new allegation: Phillips said Mallett never disclosed that his son had applied for or accepted a job with the city of Detroit, in potential violation of an ethics ordinance provision requiring officials exercising significant authority to identify immediate family members employed by the city ‘or making an application to the city for employment.'”
• “Board members also voiced concern that Mallett’s position as corporation counsel – where he helms the city’s Law Department – could complicate the investigation. The Board of Ethics relies on Law Department attorneys for legal advice, but those attorneys report to Mallett.”
• “‘We’re going to poke a bear,’ board member Raymond Card said, of going after a top city official appointed by the mayor with city council approval. ‘And we’ve got to get a clear path, because I’m a firm believer – I only trap things I can kill.'”
• “In a statement issued to the Free Press after the board’s meeting, Mallett said, ‘I will address BOE concerns about its disclosure process when I have an opportunity to speak to it during the course of their investigation. I am confident that I have operated in an ethical and transparent manner and that if there were any oversights, they were unintentional.'”
• “Mallett previously told the Free Press that he disclosed his Lear board position to former Mayor Mike Duggan and Mayor Mary Sheffield. He said he was not involved in the Lear plant deal in either of his roles with the city or the company.”
• “Detroit’s ethics ordinance bars public servants who exercise ‘significant authority’ from taking a loan or payment from individuals receiving city tax abatements, credits or exemptions. The Board of Ethics has previously determined that city employees may not accept compensation for board service from entities receiving city tax breaks or doing business with the city.”
• “Mallett has served on Lear’s board since 2002, and last year earned $335,000 in cash and stock awards, as first reported by the Free Press on June 1.”
• “Phillips said Mallett never disclosed his Lear income to the ethics board or in annual mayoral disclosures received by her office in 2024 and 2026. His 2026 mayoral disclosure, she said, indicated that he had no non-city employment income from 2025 through the date of the filing. On a separate question concerning board activities, Phillips said, Mallett listed ‘N/A.'”
• “Phillips said Mallett’s failure to respond to the board’s June 30, July 20 and July 30 requests also could amount to willful neglect of duty. A board investigator said that Mallett was among just 10 of 120 senior city employees who had not filed disclosure forms with the board this year.”
• “Ethics board investigations can result in public admonishments and, in extreme cases, referrals to law enforcement for possible criminal prosecution.”