“Federal Judge Rejects DQ Motion Against State’s Connell Foley Attorneys” —

• “A federal judge has rejected a motion to remove Connell Foley as legal counsel for several state officials, like New Jersey Gov. Phil Murphy and Attorney General Matthew Platkin, in a lawsuit alleging discrimination and racketeering.”
• “At the center of the dispute was Blueprint Capital Advisors’ (BCA) claim that a partner at Connell Foley, who currently represents the defendants, previously provided legal advice to a company principal, creating a conflict of interest. Connell Foley countered that it had proactively screened the attorney from the case out of an abundance of caution.”
• “However, U.S. Magistrate Judge Michael A. Hammer of the District of New Jersey firmly rejected BCA’s argument in an opinion issued Monday. Hammer held that the evidence offered by BCA amounted to ‘vague assertions’ and a ‘spattering of conversations’ that didn’t meet the legal standard for disqualification.”
• “‘BCA has not established an express attorney-client relationship,’ Hammer said. ‘BCA appears to concede as much, and focuses on the existence of an implied relationship.'”
• “In June 2020, BCA, a Black-owned asset management firm, filed a lawsuit in the U.S. District Court for the District of New Jersey against top state officials and others, alleging systemic racial discrimination and retaliation. The firm claims that New Jersey and its Division of Investment excluded it from managing state funds, misused its proprietary investment model, and collaborated with private entities to undermine its business prospects. The case is captioned Blueprint Capital Advisors v. State of New Jersey.”
• “‘At the core of this motion is whether Elnardo J. Webster II, who is now an attorney at Connell Foley, previously represented BCA or one of its principals, Jacob Walthour,’ Hammer said.”
• “‘Walthour claims that in 2016, Webster helped facilitate meetings with state officials, advised on strategic decisions, and provided legal counsel as BCA considered legal action against the state,’ Hammer said. ‘Webster, however, insists that he never gave legal advice, characterizing their conversation as a casual exchange in which Walthour asked if he knew anyone with political connections.'”
• “Walthour described past interactions, including emails and meetings going back to 2016, in which he allegedly sought legal advice from Webster.”
• “The court found that none of these contacts rose to the level of formal or implied legal representation. Notably, Hammer said, the only recorded phone call between the two that lasted longer than a minute occurred four years before the lawsuit was filed. Hammer also noted that Webster is primarily a real estate lawyer with limited litigation experience, making it unlikely he would be consulted for complex civil rights and securities claims in the present case.”

“Ninth Circuit Finds Pollution Exclusion Creates Conflict Requiring Independent Counsel” —

• “In L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., the Ninth Circuit, applying California law, affirmed in part the trial court’s grant of a policyholder’s motion for summary judgment on the duty to defend and obligation to provide independent counsel under a pollution exclusion. L.A. Terminals, Inc., et al. v. United Nat’l Ins. Co., No. 23-55483, 2025 WL 1024392, at *2 (9th Cir. Apr. 7, 2025).”
• “The insureds were sued for alleged environmental contamination from the operation of a marine terminal and chemical storage facility. The claimants alleged that hazardous materials leaked from storage tanks over a fifty-year period, and the insureds were negligent in storing the hazardous substances. The underlying complaint alleged that the contamination occurred ‘suddenly and accidentally, and over long periods of time.'”
• “The policyholders sought to access their CGL policies from 1982 through 1985, and the insurer issued a reservation of rights under Qualified Pollution Exclusions. The pollution exclusions included a sudden and accidental exception. The insured retained its preferred counsel to defend the underlying lawsuit, and the insurer refused to pay for the insureds’ choice of counsel. Instead, the insurer offered to appoint defense counsel.”
  “The Ninth Circuit’s opinion focuses on two major issues. First, as a threshold matter, whether the insurer had a duty to defend under the pollution exclusion. The court reasoned that the insured bore the burden to prove that the sudden and accidental exception to the pollution exclusion applied. The court noted that in California, ‘sudden refers to the pollution’s commencement and does not require that the polluting event terminate quickly or have only a brief duration[.]’ Id. at *1. The court found that the alleged contamination, which occurred over 50 years ago, could have been ‘sudden’ within the sudden and accidental exception to the pollution exclusion.”
• “Second, the court examined whether the pollution exclusion created a conflict of interest that required independent counsel for the insured. The court noted that ‘[a]lthough an insurer does not necessarily create a conflict merely by defending two parties seeking damages from each other in the same lawsuit, a conflict does exist where the insurer may be subject to substantial temptation to shape its defense to place the risk of loss entirely upon the insured, and independent counsel is necessary in those instances to protect the insured’s interests.’ Id. at *2. The court found a conflict of interest that necessitated independent counsel because ‘[t]he reservation of rights gave [the insurer] both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution.’ Id.”
• “The sudden and accidental exception is common to pollution exclusions. Policyholders should be familiar with the law applicable to their insurance policy and the arguments they can raise. Every state is different and requires a different analysis.”
  Policyholders often want to choose their own counsel, but insurers can be resistant to pay. Unsurprisingly, the policyholder’s choice of counsel is normally more expensive than the carrier’s choice. The creation of a conflict of interest through a reservation of rights is the first place to start when arguing that an insurer should pay for independent counsel. The arguments that the insurer should pay the full rate should focus more on the skill of the policyholder’s choice of defense counsel and desire to protect the insured’s tower. It can also be helpful to combine multiple insurers who are obligated to provide a defense to ‘add up’ to the rate of the policyholder’s choice of counsel.”
• “The reservation of rights gave United both the motive and opportunity to defend more vigorously against a liability theory based on sudden as opposed to gradual pollution. Strategizing in defending the case this way ‘would be to the financial advantage of’ United, creating a conflict and giving rise to a duty on United’s part to provide independent counsel.”

“Willkie Loses Longest-Serving Lawyer Over Trump Surrender” —

• ‘”Joseph Baio worked at Willkie Farr for 47 years. As a partner, he’d served on the firm’s executive committee. Most recently, the dean of the firm’s lawyers worked as a senior counsel. It takes a lot to make someone leave the firm they’ve worked with — and at times helped lead — for almost half a century. But Willkie Farr managed to find a way to alienate its longest-serving attorney when it turned coward and agreed to give Trump $100 million in pro bono legal services and somehow even more in dignity.”
• “Baio informed the current executive committee that he was leaving to ‘join the fight against governmental tyranny, unconstitutional decrees and social injustice, particularly at this critical time,’ a statement that deserves a swelling orchestral accompaniment befitting the end of a courtroom drama. It’s also a succinct acknowledgement of a lawyer’s ethical responsibilities that seems lost on some Biglaw firms right now.”
• “While a number of associates have publicly broke ties over the settlements and some law students are already telling firms in the ‘Order of the Obsequious’ that they are turning their backs on recruiting efforts, Baio is the most senior lawyer to depart a firm over a settlement. He is unlikely to be the last.”
• “Baio’s position as counsel affords him more flexibility than many partners, who cannot bolt on a dime and have to negotiate smooth transitions for their books of business at other firms. But Above the Law is already aware of corporate clients informing surrendering firms that they will take their business elsewhere in light of the concessions, seeing the deals as confirmation that the firms are incapable of standing up for themselves let alone their clients. When clients start threatening to walk in search of firms with backbone — or at least no drama — the partners will start trying to figure out how to move with them.”