“‘Four Days Was Enough’ How Filing the Wrong Answer Cost a Law Firm Its Entire Case” —

• “In workers’ compensation litigation, attorneys often move fast. Claims get filed, coverage is investigated, and answers get submitted before all the facts are in. But a new unpublished decision from the New Jersey Appellate Division delivers a stark reminder: moving fast does not excuse moving incorrectly — especially when an ethical duty to a client is on the line.”
• “The case arose from a professional employer organization (PEO) arrangement. Prop N Spoon, a restaurant employer, contracted with Paychex — a national PEO — to administer its HR functions, including workers’ compensation coverage. When employee Johann Mejia Arboleda filed a workers’ compensation claim petition in October 2024, alleging a work-related injury, Prop N Spoon tendered the claim to Paychex. American Zurich Insurance, Paychex’s insurer, assigned Goldberg Segalla LLP as defense counsel.”
• “Here is where things went sideways. The Four-Day Representation”
• “On October 31, 2024, Goldberg Segalla filed a verified answer on behalf of Prop N Spoon. The answer was substantive: it disputed the nature, extent, and causation of Arboleda’s claimed disability; requested his treatment records; reserved all defenses; and preserved the right to cross-examine witnesses and present expert testimony. Nothing in the filing reserved rights or flagged a future conflict. To the court and all others, Goldberg Segalla was Prop N Spoon’s lawyer.”
• “Four days later, on November 4, 2024, Goldberg Segalla filed an amended answer. This time, it entered a special appearance on behalf of Paychex, stated it did not represent Prop N Spoon, and denied coverage of the claim entirely. Shortly thereafter, it moved to dismiss the claim against Paychex, asserting that Prop N Spoon had concealed Arboleda’s employment and thereby forfeited workers’ compensation coverage.”
• “In a span of four days, the firm had gone from defending Prop N Spoon to attacking it.”
• “Prop N Spoon, now forced to hire its own attorney, moved to disqualify Goldberg Segalla under RPC 1.9(a)—New Jersey’s former-client conflict-of-interest rule. That rule prohibits a lawyer who has represented a client from later representing another party in the same matter whose interests are materially adverse to the former client, absent written informed consent.”
• “Goldberg Segalla opposed the motion with a creative argument: there was no attorney-client relationship with Prop N Spoon because the firm never intended to represent it, never provided legal advice, never exchanged confidential information, and — critically — the electronic court filing system left them no choice but to list Prop N Spoon as the client when submitting the initial answer. The firm characterized the filing as a ‘preliminary’ step in the investigative process and emphasized that no substantive proceedings occurred during the four-day window.”
• “The compensation judge was unpersuaded. On May 1, 2025, he disqualified the firm and ordered Zurich and Paychex to retain new counsel. After reconsideration was denied on July 7, 2025, Paychex appealed.”
• “The Appellate Division affirmed, and its reasoning is worth understanding carefully.”
• “The court applied de novo review to the legal question of disqualification under RPC 1.9(a) — meaning it gave no deference to the compensation judge’s legal conclusions and reviewed the rule fresh. That standard actually cut against Goldberg Segalla; the court found the answer just as obvious as the judge did.”
• “The court’s analysis rested on the plain text of RPC 1.9(a). The rule does not ask whether confidential information was exchanged. It does not ask whether the prior representation caused harm. It does not carve out exceptions for brief or unintentional representations. It asks one question: Did the lawyer represent the client in the matter? If yes, and if the current client’s interests are materially adverse to those of the former client, disqualification follows unless there is written, informed consent.”
• “Filing a verified answer on Prop N Spoon’s behalf — one that actively defended the company against Arboleda’s claims — was, in the court’s view, representation. Full stop. The firm undertook Prop N Spoon’s defense. That it did so for only four days before pivoting did not change the analysis; it only underscored how egregious the conflict was.”
• “The court also rejected the ‘no harm, no foul’ framing directly and pointedly: ‘We decline to engraft a ‘no harm-no foul’ standard onto the Rules of Professional Conduct, particularly where, as here, a duty to a client is implicated.’ The Rules of Professional Conduct exist precisely to protect parties who may not even know they are being harmed — and the court refused to let efficiency or industry custom dilute that protection.”
• “As for the defense of the electronic filing system, the court was dismissive. The judge below had already noted the firm could have filed the answer manually from the outset. The Appellate Division agreed: the technology argument did not excuse the ethical lapse. A systemic workaround was available, and the firm did not use it.”
• “Mejia Arboleda v. Paychex is a cautionary tale about the collision of administrative convenience and professional responsibility. The court’s message is unambiguous: the ethics rules are not suggestions, and representing a party — even briefly, even accidentally, even without exchanging a single word of legal advice — carries binding consequences. In workers’ compensation PEO litigation, where the lines of coverage and representation can blur quickly, getting the client identification right from the very first filing is not a technicality. It is an ethical obligation with real teeth.”
• Decision: “Mejia Arboleda v. Paychex & Prop N Spoon, A-0085-25 (N.J. App. Div. Feb. 25, 2026)“

David Kluft asks: “Can I use an AI chatbot for legal marketing and client intake?” —

• “The OR bar has issued an opinion giving ‘qualified’ approval to attorneys’ use of AI chatbots in connection with marketing and intake.”
• “The qualifications include (1) per Rule 1.1, the lawyer must be technically competent with regard to the technology and vendors; (2) per Rule 1.6 and 1.18, the lawyer must protect the confidentiality of information by arranging for it to be encrypted and stored properly; (3) per Rule 5.3, the lawyer must make reasonable efforts to supervise any third party providers who run the chatbot; and (4) per Rule 7.1, lawyers are responsible if the chatbot misleads clients or prospective clients.”
• “In addition, lawyers should be aware that a chatbot’s interaction with a client could inadvertently create an attorney client relationship, so they need to include the appropriate disclaimers and ALSO monitor the chatbot’s interactions with prospective clients to make sure (a) that the interaction did not give the prospective client a reasonable belief that there was an attorney client relationship when that is not what the attorney intends; (b) that the interaction did not trigger a duty of diligence to meet certain case deadlines; and (c) that the interaction did not trigger a duty notify the prospective client that in fact no attorney-client relationship exists.”
• Opinion: Here.

For those noting last week’s Patent examiner conflict story, we now have a response from Director John Squires:

• “…I am directing any Patents employee who participates in deciding the scope of patent rights to affirmatively recuse themselves from examining any application where they hold stock or bonds (publicly traded or privately held) in any of the listed applicants, regardless of the dollar value-rather than the current $15,000 threshold.”
• “Patents employees who participate in deciding the scope of patent rights include patent examiners (inclusive of patent reexamination specialists) and their supervisors when the supervisor is signing or otherwise reviewing (e.g., a streamlined review) an Office action.”
• “This guidance does not alter or amend the application of existing ethical standards to patent examiners or their supervisors. It does not require patent examiners or their supervisors to divest any financial interests (e.g., stocks or bonds), nor does it prohibit them from holding any financial interests.”
• “Let me be clear: nothing in this memorandum is intended to imply or suggest that patent examiners or their supervisors, in any past or pending cases, have been anything but fair, impartial, and acted in good faith. USPTO’s patent examiners are committed to avoiding even an appearance of impropriety, and have pledged not to othe1wise violate any obligations under existing federal ethics regulations and laws.”
• “To ensure that patent examiners, their supervisors, and Patents management are able to make fully informed decisions in examining patent applications, I am herewith requesting that patent examiners, as part of their existing conflict check procedures, voluntarily inform their supervisors of any companies in which they know that they, their spouse, or their minor children own stocks or bonds, regardless of the dollar value of such stocks or bonds. Supervisors of examiners should likewise inform their Technology Center Directors of such information.”
• “I am further directing that if a patent examiner or supervisor later becomes aware-after a case has been docketed or submitted to them-that the examiner or supervisor, or the examiner’s or supervisor’s spouse or minor children, owns any amount of stock or bonds in the applicant, the examiner or supervisor request that the application be reassigned. Patents management shall provide further guidance about the implementation of this memorandum.
  This guidance goes into effect immediately, and will remain in full force and effect until fmther notice.”