Risk Update

Conflicts News — Fake Electors (Real Conflicts), Freivogel Findings (Insurance Screen & DQ, Bankruptcy Conflict/Fee Contention)

Judge: GOP head can’t share lawyers with other fake electors” —

  • “The chairman of the Georgia Republican Party cannot share lawyers with 10 other fake electors in matters related to a special grand jury investigation into possible illegal meddling in the 2020 election in the state, a judge ruled Wednesday.”
  • “[Fulton County District Attorney] Willis has made clear that she is interested in the actions of 16 Republicans who signed a certificate declaring falsely that Trump had won and also declaring themselves the state’s ‘duly elected and qualified’ electors. Willis has said in a court filing that she notified lawyers for those 16 people that they are targets of her investigation, meaning they could face criminal charges.”
  • “Eleven of those fake electors, including Georgia Republican Party Chairman David Shafer, are represented by two lawyers paid by the party, Holly Pierson and Kimberly Debrow. Willis’ team in October filed a motion seeking to disqualify the two from representing all of those clients, citing a conflict of interest.”
  • “Pierson and Debrow countered that none of their clients have committed any crimes or know of any crimes committed by the others. The district attorney’s ‘assumption that the jointly represented nominee electors can ‘flip’ on each other or otherwise provide incriminating information as to any other jointly represented elector is simply inaccurate, as well as legally insufficient,’ they argued.”
  • “They also noted their clients have signed waivers attesting that they understand the implications of joint representation.”
  • “Fulton County Superior Court Judge Robert McBurney, who’s overseeing the special grand jury, wrote in his order Wednesday that ‘the best waiver in the world cannot fix a non-waivable conflict’ but said he finds ‘very few such conflicts’ at this phase of the investigation.”
  • “McBurney noted that if charges are brought against any of the fake electors, one of them could be called to testify against another at trial. At that point, the judge noted, Pierson and Debrow likely could not represent either one.”
  • “Shafer, however, is an exception because of his role in establishing and convening the slate of fake electors, his ‘communications with other key players’ in the investigation and ‘his role in other post-election efforts to call into question the validity’ of Georgia’s election results, McBurney wrote.”
  • “This ‘imbalance in exposure’ to the investigation “makes it impractical and arguably unethical” for Pierson and Debrow to continue to represent all 11 of their clients, McBurney wrote. The pair of lawyers may represent Shafer or the other 10, but not both, he concluded.”

And the latest from the eagle-eyed Bill Freivogel:

  • Seaman Corp. v. Zurich Am. Ins. Co., 2022 WL 17251819 (N.D. Ohio Nov. 28, 2022).
    • “In another case Target sued Seaman for selling defective roofing membranes. In this case Seaman is suing Zurich over insurance coverage for the Target case.”
    • “While at Firm 1 Lawyer was on a team of lawyers defending Seaman against Target. Lawyer left Firm 1 and joined Firm 2. Firm 2 is defending Zurich against Seaman in this coverage case. Firm 2 screened Lawyer from this case. Nevertheless, Seaman moved to disqualify Firm 2.”
    • “In this opinion the magistrate judge granted the motion. First, the court found that this case arises out of the ‘same matter’ as the Target case. Second, the court found that Lawyer had “substantial responsibility” in the Target case. Thus, under Ohio’s Rules 1.10(c) and (d), Firm 2’s screen would not work. These findings were in the face of Lawyer’s attempting to minimize her status and role on the team representing Seaman in the Target case.”
  • Avco Corp. v. Turner, No. 2:20-cv-04073-JDW (E.D. Pa. Nov. 28, 2022).
    • “Lawyer formerly represented Avco in product liability cases involving piston engines. A plaintiff in such a case hired Lawyer for the limited purpose of responding to manufacturers’ Daubert motions (“the Torres case”). Avco had been a defendant in the Torres case, but was dismissed. The plaintiff has been trying to drag Avco back into that case.”
    • ” In this case Avco sued Lawyer for damages. After an appeal the only issue here is whether Lawyer had breached her fiduciary duty to Avco and whether Lawyer should disgorge fees earned from Avco. In this opinion the court granted Lawyer summary judgment. The court held that Avco had failed completely to show how Lawyer was using information against Avco in the Torres case that Lawyer had obtained while representing Avco.”
  • In re Easterday Ranches, Inc., 2022 WL 17184713 (E.D. Wash. Nov. 23, 2022).
    • “Chapter 11. Two debtors, a corporation, and a partnership. Both debtors are owned by members of the Easterday family. This proceeding is the result of a massive fraud by owners and the president of the corporation, involving more than $244 million. Law Firm has served as debtors’ counsel for both entities. Ultimately, a plan was negotiated and approved.”
    • “The U.S. Trustee’s objected to Law Firm’s fee request, claiming that Law Firm had an unacceptable conflict of interest. The bankruptcy judge approved the fee request over Trustee’s objection. Needless to say, the corporation and partnership had obligations and rights relative to each other as well as to creditors.”
    • ” The opinion discusses at length the role of debtor’s counsel and the application of the Bankruptcy Act. On balance, the judge concluded that Law Firm did not have an actual conflict of interest, did the best it could, and best served the interests of all concerned. The court said Law Firm probably saved the estate years of costly litigation.”