Risk Update

DQ News — Evidence Evidently Integral to Law Firm Disqualification Bid, Positional Pronoun Conflict Allegation, State AG Accused of Tobacco Conflict

Federal Judge’s Recusal Sought in Transgender Sports Case” —

  • “A Colorado federal judge is being asked to recuse himself from a case regarding a collegiate athletic conference’s policy for transgender athletes over procedures that he adopted for the use of preferred pronouns in his courtroom.”
  • “US District Judge Kato Crews adopted practice standards in December that say attorneys are ‘invited and encouraged to identify the applicable pronouns of counsel, litigants, and witnesses at the earliest juncture possible.'”
  • “Outlined in the ‘Uniform Civil Practice Standards,’ if someone uses the wrong pronoun, lawyers are encouraged to ‘bring that to the Court’s attention at the time, or through a subsequent email to Chambers.'”
  • “Lawyers leading the challenge against the Mountain West Conference’s transgender participation policy argue that the civil practice standards restrict the speech of plaintiffs and their lawyers, and also demonstrates potential bias on the topics at issue in the case.”
  • “‘An impartial forum cannot exist where the Court has so forcefully signaled the Courts’ personal views on sex and gender identity that the Court is willing to use its contempt power to enforce those views,’ the lawyers say in the motion.”
  • “Crews, an appointee of President Joe Biden who began service in 2024, is one of six judges on the Denver-based federal trial court who’ve adopted similar practice standards. The motion calls for Crews to both step back from the case and for the standards to be scrapped.”

NAFTA Case Useful In Bid To DQ Quinn Emanuel, Judge Says” —

  • “A Florida federal judge has ruled that a Mexican oil company can use information on dismissed NAFTA arbitration and other documents in a bid to disqualify former counsel Quinn Emanuel, saying the evidence is relevant to underlying litigation over alleged funds transfers.”
  • “In an order filed Thursday in the Southern District of Florida, U.S. Magistrate Judge Enjoliqué Lett granted a motion allowing Oro Negro Drilling Pte. Ltd. and various Singapore-based subsidiaries to supplement the record with three pieces of evidence. The companies are seeking to disqualify Quinn Emanuel Urquhart & Sullivan LLP from representing itself as they try to get the firm to hand over information in Mexican proceedings over the alleged improper diversion of at least $27 million.”
  • “Judge Lett allowed Oro Negro to supplement the record with documents relating to a New York state court disqualification order, bank statements and a final award in North American Free Trade Agreement arbitration. The oil company brought a Section 1782 application in Florida federal court in May seeking discovery to use in separate but related bankruptcy and criminal cases in Mexico.”
  • “Oro Negro’s Section 1782 application stems from 2021, when Quinn Emanuel represented the oil company in New York federal bankruptcy court. The law firm brought an adversary proceeding on behalf of Oro Negro and its subsidiaries, alleging unjust enrichment by the bondholders of one of the oil company’s projects.”
  • “The application is an effort by Oro Negro to gather evidence of an alleged improper diversion of at least $27 million that should have remained in its accounts or in a bankruptcy estate in Mexico to benefit creditors. Gonzalo Gil White, the former CEO of Oro Negro’s parent company, is accused of improperly placing it into bankruptcy and also paying Quinn Emanuel $8.4 million to fund litigation against the bondholders.”
  • “In December, Oro Negro filed a motion seeking permission to introduce the three categories of documents, arguing that Quinn Emanuel faces a conflict of interest in the Florida case.”
  • “In a July 2024 motion to expedite discovery and disqualify Quinn Emanuel brought by Oro Negro, the company argued that the law firm is the sole possessor of records relating to its prior representation following a change in leadership at the oil drilling company.”
  • “Quinn Emanuel responded to Oro Negro’s December motion in January, saying the records that the oil company wanted to introduce are irrelevant, duplicative and unrelated.”
  • “The firm argued that a New York state court disqualification order due to its client relationship with a financial adviser to Oro Negro’s bondholders is irrelevant because the oil company wasn’t a party to that action. The bank statements showing an alleged $19 million improper transfer from a Mexican bank account are duplicative because Oro Negro already submitted them with its 1782 application, according to Quinn Emanuel. The firm also said a 134-page decision in the NAFTA arbitration decision is unrelated because the decision was based on jurisdictional grounds that have nothing to do with the application.”
  • “But Judge Lett rejected Quinn Emanuel’s arguments, saying in her order that ‘a complete and comprehensive record should be before the court.'”
  • “Judge Lett said the New York disqualification order ‘evinces a similar conflict of interest issue’ at the heart of Oro Negro’s request to take expedited discovery and its own disqualification motion, while the bank statements ‘provide evidence of petitioners’ contention’ that Quinn Emanuel improperly received $19 million and that the NAFTA arbitration dismissal decision ‘support[s] petitioners’ averments’ that the alleged improperly transferred money funded meritless litigation.”

Hamilton lawmaker files suit against ‘Big Tobacco’ for flouting law” —

  • “A Montana lawmaker who is also a vape store owner has filed a lawsuit in federal court against large tobacco companies for what he believes are illegal lobbying activities that violate a settlement agreement while forcing their vaping products onto shelves.”
  • “Rep. Ron Marshall, R-Hamilton, in a lawsuit filed Wednesday, said that big tobacco lobbyists from some of the largest American companies like Altria Group and R.J. Reynolds Tobacco Company, are working against laws that would restrict vaping products for youth, while simultaneously using a Food and Drug Administration process to make only their products available to vape shop retailers.”
  • “The lawsuit also accuses Montana Attorney General Austin Knudsen of failing to enforce Montana laws against the same tobacco companies because of donations those companies made to him during the 2024 election cycle and after. Marshall is suing under the ‘private attorney general doctrine,’ which, if the lawsuit is successful, allow him to collect attorney fees for the lawsuit.”
  • “Marshall’s lawsuit says that, as part of the 1998 Tobacco Master Settlement Agreement in which Montana participated, the tobacco companies being sued are prohibited from certain lobbying and marketing activities, especially those which target youth.”
  • “Marshall claims that lobbyist Mark Baker, acting on behalf of Altria and NJOY, as well as Edward Redding, lobbying for Reynolds and Reynolds Vapor, have lobbied members of the Legislature against his bill, which survived committee on a 11-9 vote along party lines, only to see it stall on the floor of the Montana House of Representatives. The bill has been on the floor since Jan. 28.”
  • “Marshall said in his lawsuit that two ‘big tobacco’ lobbyists are instead trying to stall his legislation while advocating for an FDA registry law in Montana that would make it so that only vaping products endorsed by the Food and Drug Administration could be sold in Montana.”
  • “‘Knudsen has an inextricable conflict of interest by virtue of the fact that both Altria and Reynolds were ‘platinum’ sponsors of his Jan. 11, 2025 inauguration party,’ the lawsuit stated. ‘Further, Attorney General Knudsen provided a Jan. 28, 2025 op-ed in the Montana Newsroom media publication, similar to those authored by other state attorneys general after lobbying from Altria and Reynolds, which evidences an abdication of his duties to enforce the portions of the Master Settlement Agreement.'”