Risk Update

DQ News & More — New Lawyer Hire Creates Conflict, Conflict Allegation Sanction Bid Beaten

New hire forces law firm’s disqualification” —

  • “A law firm could not avoid disqualification by screening a newly hired associate from a client matter in which she had a conflict of interest, the New Mexico Supreme Court has ruled in reversing judgment.”
  • “The firm represented a defendant in a long-running real estate dispute. During the course of the litigation, the firm hired an associate who had actively represented the plaintiff in the case during previous employment.”
  • “The plaintiff moved to disqualify the firm, contending that the associate’s conflict of interest was imputed to the firm.”
    “The court agreed, rejecting the firm’s contention that disqualification was unnecessary because it had screening procedures in place that kept the associate segregated from the real estate litigation and protected confidential information.”
  • “The court held that ‘when an attorney has played a substantial role on one side of a lawsuit and subsequently joins a law firm on the opposing side of that lawsuit, both the lawyer and the new firm are disqualified from any further representation, absent informed consent of the former client. We also specifically conclude under the same rule that screening the new attorney from any involvement in the lawsuit is not an adequate response to the conflict.'”

Trump fundraiser loses bid to sanction Gibson Dunn in Qatar hacking case” —

  • “A U.S. judge on Wednesday denied a motion by former Donald Trump fundraiser Elliott Broidy to sanction law firm Gibson, Dunn & Crutcher over allegations that one of its lawyers had a conflict of interest in defending a man accused of hacking Broidy’s emails.”
  • “Gibson Dunn in August 2022 withdrew from the defense of former CIA officer Kevin Chalker and his company Global Risk Advisors in a 2019 lawsuit brought in Manhattan federal court by Broidy, who raised money for Trump and accused Chalker of hacking his emails on behalf of Qatar.”
  • “Broidy had accused a Gibson Dunn partner on Chalker’s defense team, former Department of Justice lawyer Zainab Ahmad, of having a conflict because she investigated the alleged hacking while working for Special Counsel Robert Mueller, whose office probed Russia’s interference in the 2016 U.S. election.”
  • “The firm denied it had a conflict and said it withdrew when Chalker decided to hire a different firm for business reasons. Ahmad said in a sworn declaration in March that she was never involved in any investigation into Broidy and never learned any confidential information relevant to the case.”
  • “Vyskocil wrote that the legal basis for disqualifying a lawyer was high, and that the plaintiffs did not prove Gibson Dunn acted in bad faith. She said evidence suggested that the firm ‘had a good faith basis to believe that Ms. Ahmad did not have a conflict of interest.'”