Risk Update

Ethical Wall Works — Firm Survives Lateral-driven Disqualification Attempt

Posted Dan Bressler

“White & Case Fends Off Effort to Oust It From YPF Pollution Litigation” —

  • “Law firm White & Case LLP will stay in charge of a $14 billion bankruptcy lawsuit against Argentina’s YPF SA, a judge said, rejecting complaints that a lawyer’s career move had undermined the state oil giant’s defense.”
  • “The ruling said YPF failed to show why White & Case should be ousted as counsel to the bankruptcy trust that has sued YPF in the litigation, which seeks to hold the Argentine oil company responsible for the costs of cleaning up New Jersey’s contaminated Passaic River. Judge Christopher Sontchi of the U.S. Bankruptcy Court in Wilmington, Del., issued the ruling Tuesday.”
  • “Judge Sontchi said White & Case had erected sufficient safeguards after hiring Jessica Lauria, a former top legal strategist to YPF, in October 2020. Ethical and law firm procedures will protect against disclosure of information that could be used against YPF, he found.”
  • “The dispute took a detour in December when YPF moved to disqualify White & Case, saying its star hire, Ms. Lauria, knew too much about YPF’s legal strategy, which she helped design. With so much at stake, YPF needed to force White & Case out of the litigation to guarantee its corporate confidences would be protected, YPF company lawyer Victor Hou said during arguments last week.”
  • “The company said she had met with top YPF leaders and was in possession of crucial confidential information that could be disclosed inadvertently. Her role was so important that the standard law firm screens used to avoid information leakage and conflicts wouldn’t be sufficient to guarantee its information wouldn’t get into the wrong hands, YPF argued.”
  • “Judge Sontchi disagreed, and found White & Case had followed proper procedures. Ms. Lauria’s marriage to Thomas Lauria, the global head of White & Case’s restructuring practice, isn’t relevant to the disqualification motion, the judge said.”

Curious about the underlying matter, I found: “The New Jersey Chemical Spill That Could Pollute U.S.-Argentine Relations“.