Risk Update

Law Firm and Juridical DQs — Judicial Disqualification Clarity from New York, Posing Lawyer + Privilege DQ Debated

9th Circ. Won’t Undo Calif. Firm’s DQ For Privileged Info” —

  • “The Ninth Circuit has denied a request to reconsider its decision upholding the disqualification of a San Diego business litigation firm from a racketeering lawsuit due to the firm allegedly obtaining privileged information through a man who posed as a lawyer.”
  • “The lower court previously disqualified Mirch Law Firm from representing Seyed Zia Eddin Ahmadi Abhari, Donya Entertainment Inc. and Noureen Entertainment Inc. in the racketeering case in light of allegations that the firm obtained privileged information through Martin Reiner, who was posing as a lawyer representing the defendants in an earlier trademark infringement case.”
  • “According to court documents, Reiner went on to claim to be Mirch’s witness. Mirch denied receiving confidential information from Reiner, but the Ninth Circuit maintained in an unpublished opinion that ‘the district court’s weighing of the evidence is entitled to deference.’ The court also held that both an attorney’s presumed or actual acquisition of an adversary’s privileged information can warrant their disqualification.”
  • “When asking for an en banc rehearing, Mirch Law Firm said the court failed to address limits on attorney-client privilege and the doctrines of waiver and joint representation. The firm also argued that the court did not recognize its due process rights when faced with allegations of ethical violations.”
  • “The underlying racketeering case came about when the plaintiffs accused Victory Park Capital Advisors of scheming to “acquire worthless restaurant franchises and resell them through fronts at unconscionable prices induced by fabricated financial statements,” according to court documents.”

“[New York] Judicial Ethics Opinion 22-22 (B)” —

  • “A full-time judge, previously employed as an attorney in a not-for-profit labor union’s legal services office, and who upon retirement will be eligible for a pension and medical benefits through the union:
    • (1) is permanently disqualified in cases where the judge participated in any way as an attorney, whether in a personal or supervisory capacity;
    • (2) is disqualified for two years, subject to remittal, in cases involving the judge’s former clients; but
    • (3) is not otherwise disqualified from cases where a litigant is represented by the union, provided the judge can be fair and impartial.”
  • “We recently advised that a judge who “worked for an insurance company more than a decade ago and has a pension benefit associated with that company” maintains a financial connection to that employer, giving rise to a situation “in which the judge’s impartiality might reasonably be questioned” (Opinion 21-29). We reached this conclusion notwithstanding that, much like the present inquiry, the pension was “independently managed by an outside third party” and was “not in pay status” (id.). Relying on opinions involving judges who were previously employed with a private law firm, we said the judge is disqualified, subject to remittal, when the former employer appears as an insurer of a party in a lawsuit pending before the judge (see id., citing Opinions 18-118 and 04-42).”
  • “For completeness, we also note that the judge (1) is permanently disqualified in cases in which the judge participated in any way as an attorney, whether in a personal or supervisory capacity, and (2) is disqualified for two years, subject to remittal, in cases involving the judge’s former clients (see Opinion 20-73). With respect to the second point, we note that the attorney-client relationship between the judge and these former union member clients terminated when the judge ceased employment with the union and assumed full-time judicial office. Thus, as more than two years have elapsed since the judge’s former employment with the union, disqualification or disclosure in new matters involving these former clients is now left to the judge’s sole discretion.”