Risk Update

Law Firm Conflicts — Clashes in the News, Information Flow, Standing and Tactical Disqualification Debate

Bill Freivogel notes recent decisions:

 L.D. v. Seymour, No. 8:20-CV-1203 (N.D.N.Y. Jan. 3, 2022).

  • “Plaintiff appears to be suing several local government entities arising out of an alleged sexual assault by an individual defendant (‘Seymour’). Law Firm represents one of the entities (‘County Services’), which evidently was Seymour’s employer. Plaintiff moved to disqualify Law Firm in this case because some twenty-five years earlier Law Firm had represented Plaintiff in ‘a matrimonial action.'”
  • “In this opinion the magistrate judge denied the motion. Lawyers who represented Plaintiff in the matrimonial action (‘Team One’) are still with Law Firm, but they are not the lawyers (‘Team Two’) working on this case.”
  • “On balance, the magistrate judge seemed to feel that the information, if any, that might flow from Team One to Team Two, would not prejudice Plaintiff in this case. The court alludes to the New York Rules of Professional Conduct, screening, the substantial relationship test, notions of confidentiality, etc. It cites a potpourri of New York federal court cases, many of questionable relevance here, and most of which predate New York’s adoption of the Rules.”

Diagnostic Affiliates of N.E. Hou, LLC v. United Health Grp., Inc., No. 2:21-CV-00131 (S.D. Tex. Jan. 18, 2022).

  • “Plaintiff seeks to recover ‘payments for COVID-19 testing and related services’ from three groups of defendants, totaling dozens of entities. Law Firm seeks to represent all the defendants. Plaintiff moved to disqualify Law Firm because of conflicts among the defendants. Standing is an issue.”
  • “In this opinion the court followed those authorities that recognized the right, in some instances, of parties to raise conflicts of law firms that never represented the moving parties. However, the court found that, on balance, the possible conflicts here were not substantial enough, or real enough, (our characterizations) to interfere with the defendants’ right, as a matter of strategy, to continue with one law firm.”
  • “[Our note: The relationships among the defendants are not clear to us from the opinion, so we are unable to articulate why the conflicts are not substantial enough, or real enough to justify disqualification.]”

Bid To DQ BB&K Is ’11th Hour Litigation Tactic,’ City Says”

  • “A California city that sits on an island off the coast of Los Angeles fought efforts to disqualify its counsel from litigation over contamination on school property, urging the court to reject the ‘eleventh-hour litigation tactic’ because it was no secret that Best Best & Krieger LLP advised the local school district years ago.”
  • “The city of Avalon and its attorneys from BB&K told the court Monday that the Long Beach Unified School District’s motion to disqualify is out of turn and uncalled-for. The city told the court that the school district has always been aware that BB&K attorneys — one of whom left the firm well over a decade ago — represented the district in an ‘exceedingly limited scope’ regarding contamination at the Avalon School.”
  • “The district’s claims that it only recently became aware of the apparent conflict are not true, the city argued, saying ‘the district has known every fact it now alleges in support of its motion since 2012.'”
  • “The city argued the district cannot now use information it has been sitting on to seek disqualification, saying the prior representation does not pose a conflict of interest, but even if it did, precedent dictates that litigants can’t hold off on seeking disqualification until it is convenient for them. The city called the district’s disqualification bid ‘a litigation tactic aimed at depriving the city of its chosen attorneys who have been successful in this litigation,’ which should be denied.”
  • “In its disqualification motion, the school district further argued that the timeliness issues central to the court’s ruling in August were directly related to the law firm’s past work advising the school district. The district argued the law firm ‘injuriously affected its former client’ since it successfully argued many of the district’s claims were time-barred.”