Risk Update

Law Firm Risk News — ABA Endorses AML Updates + Supreme Court Ethics, Freivogel Findings

Posted Dan Bressler

“ABA House adopts host of new policies, including support for ethics code for U.S. Supreme Court” —

  • “In wrapping up its ABA 2023 Midyear Meeting, the American Bar Association’s House of Delegates approved today first-time policies endorsing ‘reasonable and appropriate’ federal government efforts aimed at combating money laundering as well as a code of judicial ethics binding on justices of the U.S. Supreme Court.”
  • “Resolution 400, which was a late proposal, urges the Supreme Court to adopt a code of judicial ethics binding on its justices that is comparable to the code of conduct for other U.S. judges adopted by the Judicial Conference of the United States. Advocates of the change say the absence of a clearly articulated, binding code of ethics for members of the highest court in the country imperils the legitimacy of the court as well as the judicial system.”
  • “‘It’s high time to set (a code of conduct),’ said Stephen Saltzburg, a law professor and former U.S. Justice Department official. ‘The Supreme Court should have a code of ethics. Exclamation point. The end.'”
  • “The new anti-money laundering policy seeks to balance the longstanding attorney-client privilege with the demands of governmental entities seeking access to information on criminal activities, such as money laundering, terrorism financing, human trafficking and other corrupt conduct. It follows a lengthy review by the ABA Working Group on Beneficial Ownership, and recognizes efforts by Congress, which has passed legislation to combat criminal activity. A recent law, for example, requires certain business entities to file, in the absence of an exemption, information on their beneficial owners with the Financial Crimes Enforcement Network of the U.S. Department of Treasury.”
  • “A beneficial owner is a person who enjoys the benefits of ownership although an asset’s title is listed in another name. Under federal financial regulations, a beneficial owner is anyone with more than 25% ownership of a legal entity, or anyone who controls the legal entity.”
  • “The new policy urges that any governmental disclosure requirements protect constitutional rights and confidentiality interests, and not conflict with the ethical duties, professional conduct requirements and regulations imposed on the legal profession by other governmental entities. It also says these requirements should ‘not undermine the applicable rules of professional conduct to which lawyers are subject.'”

As always, thank you Bill Freivogel:

  • Hong v. Hong, 2023 ABCA 33 (CanLII) (Alb. Ct. App. Feb. 1, 2023).
    • “This case is a dispute among family members over ownership and/or possession of certain real estate. Plaintiff moved to disqualify Law Firm for Defendants. Law Firm had earlier represented Plaintiff jointly with certain of Defendants in an appeal to the Tax Court of Canada.”
    • “The trial court held that the issues in the tax appeal were sufficiently related to the issues in this case to justify disqualification. In this opinion the appellate court rejected that finding, noting that whatever of Plaintiff’s confidences were disclosed to Law Firm in the tax appeal would also have been known to certain Defendants due to their family relationship with Plaintiff. However, the appellate court did uphold disqualification of Law Firm because the need for one of its members to testify was ‘highly likely.'”
  • Reid v. Samsung SDI Co., Ltd., 2023 WL 1096333 (Ga. App. Jan. 30, 2023).
    • “A Samsung SDI lithium-ion 18650 battery exploded in Plaintiff’s pocket. Plaintiff, represented by Lawyer, is suing Samsung SDI for Plaintiff’s injuries. Samsung moved to disqualify Lawyer because Lawyer had for a number of years worked in-house for the insurance company (“Insco”) that insured Samsung SDI for product liability. (The name Samsung appears in Insco’s name, but the court does not explain that coincidence.)”
    • “In Lawyer’s Insco role Lawyer supervised, or otherwise handled, many cases against Samsung SDI, including cases involving the 18650 battery. The very fact-specific opinion contains way more information about how Lawyer interacted with Samsung SDI lawyers. We will leave it at that. In this opinion the appellate court affirmed the trial court’s order disqualifying Lawyer.”
    • “The opinion does three things. First, the court found that Lawyer’s role at Insco was tantamount to representation of Samsung, thus triggering Rule 1.9. Second, the court found that the earlier work at Insco was substantially related to this case. Last, while not mentioning it by name, the court seemed to be applying the ‘playbook doctrine’ emphasizing Lawyer’s familiarity with 18650 battery litigation and with Samsung SDI’s personnel and procedures.”
  • Veloz v. Jiddou, 2023 NY Slip Op 00292 (N.Y. App. Div. 1st Dept. Jan. 24, 2023).
    • “Plaintiff was driving an auto, and her young daughter was a passenger. They were allegedly rear-ended, and both, represented by Lawyer, sued the driver of the other vehicle. The defendant counterclaimed that the accident was the fault of the plaintiff/driver. The trial court disqualified Lawyer from representing both plaintiffs. In this opinion the appellate court noted that the plaintiffs did not appeal the disqualification and said ‘plaintiffs have been advised to retain new and separate counsel.'”