Risk Update

Lawyer Disqualification News — Defendant Defers on DQ, Firm Eludes DQ Demand

Developer Daibes will stick with lawyer despite potential conflict in Menendez case” —

  • “Fred Daibes, the North Jersey developer charged alongside U.S. Sen. Bob Menendez in an alleged bribery scheme, will keep his attorney in a separate bank fraud case, despite federal prosecutors warning of a legal conflict of interest.”
  • “Daibes is one of five people indicted in the alleged corruption scheme involving New Jersey’s senior senator and his wife, Nadine Arslanian Menendez. Daibes pleaded not guilty last month to charges related to the case, in which Menendez is accused of secretly acting as an agent for the Egyptian government.”
  • “At a hearing last month, a federal prosecutor said he believed Daibes’ attorney in the bank fraud case, Lawrence S. Lustberg of Gibbons P.C., faced a potential conflict because he also represents a defendant in the corruption case, Wael Hana. Hana, a halal meat exporter, is accused of bribing Menendez to win the senator’s help in getting favorable treatment from Egyptian officials.”
  • “At a Nov. 16 court hearing, however, Daibes said he will keep Lustberg as his attorney. Lustberg did not respond to messages for comment.The corruption indictment shed light on Menendez’s alleged interference with Daibes’ bank fraud charges, saying the senator recommended that President Joe Biden nominate a U.S. attorney he believed he could influence in Daibes’ favor.”
  • “‘Mr. Lustberg knows certain facts allegedly relevant to those charges,’ Vikas Khanna, first assistant U.S. attorney for the District of New Jersey, wrote in a letter to U.S. District Judge Susan D. Wigenton last month.”
  • “At the October hearing, the government requested that Daibes be made aware of the potential conflict of interest and, if it’s appropriate, sign a voluntary waiver to continue with Lustberg as his attorney.”
  • “At Hana’s arraignment in the corruption trial last month, U.S. District Judge Sidney Stein repeatedly asked Hana if he wanted new attorneys. That same day, Hana signed a waiver of any potential conflict of interest involving Lustberg’s representation of Daibes, according to court documents.”
  • “Stein noted that Lustberg could be called as a witness in the Menendez case. Hana said he was satisfied with Lustberg even after Stein reiterated that he would not be able to appeal on the grounds that Lustberg was conflicted.”

Allen Matkins Escapes DQ From Land Contamination Suit” —

  • “A California federal judge has rejected freight railway operator Union Pacific’s attempt to disqualify Allen Matkins Leck Gamble Mallory & Natsis LLP from its land contamination suit, ruling that there was no conflict of interest stemming from a previous environmental suit.”
  • “U.S. District Judge Beth Freeman of the Northern District of California said Wednesday that although former Allen Matkins partner James Meeder previously represented Union Pacific in a similar environmental suit and there was some evidence that could potentially disqualify the firm if it was proven that he shared confidential information with the defendants, the potential delay to proceedings along with evidence outweighing the railway operator’s was enough to avoid disqualification at this stage.”
  • “‘Where, as here, defendants have presented persuasive evidence to show that confidential information was not actually exchanged between Meeder and other attorneys at Allen Matkins, the need to maintain ethical standards and maintain public trust in the administration of justice and the integrity of the bar weigh less heavily in the court’s equitable analysis,’ Judge Freeman’s order said.”
  • “Union Pacific said in its September bid to have Allen Matkins disqualified that Meeder and partner David Cooke served as legal counsel for legacy company Southern Pacific in a pair of 1990s suits, one over an oil-contaminated property adjacent to a railroad and the other over the contamination of a former railyard site.”
  • “Because they represented one of its entities in similar litigation, Union Pacific argued, the attorneys shouldn’t be allowed to represent an opposing party due to the potential for confidential information acquired in those suits to be used against the company.”
  • “Union Pacific specifically asserted that Cooke shared confidential information he gained as counsel for a former Southern Pacific environmental manager, Mark Ransom, with his colleague Kamran Javandel, an Allen Matkins partner who represented the Hills.”
  • “Judge Freeman determined that the first suit wasn’t related closely enough to be considered a conflict of interest because it was a fraud suit alleging that Southern Pacific misrepresented the property’s pollution status when selling it, instead of a dispute over the contamination itself. The second suit was determined to be closely related as they both included allegations that the railway operator polluted the property with chemical solvents.”
  • “When it came to the involvement of the attorneys, Judge Freeman ruled that Cooke didn’t serve a big enough role in the 1990s contamination suit to create a conflict of interest, while Meeder, who retired as a full-time attorney a year before the suit was first filed, was unlikely to have enough opportunities to share confidential information due to his new status as a limited of counsel.”