Risk Update

Non Conflicts Updates — Non-conflict Concern Causes Change in Transaction Counsel, Political Party Affiliation Not Enough to DQ Judge

Riverhead IDA’s law firm, representing companies suing Triple Five affiliate, says company is ‘sham vehicle’ used by principals to dodge liability” —

  • “Nixon Peabody, legal counsel to the Riverhead Industrial Development Agency, has in federal court filings accused Nader Ghermezian and other members of the Ghermezian family of operating Triple Five Worldwide LLC as a ‘sham vehicle’ to shield themselves from personal liability.”
  • “While Nixon Peabody is the Riverhead IDA’s retained counsel for general matters, in September, the IDA hired Nixon Peabody to act as ‘transaction counsel’ in the agency’s review and vetting of Calverton Aviation & Technology LLC, ‘a single-purpose entity’ affiliated with Triple Five Group that is in contract to buy 1,644 acres of industrial land inside the Calverton Enterprise Park from the Town of Riverhead for $40 million.”
  • “Last month, the IDA reversed itself and replaced Nixon Peabody as transaction counsel for the CAT application with a new firm, Phillips Lytle. That move followed a RiverheadLOCAL report in October that Nixon Peabody had previously represented another Triple Five affiliate in connection with the American Dream mall in East Rutherford, New Jersey.”
  • “IDA board member Lori Ann Pipczynski said at a special board meeting Dec. 21 the agency had obtained ‘several opinions’ that ‘there is no legal conflict of interest with Nixon Peabody as transaction counsel, but chose to hire a new transaction counsel due community perception of a conflict, so that the review process could continue ‘without any perceived prejudice.'”

Party Affiliation Does Not Warrant Disqualification” —

  • “An elected judge’s political affiliation did not warrant disqualification from a case involving a litigant with whom he is affiliated, per a decision of Ohio Supreme Court Chief Justice O’Connor.”
  • “Mr. Morris has sued the Ohio Democratic Party (“ODP”) and some of its individual officers. He claims that Judge Miller has a conflict of interest because he is a member of the Franklin County Democratic Party—which Mr. Morris describes as an affiliate of the ODP—and because the judge’s campaign committee has contributed to the county party. In addition, Mr. Morris alleges that Judge Miller has demonstrated bias by ignoring some of Mr. Morris’s motions and by ruling in favor of the defendants on other matters.”
  • Ruling:
    • “Judge Miller affirms that his political relationship with the ODP will not influence his decision-making. The judge’s current term expires in February 2027, and it does not appear that he is actively campaigning for reelection. Although Judge Miller personally donates a small amount each month to the ODP, there is no evidence that he holds any office in the ODP or that he is currently receiving any tangible benefit from the organization. Further, Mr. Morris claims that he seeks only injunctive relief against the ODP—that is, he seeks to get his temporary job back; he does not seek damages.”
    • “We elect judges in Ohio, and just as we must ordinarily assume that an attorney’s support of a judge will not cause the judge to favor that attorney when he or she appears before the judge, see In re Disqualification of Osowik, 117 Ohio St.3d 1237, 2006-Ohio-7224, 884 N.E.2d 1089, ¶ 6, we must assume that a judge’s endorsement by or support of a certain political party will not affect the judge’s decision-making if that political party later appears before the judge. Based on this record, there is no evidence to call that general assumption into doubt.”