Bressler Risk Blog

“Judge Denies Bid to DQ Pietragallo From Repping Par Funding Company in Criminal Actions Following Attorney Assault” —

• “A Pennsylvania federal judge determined attorney Douglas Rosenblum and the Pietragallo Gordon Alfano Bosick & Raspanti firm should not be disqualified from criminal proceedings against the company doing business as the now-defunct Par Funding, despite one of the firm’s attorneys having been assaulted by the brother of the company’s former CEO.”
• “The company’s officers, who are co-defendants with CBSG, had argued that Rosenblum and Pietragallo Gordon should be off the criminal case due to their relationship with Gaetan Alfano, a partner at the Pietragallo Gordon who was allegedly assaulted by the brother of Par Funding CEO Joseph LaForte. But Kearney concluded that there was no conflict of interest, and deferred on whether Rosenblum would be a necessary witness for the criminal trial.”
• “The midday attack occurred on Feb. 28 on 19th St. between Chestnut and Ludlow Sts. in Philadelphia while Alfano, who has been serving as counsel for a court-appointed receiver for CBSG and related entities, was leaving a virtual hearing in which he advocated for evicting Joseph LaForte from his Haverford, Pennsylvania, residence.”
• “The defendants had argued that as Alfano is a partner of the firm and serves on the firm’s executive committee, the criminal charges ‘present trial counsel with a potential conflict between trial counsel’s fiduciary obligations to G.A. — a colleague of the same law firm — and his obligations to CBSG.'”
• “CBSG argued that it could ‘think of no circumstance under which it would call Rosenblum as a witness in its case-in-chief, either to authenticate evidence or to provide substantive testimony,’ and therefore it didn’t appear ‘that Rosenblum’s continued representation of CBSG runs afoul of Rule 3.7,” which holds that a lawyer “shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness,” with the exception of “certain delineated circumstances.'”
• “In Kearney’s July 12 memorandum, the court said in a footnote that it disagreed with the defendants’ argument that Rosenblum couldn’t represent CBSG and have Alfano be a witness for the prosecution on the charges against the LaFortes.”
• “‘The charged assault of G.A. did not change or create new conflicts for attorney Rosenblum. Attorney Rosenblum represents to us his law partner G.A. will not be testifying against Complete Business Solutions because Complete Business Solutions is not charged with crimes against G.A.,’ Kearney said. ‘We find no conflict of interest arising from G.A. identified as an alleged assault victim in charges not brought against Complete Business Solutions.'”
• “The court further noted that Rosenblum had satisfied the requirements of Pennsylvania Rule of Professional Conduct 1.7(b) ‘by obtaining informed consent and a waiver from Complete Business Solutions to continue representing it in this matter,’ therefore, removing any potential or actual conflict of interest that could have existed.”

“Taft Stettinius Missed Conflicts In Rush To Merge, MGM Says” —

• “MGM Resorts International is suing its ‘loyal legal advisers’ Taft Stettinius & Hollister LLP in Michigan state court, alleging the firm violated professional conduct rules by merging with another firm that was representing MGM’s opponent in an arbitration without telling the company about it.”
• “MGM sued in Wayne County Circuit Court on Tuesday, asking for Taft Stettinius to be disqualified from representing its adversary in an arbitration over alleged diversion of internet gaming revenue and for the court to declare that the firm violated the Michigan Rules of Professional Conduct by simultaneously representing both sides of the dispute.”
• “MGM alleges that Taft Stettinius, ‘in its rush to merge with another law firm,’ cast aside its obligations to existing client MGM and started representing a claimant in the pending arbitration against MGM.”
• “‘When MGM confronted Taft with its disloyalty, Taft purported to fire MGM as a client to ‘cure’ the conflict — a tactic forbidden by Michigan law,’ MGM wrote.”
• “Taft Stettinius has represented MGM since 2009 in credit and bond financing transactions, with regulatory advice on gaming issues across numerous jurisdictions, in property tax and liquor licensing issues and during the sale of multiple MGM entities, according to the complaint. MGM has paid more than $3 million to the firm in legal fees since 2014, MGM says. In September, Taft Stettinius merged with Jaffe Raitt Heuer & Weiss PC, which was representing Partners Detroit, a claimant in a ‘contentious arbitration’ opposite MGM, according to the complaint.”
• “MGM didn’t know about the merger, and Taft Stettinius didn’t notify MGM that it was taking on a conflicting party, the company says. MGM discovered the conflict when a demand in the arbitration case came in the same letterhead Taft Stettinius had used to give MGM legal advice, according to the complaint.”
• “‘Either Taft’s pre-merger conflict screening was seriously deficient, or Taft perceived its conflict yet chose not to alert MGM,’ MGM said.”
• “The conflict would result in MGM’s in-house counsel being cross-examined by Taft Stettinius attorneys in the arbitration while MGM was receiving legal advice on other matters from other Taft Stettinius attorneys, the complaint says.”

“Ethics Committee Advice for Justices whose Staff Attorneys Had Prior Involvement in a Matter” —

• “The Supreme Court Committee on Judicial Ethics Opinions (CJEO) has issued an expedited opinion about the obligations of an appellate justice whose staff attorney previously practiced as counsel in civil cases challenging conditions of criminal confinement.”
• “In CJEO Expedited Opinion 2023-050, the committee concludes appellate justices have an obligation under the California Code of Judicial Ethics and the Code of Ethics for the Court Employees of California to disqualify a staff attorney from working on any part of an appellate matter in which the staff attorney’s prior service as a lawyer in the proceeding would have been disqualifying for the justice had the justice served in such a capacity.”
• “The committee advises that under canon provision 3E(5)(a), a justice’s staff attorney would be precluded from working on any criminal defendant’s appeal assigned to the justice, if, at any time:
  • The staff attorney represented the criminal defendant in the criminal appeal now before the justice;
  • The staff attorney represented the criminal defendant in another matter related to the same contested facts and law as that defendant’s criminal appeal; or
  • The staff attorney gave advice to the criminal defendant on any issue in the criminal appeal.”
• “Finally, the committee advises that under canon provision 3E(5)(b), a justice would have the same duty to preclude a staff attorney from working on any criminal defendant’s appeal if, within the two years prior to the justice’s assignment of the criminal appeal:
  • The criminal defendant was a named class member and client of the staff attorney while in private practice;
  • The criminal defendant was a named class member and client of an associate of the staff attorney while in private practice; or
  • A private practice associate of the staff attorney appears in the matter assigned to the justice.”
• “Responding to the inquiring justice’s specific question about a staff attorney’s prior service in private practice as a class action attorney, the committee advises the justice would have no duty to identify and effectively disqualify the staff attorney for any unnamed class members who remained unnamed as clients or class members of either the staff attorney or the attorney’s law associates during the two years prior to the justice’s assignment of an appeal.”

“Reebok Pushes Again For Hogan Lovells DQ In TM Suit” —

• “Reebok renewed its bid to disqualify Hogan Lovells from representing a rival in a sneaker design trademark dispute, calling the firm’s assertion that its past work for Reebok involved foreign trademarks unrelated to the present suit ‘a distinction without a point.'”
• “Reebok responded to Hogan Lovells’ arguments seeking to remain as counsel for Autry, saying in a filing in Massachusetts federal court Wednesday that its trademark registrations in different countries do not create jurisdictional limits on the potential confidences the firm could use to benefit its current client.”
• “‘Reebok’s Stripecheck Mark in Europe is the same as the mark it uses and has registered in the United States,’ Reebok said. ‘In fact, it is a well-known feature of trademark law that a single application can be used to apply for the same mark worldwide, underscoring the global nature of trademark registration and enforcement strategy.'”
• “Reebok sued Autry in May, accusing the company of employing an ‘unlawful business strategy’ that centers on using well-known intellectual property by shoemakers to sell high-priced knockoff sneakers to U.S. consumers, who are often aware of the alleged infringement. The complaint alleges that Autry is selling ‘blatant knockoff versions of Reebok’s shoes.'”
• “In opposing Reebok’s disqualification motion last month, Hogan Lovells argued that the present case is distinct from the firm’s prior representation of Reebok, which involved registrations of trademarks and not litigation related to infringement allegations. Reebok responded that Hogan Lovells did more than just help register its trademarks and said the company had to share confidential information with the firm, even if the registrations were in other countries.”
• “Reebok said it doesn’t have to show the court what confidences Hogan Lovells could use for Autry’s benefit, which the firm had argued, because Massachusetts rules don’t mandate it.”

“Calls for big consultant firms to be broken up” —

• “The former head of the consumer watchdog has called for big consultancy firms to be broken up, in a bid to reduce the risk of conflict of interest. Allan Fels, who previously oversaw the Australian Competition and Consumer Commission, told a Senate inquiry the big firms should only focus on auditing, rather than consultancy work.”
• “The inquiry was set up in the wake of the PwC tax advice scandal, where a former partner passed on confidential government information to clients.”
• “Professor Fels said the government needed to introduce legislation to break up large consultancy firms. ‘Self-regulation can’t be relied upon, nor can government regulation. We therefore need legislation to break up the big four,’ he told the inquiry on Monday.”
• “‘The big four argued that there are benefits from combining consulting and advisory work in a business that does audit. This is a rather dangerous argument for them to run.’ Prof Fels said a similar approach could be taken to the consulting sector to what happened with the country’s banks in the wake of royal commission findings. ‘There is a severe conflict of interest of an actual institution and the interests of customers’ he said.”
• “Consultancy firm Deloitte will appear at the inquiry later on Monday, where senior executives will be forced to explain conflicts of interest. The firm said in a submission to the inquiry it was aware of two incidents of conflicts of interest.”
• “In August 2022, it was identified Deloitte had breached its own independent and conflict management policy when it did not seek pre-approval from the auditor-general to audit an unnamed government entity, while it was also auditing other data held by the same entity.”
• “Deloitte said the firm took its obligations about the use of confidential information seriously. ‘Any matters in relation to the misuse of confidential government information would be investigated in line with our normal processes.'”
• “Finance Minister Katy Gallagher said while she was aware of an over-reliance on consultancy firms being used for government projects, the scale became apparent after she won office. ‘It is a problem – it is worse than I thought,’ she told ABC radio.”

“Miami Mayor Takes Break From Quinn Emanuel for President Run” —

• “Miami Mayor Francis Suarez is taking unpaid leave from his other job at law firm Quinn Emanuel as he makes a long-shot run for the White House.”
• “The firm and Francis agreed that he should focus on his presidential campaign,’ the [firm’s] spokesperson said via email. ‘His unpaid leave was motivated by no other consideration.’”
• “Suarez, who has held a handful of outside jobs while serving as mayor, is under fire over conflicts of interest. His work for a local developer—said to have paid Suarez $170,000 to help cut through red tape—has prompted multiple investigations.”
• “Quinn Emanuel hired Suarez when the firm launched its Miami office in 2021. The firm’s lengthy client roster includes hedge fund giant Citadel, whose founder Ken Griffin donated $1 million to Suarez’s state campaign earlier this year.”
• “He makes about $126,000 a year in his role as the city’s top elected official and converts it into cryptocurrency, according to regulatory filings.”

“Judge Rejects Coke’s Motion to Disqualify Paul Hastings, Says Beverage Giant Signed Valid Conflict Waiver” —

• “A federal judge on Monday denied the Coca-Cola Co.’s motion to disqualify its longtime outside counsel Paul Hastings from representing a startup that has filed a $100 million lawsuit against Coke.”
• “In a 28-page ruling, U.S. Magistrate Judge Robert Norway of the Middle District of Florida found that Paul Hastings’ representation of the startup was indeed a conflict, but that Coke signed an enforceable conflict waiver when it engaged Paul Hastings to represent it in a human rights matter in April 2021.”
• “Norway said that whether that waiver should be deemed enforceable came down to whether Atlanta-based Coke is an experienced, frequent and sophisticated consumer of legal services, the background needed to grasp the potential repercussions of what it was signing.”
• “The answer is clearly yes, the judge ruled, noting that Coke employs between 150 and 200 in-house lawyers and over the last five years has hired more than 50 outside law firms, paying them tens of millions of dollars.”
• “‘Think of it this way,’ Norway wrote. ‘A magician performing magic tricks is perceived differently by different people. A toddler in the audience might be surprised and delighted to see the magician pull a rabbit out of his hat. Teenagers and adults in the audience may respond differently based on the number and types of magic shows they have experienced. But the seasoned vaudeville actor lurking just off the stage won’t be surprised. Here, Coca-Cola is most like the jaundiced-eyed vaudeville actor. Coca-Cola knew what Paul Hastings is, what Paul Hastings does, and the types of clients Paul Hastings represents. Based on Coca-Cola’s familiarity of the risks involved, its representation by independent counsel, and the disclosure provided, I find that Coca-Cola knowingly waived the specific conflict here—that is, it understood and consented to Paul Hastings serving as counsel to an opposing party in future litigation matters,” Norway added.”
• “The dispute between Coke and Paul Hastings broke out in March after Paul Hastings hired three lawyers from Cahill Gordon & Reindel who a month earlier had sued Coke on behalf of SuperCooler, a Maitland, Florida, startup whose technology cools canned or bottled beverages to below freezing in seconds.”
• “After learning that Paul Hastings was taking over representation of SuperCooler, Coke expressed outrage and sued, alleging Paul Hastings had ‘abandoned its ethical obligations’ and should be disqualified”

“Viasat loses bid to disqualify law firm Gibson Dunn in Western Digital patent case” —

• “U.S. law firm Gibson, Dunn & Crutcher on Tuesday fended off an attempt by Viasat (VSAT.O) to disqualify it from representing rival satellite communications company Western Digital (WDC.O) in the companies’ patent dispute in Texas federal court.”
• “Viasat said that Gibson Dunn represents it in other matters and moved to disqualify it from the case on ethical grounds after Western Digital’s lead attorney joined the Los Angeles-founded firm.”
• “U.S. District Judge Alan Albright rejected the motion, according to a Tuesday docket entry, finding that Gibson Dunn had provided ‘adequate safeguards’ to continue handling Western Digital’s case.”
• “Viasat said Gibson Dunn received relevant confidential information from the Acacia case, and that both cases relate to the value of a Viasat patent license with Acacia that the firm would ‘attack’ in the Western Digital case.”
• “Gibson Dunn and San Jose, California-based Western Digital told the court that Viasat had previously agreed to waive any conflict and that it was seeking a ‘strategic advantage.’ The firm also said it had implemented an ‘ethical ‘ to wall off attorneys working on Viasat matters from the case.”

“Jones Walker Client Rips ‘Erroneous’ DQ In $1.2B Fraud Case” —

• “A defendant charged with participating in a $1.2 billion embezzlement scheme targeting Venezuela’s state-owned oil company told a Florida federal court that a magistrate judge’s decision to disqualify Jones Walker LLP from representing him was both ‘contrary to law’ and ‘clearly erroneous.'”
• “In an objection filed Friday to U.S. District Judge Edwin G. Torres’ decision to disqualify the firm and partner Edward Shohat, defendant and asset manager Luis Fernando Vuteff said a precedential case, United States v. Almeida, shows Shohat owed no duty of loyalty to a witness who signed a joint defense agreement with a former Shohat client. He only owes the witness who plans to testify in Vuteff’s case a duty of confidentiality and there is no conflict of interest, Vuteff said.”
• “‘As such, disqualification of counsel of choice is too drastic a remedy where independent counsel will be in precisely the same position with respect to any shared confidences as any entirely new lawyer would be. The order literally ignored this language in Almeida: ‘[t]he mere inability to utilize the privileged communications is not itself a manifestation of a conflict of interest, because no lawyer in the world could utilize those communications,” Vuteff said.”
• “Vuteff, who is from Argentina, is facing one count of conspiracy to commit money laundering alongside Ralph Steinmann of Switzerland. According to prosecutors, the pair created sophisticated financial mechanisms and set up the relationships required to launder more than $200 million.”
• “Last month, Judge Torres took issue with Shohat’s previous representation of his former client, who is a witness in the case in the government’s investigation and ordered Vuteff to retain new counsel. The judge found that Shohat was privy to confidential information tied up in the joint defense agreement with another witness, Alvaro Ledo Nass, who pled guilty earlier this year to taking $11.5 million in bribes.”
• “Judge Torres said disqualification is warranted because there is the risk that the facts or strategies discussed with the witnesses ‘have infected the strategies and theories that Mr. Shohat has already formulated for [the] defendant.'”

“Appellate Court Sides With Law Firm in Dismissing Objections to It Representing Estate, Plaintiff Claims ‘Unethical Advantage’” —

• “In July 2019, Haydusky objected to the Probate Court’s retention of the law firm Dey Smith Steele by attorney Daisy P. Garces on behalf of her mother’s estate, alleging a conflict of interest existed as she had consulted with the firm seeking its representation regarding the matter.”
• “Haydusky claimed that she had ‘multiple telephone conferences and in person meetings with this firm’ and that she shared ‘private, confidential facts’ that could potentially create a conflict and an ‘unethical advantage in this case,’ the opinion said.”
• “The court issued an order overruling the objection, finding no conflict on interest. Haydusky then filed an application for reconsideration of the Probate Court’s order, arguing that she had been denied her right to a fair trial—her legal right to admit evidence, which she claims would have proved her case. She further claimed that the defendants had ‘a completely unfair advantage in the case,’ and that the order represented a prejudicial decision by the judge, showing ‘a clear and obvious bias on the part of the judge,’ the opinion cited.”

“FDIC Wants Atty Disqualification Paused For 5th Circ. Appeal” —

• “The Federal Deposit Insurance Corp. asked a Louisiana federal judge to wait for a Fifth Circuit decision before disqualifying its attorneys from a $125 million bank fraud case against the accounting firm EY, saying it believes its chances of having the decision overturned are strong.”
• “In its Friday motion, the FDIC urged U.S. District Judge Eldon E. Fallon to pause the suit while the Fifth Circuit reviews the judge’s June ruling barring the corporation’s attorneys from representing it due to the potential bias the judge said stems from its improper access to confidential information.”
• “Judge Fallon determined that the ArentFox Schiff LLP attorneys representing the FDIC and in-house counsel viewed thousands of pages of statutorily protected and privileged materials from the Public Company Accounting Oversight Board that they were not supposed to view and that the ArentFox Schiff attorneys had possession of those documents for several years, which could result in prejudice against EY.”
• “‘Irreparable harm will occur here absent a stay because the FDIC-R cannot replace the knowledge and expertise of counsel who have been investigating and litigating this matter for more than five years’ the FDIC said in its motion. ‘Disqualifying the FDIC-R’s counsel will irreparably harm its ability to litigate this matter effectively and efficiently because current counsel’s knowledge and experience cannot be fully replaced. And hiring new counsel will result in substantial burden and undue expense for the FDIC-R.'”
• “The FDIC said it believes it has a good chance of succeeding in having the ruling overturned, noting that Judge Fallon acknowledged its attorneys hadn’t committed any ethical violations and that the only issue was viewing documents that they were accidentally given access to.”
• “Additionally, the FDIC said the suit should be paused because there’s a serious legal question being posed, labeling the specific issue as a ‘first of its kind’ matter that deals with a disqualification imposed because of the possibility of prejudice, versus the usual concrete actions that lead to counsel disqualification in other cases.”
• “‘To the FDIC-R’s knowledge, no court has ever ordered disqualification of counsel for good faith receipt of an intentional production from a governmental body, let alone without finding a rule violation and actual prejudice,’ the FDIC said Friday. At a minimum, the disqualification order raises significant legal issues regarding the proper grounds for attorney disqualification in the Fifth Circuit and warrants a stay to permit meaningful appellate review.”

CNA’s latest newsletter: “Dibble Dabble Double Trouble: Mitigating the Risks of Dabbling In Your Law Practice” —

• “The Merriam Webster Dictionary defines ‘dabble’ as ‘to work or involve oneself superficially or intermittently especially in a
  secondary activity or interest.’ In a legal context, ‘dabbling’ – or practicing in areas outside of your comfort zone, on a sporadic basis, in a field in which you have relatively little experience – is fraught with inherent risks.”
• “A ‘dabbler,’ by definition, presents a practice risk where the attorney has not invested the time nor the regular engagement to achieve competence in a particular area of law. ‘I know enough about X to be dangerous’ is a mantra frequently repeated “in jest, and yet it is no laughing matter.”
• “On the contrary, providing less than competent legal representation is problematic for not just the attorney but their clients, the courts, and the legal system. Dabbling to the point of incompetency also may lead, not surprisingly, to possible disciplinary violations and legal malpractice actions.”
• “The [2020 ABA] report further finds that more than 60 percent of all legal malpractice claims involve an area of the law in which the subject attorney works less than 20 percent of the time and attorneys who practice in a single area of the law account for less than seven percent of all legal malpractice claims.”
• “Lawyers dabble in unfamiliar practice areas for a variety of reasons. The law is a business, and a lawyer can, of course, be motivated to take on a “new kind of matter” (for them) purely for economic reasons… Sometimes dabbling arises from a desire to help purely for personal instead of pecuniary reasons.”
• “In addition, there are certain practice areas where dabbling is more dangerous or where there is ‘crossover,’ meaning that one or more areas of practice overlap within the specific facts presented by the client. For example, intellectual property [IP] legal matters encompass multiple, discrete, and specialized practice areas, i.e., patent, trademark, copyright and trade secret law… Another area of practice that may pose significant problems for the ‘dabbling’ attorney is wills, estates and trusts… Immigration law is another area where dabbling is becoming more frequent… Bankruptcy and collections matters present yet another area where the ‘dabbler’ may encounter problems due to their lack of experience… Lastly, while family law/domestic relations may seem simple at first glance, unexpected complexities (transfer of assets that become taxable events, retirement accounts, etc.) may arise that complicate matters for the dabbler.”
• “Be mindful that your inexperience in the practice area might hurt your client. Opposing counsel will perform due diligence, check you out, and learn about your reputation and background. If you are dabbling, and present as new to the area of practice, they may try to leverage your perceived inexperience. Experienced lawyers will pick up on your lack of experience and may try to intimidate you or, worse yet, leverage any lack of competency into a more favorable settlement or resolution for their client.”
• “It may be that you took on the representation of your current client with the best of intentions, but as the matter progressed, it became apparent you were out of your depth. If the issues are beyond your level of competency, and you are unable or unwilling to either put the additional time in to obtain competency or to engage with co-counsel, then withdrawal would most likely be warranted and possibly required.”

“Avoiding the Confidentiality ‘Trap’: Helpful Suggestions” —

• “While virtually all partners are aware of their fiduciary duties to their law firm, including when they are considering departure, and hopefully act in good faith to comply with these duties, they sometimes overlook an aspect of this duty—confidentiality. In this column we analyze the complications that occur in this important undertaking and offer some hopefully helpful suggestions to avoid being ensnared in this potential trap.”
• “The confidentiality issue is difficult because it contains inherent tensions between the confidentiality rights of both law firms and clients and the commercial needs and interests required to determine the merits of a lateral move. An additional tension is caused by the interplay of the ethical rules and commercial law, including the law of trade secrets.”
• “The departure of a partner from their law firm is naturally fraught with tension as the participants (the current firm, the potential lateral partner and the acquiring firm) have divergent interests. Sometimes those tensions are amicably resolved and others (too often) they are not—but they are inevitable, nonetheless. The same is true concerning confidentiality.”
• “In his well-respected treatise, Simon’s New York Rules of Professional Conducted Annotated (‘Simon’), Prof. Roy D. Simon describes a cause of this tension: ‘disclosure … of [potentially confidential] information [is] needed to enable a law firm and lawyers to assess the financial and strategic concerns relevant to going forward with a prospective lateral hire…'”
• “A partial relief from all these tensions can be found in the New York Rules of Professional Conduct, in particular, Comment [18B] to Rule 1.6, entitled “Lateral Moves, Law Firm Mergers, and Confidentiality.” The existence of these comments, in and of itself, is further evidence of the proliferation and importance of lawyer mobility. But, independent of that, the comments are hugely helpful and worthy of being quoted in quoted in full:
  • [18B] Disclosure without client consent in the context of a possible lateral move or law firm merger is ordinarily permitted regarding basic information such as: (i) the identities of clients or other parties involved in a matter; (ii) a brief summary of the status and nature of a particular matter, including the general issues involved; (iii) information that is publicly available; (iv) the lawyer’s total book of business; (v) the financial terms of each lawyer-client relationship; and (vi) information about aggregate current and historical payment of fees (such as realization rates, average receivables, and aggregate timeliness of payments). Such information is generally not “confidential information” within the meaning of Rule 1.6.”

Fascinating read on conflicts in this space: “National climate group asks: Should Md. lobbying firms take fossil fuel clients?” —

• “What do these three major Maryland institutions [the city of Baltimore, Johns Hopkins University, Prince George’s County government] working to improve the environment have in common? They have all, in recent years, paid Annapolis lobbyists who also work for the fossil fuels industry.”
• “Baltimore City, Hopkins and Prince George’s are hardly alone. Across Maryland, scores of institutions, nonprofit groups, and even clean energy organizations use State House lobbyists who are also representing fossil fuels interests.”
• “Most high-priced Annapolis lobbying firms, which usually hire teams of politically savvy generalists, tend to work a range of issues for a broad variety of clients.”
• “But now a new national climate advocacy group is beginning to ask whether major lobbying firms ought to be taking on fossil fuel clients at all — especially if the aims of those clients run counter to the goals of the institutions, nonprofits and clean energy businesses that these lobbyists also represent.”
• “This new advocacy group, known as F Minus, is also questioning whether various businesses and organizations of all types ought to be spending their money on lobbying firms that also choose to represent fossil fuel interests.”
• “Browning first became interested in the potential conflict of interest that statehouse lobbyists may face two decades ago, when he noticed that a prominent Maryland lobbyist, Laurence Levitan, who was a former state Senate committee chair, was registered to represent both the American Lung Association, which was pushing for an indoor smoking ban, and the Maryland Auto Dealers Association, whose cars were creating air pollution. That seemed like a contradiction to Common Cause.”
• “But now, Browning believes he has encountered hundreds of similar potential conflicts of interest in all 50 state capitals. That’s what he’s hoping to spotlight with F Minus. The organization has compiled a database of lobbyist registrations in all 50 states, tracking lobbyists and the clients they take on.”
• “In Maryland, those registrations can be looked up on the website of the Maryland State Ethics commission, which regulates the lobbying industry. [Direct link here: Maryland Lobbying Registrations]”
• “In Maryland, lobbying state government is big business. According to the ethics commission’s 2022 annual report, businesses, professional associations, labor unions, law firms, educational institutions, government agencies, and advocacy groups spent $71,241,236.38 to influence Maryland lawmakers between Nov. 1, 2021 and Oct. 31, 2022. In that same period, 15 lobbying firms earned $1 million or more, led by Perry White Ross & Jacobson, which took in $6,505,549.86, and Rifkin Weiner Livingston LLC, which earned $5,084,315.99.”
• “Dozens of lobbyists represent fossil fuel interests in Annapolis. Several also represent clean energy companies, environmental groups, public health organizations, and institutions that have tried to do their part to reduce greenhouse gas emissions.”
• “In Annapolis, as in many state capitals, lobbying firms have a large portfolio of clients. While in Washington, D.C., there is a degree of specialization in the lobbying corps — though some large K Street firms also thrive as generalists — the big money firms in Annapolis are generally populated with lawyers, operatives, and government veterans who have a broad range of political contacts and are able to represent their clients’ interests on just about any issue. ‘The model of representing widely divergent interests is more prevalent at the state level than it is at the federal level,’ Browning said.”
• “Consider: Two companies are pushing to build offshore wind energy installations off the coast of Ocean City. One of those companies, Ørsted North America, uses the lobbying firm Rifkin Weiner Livingston LLC, one of the oldest and most powerful lobbying shops in Annapolis. The firm also represents Berkshire Hathaway Energy, an energy company with a broad portfolio of clean energy and fossil fuel businesses. It also represents Colonial Pipeline, an oil pipeline company, and TC Energy, a diverse energy and pipeline company.”
• “Michael V. Johansen, Rifkin’s managing partner, declined to comment. Maddy Voytek, Ørsted’s head of government affairs and market strategy for Maryland, said the company runs “a conflict check every time we hire policy advocates and it is our assessment that these relationships [the Rifkin firm maintains] are appropriate.””
• “In fact, the one registered lobbyist who agreed to speak on the record was Sushant Sidh, a principal in the Annapolis firm Capitol Strategies LLC. His firm represents the Maryland Geothermal Association, a clean energy group, but also Covanta Energy LLC, an operator of trash incinerators and gas plants, and Constellation Energy LLC, a gas and electric company with a varied portfolio.”
• “Sidh said his firm runs ‘an exhaustive conflict check’ whenever it signs a new client, and routinely reaches out to other clients that could take an opposing position from the new client. ‘If both sides agree that there’s no conflict, we’re free to take on the client and we represent clients based on individual goals,’ he said.”
• “Sidh said he understands F minus’ argument about climate change and representing potential polluters, but argued that clean energy technologies aren’t ready for widespread use, meaning fossil fuels must still be part of the energy mix.”
• “Some lobbyists described their firms’ procedures for ensuring there are no conflicts of interest between clients, and two lobbyists who are lawyers said they follow more formal state guidelines for attorney conflicts. Some of the lobbyists said they are reluctant to give up longstanding clients, and said they’re proud to help them navigate the ever-changing legislative and regulatory environment on climate and energy. Others sought to draw distinctions between representing an oil or gas company that is that is drawing fossil fuels from the earth, and a utility or pipeline company that is distributing energy to power plants and consumers.”
• “Still others conceded that F Minus had a point — but asserted that taking an absolutist position on clients and energy producers was at least a decade or more premature, because a full transition to renewable energy is still years away. ‘This is not the way the world works,’ Sidh said.”

“Kirkland & Ellis, K&L Gates, Proskauer Rose Affected in Wide-Ranging Data Hack” —

• “The data of three Am Law 50 firms was accessed in a global data theft operation, according to the ransomware group claiming responsibility for the attack that has compromised the data of millions of individuals.”
• “Kirkland & Ellis, K&L Gates and Proskauer Rose are among the latest organizations to be identified in the breach, finding themselves in the company of a growing list of more than 50 other global corporations and banks targeted by the ransomware group known as CL0P.”
• “More than 16 million individuals have been affected by the breach, according to a tweet Friday by Brett Callow, a cybersecurity threat analyst at Emsisoft tracking the breach.”
• “The group behind the attack, also known as TA505, reportedly began exploiting a vulnerability in file transfer software known as MOVEit, developed by Progress Software, in May, the U.S. Cybersecurity & Infrastructure Security Agency said in a post this month.”
• “For Proskauer, the MOVEit breach isn’t the first compromise of internal information reported this year. The New York-based firm began investigating a data breach after large tranches of sensitive client information were found to be publicly accessible from its cloud-based site.”
• “Proskauer said in April that a third-party vendor who was contracted to set up the cloud site on Microsoft Azure ‘misconfigured’ the site’s security, which left the client data on the site vulnerable to an unauthorized actor and anyone else with access to the internet.”

“Law Firm Cyberattacks Grow, Putting Operations in Legal Peril” —

• “Law firms that rake in dollars defending companies against cyberattack lawsuits are increasingly finding themselves targets, with five class actions filed so far this year alleging the legal operations failed to protect client data.”
• “Bryan Cave Leighton Paisner and other firms facing suits represent a sweet spot for corporate cyberattackers because valuable data is stored there—from employee information such as health and financial data, to Social Security numbers, to patent specifications and merger and acquisition plans.”
• “The five class action cases filed this year against Bryan Cave; Cadwalader, Wickersham & Taft; Smith, Gambrell & Russell; and two smaller firms—Cohen Cleary and Spear Wilderman—claim that they didn’t sufficiently guard against the possibility of cyberattacks. The suits against Cadwalader and Smith Gambrell were later dropped. “
• “Other firms, such as Covington & Burling, are facing action from government regulators over divulging the extent to which clients have been harmed by cyberattacks. The Securities & Exchange Commission subpoenaed Covington in January over a 2020 cyber hack that may have resulted in client data being stolen.”
• “Kevin Rosen, a Gibson, Dunn & Crutcher partner, said large law firms have sought him out in recent months about responding to the damage both they and clients may have suffered from cyberattacks and how to handle potential lawsuits.”
• “Firms are ‘very much focused’ on allocating resources to combat the threat, Rosen said. They are in a unique situation, as they must defend their own internal data plus that of their clients, he said.”
• “Law firms are among industries scrambling to keep up with an increasingly unsafe cyber landscape. The rate of global weekly cyberattacks rose by 7% in the first financial quarter of 2023 compared with the same period in 2022, according to an April report by cybersecurity firm Checkpoint Research.”

“Cybersecurity Risk and Liability: Hot Button Issues for Lawyers” —

• “It is worth noting at the outset that cybersecurity risk should be discussed with the client and disclosed in the engagement letter with the client. For example, the letter should explain in some degree the risks associated with cybersecurity in respect of the client’s confidential information, especially where highly sensitive client data is involved.”
• “Even absent an actual data breach, law firms have been sued for alleged weaknesses in their information security systems. To illustrate, in Shore v. Johnson & Bell, No. 16-CV-4363, 2017 WL 714123, (N.D. Ill. 2017), an action seeking class arbitration was filed in 2016 against a Chicago-based law firm alleging that it put at risk the confidential information of its clients by using a computer time entry system recognized as particularly vulnerable to hacking, causing such information to be ‘unsecured and unprotected,’ despite there being no actual allegation of a security breach having occurred.”
• “Although the court’s decision addressed the plaintiffs’ request for class arbitration, which the court denied, and did not resolve their claim that the security vulnerability left them under ‘a heightened risk of … injuries,’ the lawsuit was litigated for almost a year in court, undoubtedly resulting in cost, effort and potential reputational harm to the firm.”
• “This case serves as a reminder that lawyers are obligated under Comment [8] to Rule 1.1 to keep abreast of the benefits and risks associated with technology lawyers use to provide services to clients or to store or transmit confidential information, and under Rule 1.6(c), to make reasonable efforts to prevent inadvertent or unauthorized disclosure or use of, or access to, such information.”
• “…it is important to bear in mind that each of the fifty U.S. states has a data security breach notification law that requires the notification of affected individuals and, in certain instances state Attorneys General or agencies, of the unauthorized access to or use of certain types of personal information.”
• “With rapidly evolving technology and sweeping developments in data security and in privacy laws and regulations, lawyers and law firms need to be acutely aware of the risks associated with cybersecurity. Alongside those concerns, attorneys must observe their ethical duties under the Rules, as well as their legal obligations under data protection laws and applicable regulatory regimes.”

Andrew Powell, CIO of Macfarlanes notes: “The UK Cyber Threat Report – ‘If you only read one cyber report this year, read this one’” —

• “The National Cyber Security Centre (NCSC) released a Cyber Threat Report on Thursday 22 June, focused on the UK Legal Sector. At the launch event at NCSC’s London offices on Thursday, CEO Lindy Cameron took the opportunity to highlight the range of threats faced by the UK legal sector, from criminals seeking financial gain through ransomware, to nation states looking for the upper hand through theft of IP. The report looks to help UK law practices of all sizes to be more resilient to the main methods of attack.”
• Much has changed in the world since the report was last published in 2018, though many of the cyber risks identified in the report are depressingly familiar. The 2023 version benefits from input from the NCSC (including its i100 industry programme that includes CISO’s co-opted from several law firms), Action Fraud, the NCA, and also what NCSC refers to as its amplification partners: the Bar Council, Law Society and SRA.”
• “The report pulls together research, information and guidance from numerous sources and is an excellent resource for raising awareness of the specific cyber risks facing law firms, and what to do about them. Essential reading for every law firm’s (and chambers) executive team and IT professionals. If you only read one cyber related report this year, read this one.”
• Click here to access the pdf of the report.

“Ethical Considerations for Lawyers Regarding Email Encryption” —

• “For example: When should lawyers use encryption to secure emails or other electronic communications with clients? What discussions should lawyers have with their clients about sharing communications and files? And are there better alternatives to emailing clients when privacy and security are paramount?”
• “Most recently, the Pennsylvania Bar Association’s Formal Opinion 2022-400 comes short of mandating that lawyers use encrypted email, but provides guidance on what lawyers may and must do when transmitting client information, discusses the applicable Rules of Professional Conduct, and offers various practice tips on the topic. Also, it includes a helpful appendix of related opinions from other states.”
• “Several of the Illinois Rules of Professional Conduct are relevant to email encryption for lawyers as they can be applied to safeguarding client information, including Competence (Rule 1.1, Comment 8), Communication (Rule 1.4), Confidentiality of Information (Rule 1.6), and Supervision (Rules 5.1 and 5.3).”
• “Lawyers must make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, client information. This may require using encryption, passwords, or other security measures when sending or storing email messages or attachments.”
• “Lawyers must also be aware of the risks of sending emails to or from public or shared computers, networks, or devices, and take appropriate precautions to avoid unauthorized access or interception.”
• “Lawyers should have an expectation-setting discussion with clients as to their preferred method of communication and the degree of sensitivity of the information related to their representation, including the use of email and text messages.”
• “Lawyers must ensure that the people under their supervision comply with the ethical rules and standards when using email as a means of communication.”
• “The Pennsylvania Bar’s Formal Opinion 2022-400 also recommends the following practices for email security.”

“LA County Cuts Ties With Lewis Brisbois After Racist Emails” —

• “The County of Los Angeles is ending its relationship with Lewis Brisbois after the law firm released racist, sexist, and antisemitic emails from two of its former senior partners.”
• “LA County told Lewis Brisbois Bisgaard & Smith June 16 that it will get ‘no new matters from our office,’ county counsel Dawyn Harrison said in a statement Monday. The county also will review matters the firm is currently handling and decide whether to switch to other outside lawyers on an “individual case basis,” she said.”
• “Harrison did not directly address the emails released by the firm in early June. The messages showed a pair of former partners who led a mass exodus from the firm in May using racist, antisemitic, and anti-LGBTQ remarks over the course of more than a decade.”
• “‘Our office expects that law firms with whom we contract actively promote and practice inclusion, diversity, equity, and anti-racism, and treat everyone in their workforce with dignity and respect,’ she said. ‘It is critical that firms handling our most sensitive matters are empathetic to and compassionate toward the constituents we serve,” she said.”
• “The LA County counsel’s office, which represents various government departments, assigns cases to contract law firms in areas such as litigation. The office’s apportioned budget for the current fiscal year is about $186 million, according to LA County records. “
• “Lewis Brisbois has represented the LA County’s Metropolitan Transportation Authority, Sheriff’s Department and Board of Supervisors, according to court records.”
• “‘We are in a dialogue with our longtime client and have no additional comment at this time,’ Lewis Brisbois spokesperson Chris Coffey said.”

“Lewis Brisbois Email Scandal Is Instructive for General Counsel” —

• “Rob Chesnut, former general counsel and Justice Department prosecutor, writes on in-house, corporate, and legal ethics issues. In this column, he analyzes lessons learned from Lewis Brisbois emails revealing racist and sexist behavior of two partners.”
• “The investigation and outcome at Lewis Brisbois are interesting to track. The firm apparently found the emails in response to an anonymous complaint but then took the extraordinary step of intentionally publishing redacted versions of the offensive emails.”
• “On one level, the decision to share these publicly was an act of transparency. But it might also be characterized as a costly act of revenge that backfired, with clients leaving the firm and turmoil within as leadership considers how no one spoke up.”
• “It’s also an educational moment for general counsel everywhere who should always look for lessons from other companies’ mistakes. If a managing partner and head of the employment practice at a large national ‘woke’ California firm has the audacity to send such emails, is it inconceivable that offensive emails could be written by anyone at any company?”
• “I think three steps are warranted in the wake of the Lewis Brisbois emails, all of which involve a close partnership with your company’s head of HR… Remind everyone that emails, Slack channel messages, and other company communication methods are part of company records that can be pulled up and searched for purposes of lawsuits and investigations—these things are hard to delete. Make sure you’re proud of your messaging and wouldn’t be ashamed to see it reproduced online.”
• “Second, talk to the rest of the leadership team about the Lewis Brisbois case. Share the story and some of the emails. Discuss how leaders set the tone about what’s acceptable to say and do at any company. Barber was a member of the firm’s national management committee, and Ranen the youngest partner in the firm’s history.”
• “People notice and are deeply influenced by the actions of an organization’s most successful people. Remind leaders that they need to protect their own personal brand and the company’s culture and set the right tone, because it likely will be emulated.”
• “Third, think about how you manage and store communications. Many companies have alerts that screen emails and other company-controlled communication channels for offensive words and language—such tools can help detect problems before they go too far.”
• “Make smart decisions around email and document deletion. Companies that retain emails and documents for years without a specific purpose make it challenging and dangerous, when lawsuits and investigations crop up. If you do have to conduct an investigation into employee misconduct, keep a tight circle of those involved in reviewing communications, and think carefully about how you share your findings.”
• “And lastly, remember there are a patchwork of state privacy laws that may restrict when and how far you can go in looking for problems. While company-controlled communication channels like email are generally fair game for searches, looking into texts, private social media pages, or other areas may be legally problematic. Check applicable law before you hunt for problems.”

“I did Alito’s ethics prep for his confirmation hearing. His new excuses are nonsense.” —

• “As the chief White House ethics lawyer from 2005 to 2007, my [Richard W. Painter] job included screening potential Supreme Court nominees for compliance with ethics rules when they were court of appeals judges. I supervised a painstaking process of cross checking a judge’s financial holdings with every case in which the judge participated to detect any actual or apparent violation of recusal requirements under federal law.”
• “Two judges who made the cut, and who otherwise were deemed exceptionally well qualified by the president and his advisers, were Judge Samuel Alito of the 3rd Circuit Court of Appeals and Judge John Roberts of the District of Columbia Circuit.”
• “I helped prepare both for their confirmation hearings, focusing on the judicial ethics questions likely to be put to nominees by the Senate Judiciary Committee. We covered recusal from cases, gifts and financial conflicts of interest. Both confirmation hearings — Roberts’ in 2005, and Alito’s in 2006 — were almost entirely free of controversy over judicial ethics.”
• “It’s been more than 15 years since I prepared Alito and Roberts for confirmation, but my recollection is that I asked both about any gifts, including travel that they could have received from people with interests appearing before them in their circuit courts. Although my concern at the time was free junkets offered to federal judges by corporate-sponsored judicial education programs, the questions I remember asking were inclusive of all trips. After all, I knew senators would ask similar questions at confirmation. As I recall, neither nominee had accepted such trips.”
• “In the Journal, Alito argues that he did not need to recuse himself because he didn’t have a close relationship with Singer and that he had no reason to be aware of Singer’s connection to any case. He also claims that he did not need to report ‘personal hospitality,’ and that his seat on Singer’s plane ‘would have otherwise been vacant.'”
• “Had Alito made these types of arguments while I was preparing him for his confirmation, I would have told him in no uncertain terms that he was wrong.”
• “In my ethics meetings with senior White House staff, I emphasized repeatedly that free travel on a private plane is almost always an impermissible gift for a government official. Even in the rare instance that it is permissible because the host is a close friend, it must be disclosed.”
• “But Alito says that he had spoken only a few times with Singer, meaning Singer was not a close friend, and Alito should not have accepted a free trip on his plane to begin with.”
• “In ethics meetings my staff and I also discussed and poked fun of the empty seat theory. No American who is not a Supreme Court justice (or perhaps an ethically challenged governor) can just hitch a ride on a billionaire’s private plane. Try using the empty seat theory to board a plane or a cruise ship without a ticket and see what happens.”
• “I have written before about how Congress should fix this issue: Pass legislation installing an ethics lawyer and an inspector general for the Supreme Court. The inspector general would investigate and report to Congress on alleged violations of ethics rules by justices and other Supreme Court employees.”
• “The Supreme Court cannot be the only branch of government without accountability to the other two. Just because the justices hold themselves to a lower ethical standard does not mean the public does. Reform must come, or Americans’ confidence in the court will plunge still further.”