Bressler Risk Blog

“Why Scarlett Johansson’s Black Widow Lawsuit May Be Losing Its Judge” —

• “Scarlett Johansson’s lawsuit against Walt Disney Studios has already been a heated topic with both sides going back and forth at each other in the press. It makes one wonder just will happen when this all actually gets in front of a judge. However, that may now take a bit longer than anticipated, as the judge on the case has now offered to recuse himself from the case due to a potential conflict of interest.”
• “According to Spectrum News, the judge is now offering to step aside because, prior to being appointed as a judge, he was a partner at the law firm of O’Melveny & Meyers LLP, which is a firm that currently represents The Walt Disney Company. The judge still receives a pension from that position.”
• “If both parties want to keep Judge Draper, they can file a joint agreement by September 10, otherwise the recusal will take effect and the case will be reassigned. It’s unclear at this point what either party thinks of the recusal.”

“Alito Recusal Lifted, Will Participate in Case Involving Boeing” —

• “Supreme Court Justice Samuel Alito will now participate in an arbitration case involving Boeing Co., a company in which he or his family members once owned stock.”
• “The one sentence notation didn’t explain why Alito, who had previously sat out proceedings in the case, was now able to participate. The court also didn’t immediately return a request for comment.”
• “But Alito in 2019 sold shares in Oracle Corp. to allow him to hear a multibillion-dollar copyright dispute with Alphabet Inc.’s Google. And his 2019 financial disclosures, the latest available for the justice, show he or family members owned as much as $50,000 in Boeing stock, which is a party in the arbitration case.”

“Defendant in Critical TCPA Appeal Seeks to Disqualify Judge Based On Family’s TCPA Work–Will it Pay Off?” —

• “The Defendant/Appellee in the huge Lindenbaum appeal to the Sixth Circuit Court of Appeals is seeking recusal of one of the three judges assigned to the panel overseeing the appeal.”
• “According to the motion Judge Stranch–who vocally advocated against Defendant’s position during oral argument— is married to an attorney who works at a firm that brings TCPA [Telephone Consumer Protection Act] cases within the Sixth Circuit. Apparently the judge’s son and daughter also work at same firm.”
• “While it is unclear from the filing whether Judge Stranch’s relatives directly work on such cases the appearance that Judge Stranch might be profiting through TCPA revenue while determining the fate of the TCPA is sufficient that disqualification of the Judge is ‘mandatory’ in the Defendant’s view.”
• “Seeking recusal of an empaneled appellate judge is always a risky enterprise–and doing so after oral argument is almost unheard of (at least, I’ve never heard of it.) Indeed Defendant’s counsel notes that no one in their entire law firm had ever filed such a motion before. And the fact that Defendant is taking aim at Judge Stranch after she seemingly tipped her hand at oral argument is.. [insert word for ‘seems crazy but might be brilliant but you really can’t tell’ here].”
• “So I get it, I guess. But this still this feels like quite the gamble… To be sure, if any case justifies extra special care it is this one. Again, this case will literally impact trillions of dollars in statutory damages and critically important First Amendment rights (from a certain perspective it will determine whether the First Amendment is even still a thing anymore.)”
• “So that makes the Defendant’s request for disqualification among the highest stakes bets in the highest stakes game of poker you can imagine. Will it pay off? We’ll have to wait and see.”

More backstory, as I was curious too, with clear commentary from one side on the matter: “ORAL ARGUMENT HELD IN LINDENBAUM: Free Speech Hangs in the TCPA Balance (Again)” —

• “As I’ve explained a few times now, the Creasy argument–that the TCPA is unenforceable from November, 2015 to July 6, 2020–is the single BIGGEST AND MOST IMPORTANT legal ruling in American History–at least as judged based upon the the financial impact of the ruling.”
• “Literally TRILLIONS of potential TCPA statutory exposure was wiped off the books as a result of the determination that the TCPA was unconstitutional–and therefore could not be enforced–to robocallers during the HEIGHT of the robocall epidemic.”

“Large Law Firms Inherit Attorneys From Dissolving Employment Law Firm” —

• “After struggling to bring up the next generation of firm leaders, an employment law boutique in Boston is closing, and its partners are taking their work to two larger firms.”
• “Armstrong Teasdale has added five Boston-based employment lawyers Monday now that their former firm, employment boutique Bello Welsh, is set to dissolve after 18 years. Meanwhile, Bello Welsh co-founder Ken Bello has joined Barclay Damon in Boston, effective Monday.”
• “According to Welsh, Bello was planning to join Armstrong Teasdale along with the other former Bello Welsh attorneys. But one of his most significant clients presented a conflict of interest. ‘He was not willing to give up that relationship at that time,’ Welsh said. ‘I wasn’t going to throw this opportunity away for a client of Ken’s.'”
• “Bello confirmed the same in an interview Monday. ‘It was sad for us to go our separate ways after 18 years…but I think each firm is happy with the attorneys they got,’ Bello said.”

“Effort By NHL Insurers To DQ Skadden, Proskauer Rejected” —

• “During a video hearing, New York Supreme Court Justice Melissa A. Crane turned aside a motion by Chubb and other insurers to remove the BigLaw firms from a dispute over who will be on the hook for what insurers say are $92 million of legal bills associated with an underlying $19 million concussion settlement.”
• “The defendant insurers dispute liability and, in a 2021 motion, some claim that ‘Skadden and Proskauer’s fees and expenses for the underlying litigation were, in large part, unreasonable and unnecessary.’ In a later filing, they say fees and expenses have thus far totaled $92 million.”
• “The law firms counter that the insurers are using a meritless disqualification bid as a ‘ploy’ to further their effort to angle for a ‘lowball’ settlement.”
• “During brief argument Tuesday counsel for the insurers, Andrew Poplinger, said the firms are unable to be ‘objective’ about their own billing practices. Counsel for Skadden, Lawrence Spiegel, said insurers are engaging in ‘gamesmanship,’ with a ‘borderline frivolous” motion.'”
• “The judge found not only that the NHL has waived the conflict, but also that different groups of lawyers will be at work on the fee case than were at work in the underlying concussion litigation.”

“Law firm’s investigation of HRC head seen as conflict of interest” —

• “After a damning report on sexual misconduct allegations that forced Andrew Cuomo to resign as governor of New York and that ensnared the Human Rights Campaign president for having a potential role in the cover-up, the nation’s leading LGBTQ group has arranged for a law firm to conduct an independent review of its president’s role in the scandal — but legal experts see a conflict of interest looming over the process.”
• “The scandal with the Human Rights Campaign president began when New York Attorney General Letitia James issued her report finding Cuomo violated the law by sexually harassing as many as 11 women on the job. David, who before taking over as Human Rights Campaign president was counselor to the governor of New York, was named nearly a dozen times in the report.”
• “David has continued to deny wrongdoing. However, the findings indicate after his tenure as counselor to Cuomo, he kept the personnel file of an employee accusing the governor of sexual misconduct, then assisted in returning that file to Cuomo staffers seeking to leak it to the media in an attempt to discredit her. (A representative has disputed the characterization of material David kept as a personnel file, saying it was memorandum on an internal employment matter David kept because he, in part, worked on it.)”
• “Sidley Austin LLP, the law firm chosen to conduct the review, has a self-described ‘long standing pro-bono relationship’ with the Human Rights Campaign and was chief among its legal partners announced in October 2019 for a new direction to litigation in LGBTQ advocacy, which was an engagement Alphonso David undertook when he took the helm as HRC’s president.”
• “As a result of the 2019 announcement, which was brokered soon after David took the helm of the Human Rights Campaign, some legal experts see a conflict of interest that undermines the perception of impartiality in Sidley’s ongoing review and could color any finding of no wrongdoing, which would arguably be in the interests of all parties involved in the review.”
• “Brenner Fissell, a law professor who teaches legal ethics at Hofstra University in Long Island, N.Y., told the Blade the independent review Sidley is undertaking ‘appears less than credible… Sidley in the press release calls HRC a long-standing pro bono client, and they’re also doing PR for them. I mean, they’re really inextricably connected, right?'”
• “Fissell said no ethical rules are in place for conducting independent investigations per se, especially because Sidley has never represented David before as a client. As a result, Fissell said there is likely no technical violation of ethics rules over conflict of interest in this scenario.”
• “‘If you had previously engaged such counsel, that makes it less independent,’ Fissell said. ‘So the answer to your question is, this is not good if you want to do a truly independent investigation.'”
• “Sidley didn’t respond to repeated email requests from the Blade for answers to a series of written questions on the independent investigation and its pre-existing relationship with the Human Rights Campaign, including whether or not Phillips, the attorney quoted in the news statement would participate in the ongoing review.”
• “A Human Rights Campaign representative, however, responded to similar inquiries… The representative in the bullet points said the Human Rights Campaign chose Sidley ‘because of its vast experience in internal investigations and reviews” and is “grateful that Sidley has always represented us on a pro bono basis, including in this matter.'”
• “The Human Rights Campaign representative said Sidley is one of many firms that has worked for the LGBTQ organization, but has “never represented Alphonso David on any matter.” In conducting the investigation, the representative said Sidley reports to an independent Board of Directors for the Human Rights Campaign.”
• “‘When any outside entity is retained to conduct an independent review, it has to be truly independent,’ [Michael Frisch, an ethics counsel and adjunct professor at Georgetown Law School] said. ‘To me, if you’re going to conduct an independent inquiry. Your bonafides to give independent advice in a report is always subject of concern, and one should be above reproach in those situations.'”
• “‘You analyze any conflict of interest from the point of view of is there a substantial risk that the lawyers’ advice will be colored by some interest, other than the client who’s getting the advice,’ Frisch said. ‘The magic language in the rule is substantial risk of material limitation, that’s essentially the test. Every client is entitled to independent advice.'”

“Jussie Smollett Attorney Can Stay on Case Despite Conflict of Interest Concerns” —

• “Former ‘Empire’ star Jussie Smollett will be allowed to retain his lawyer of choice to represent him in his criminal matters, following questions of a possible conflict of interest between the attorney and two key witnesses in the high-profile case.”
• “Those efforts came following allegations of a conflict of interest between Uche and Olabinjo and Abimbola Osundairo, the two brothers Smollett allegedly hired to carry out a hoax attack against him in January 2019.”
• “‘The court firmly believes that the interest of Mr. Smollett to have the lawyer of his choice when his liberty is at stake outweighs any other valid and good faith concerns of the (Office of Special Prosecutor) and the Osundairo family witnesses,’ Linn wrote in his ruling.”
• “While Uche can stay on the case, Linn ruled that some other member of Smollett’s defense team must cross examine the Osundairo brothers if they are called to testify at trial.”
• “Gloria Rodriguez, the attorney representing the brothers, has claimed her clients spoke about the case with Uche before Smollett’s arrest back in 2019, and that any information shared — while privileged — could be used to damage them as witnesses at trial.”
• “Uche strenuously denied having spoken to the brothers, but said he did receive calls from other members of the Osundairo family asking him to represent the brothers after they were brought in for questioning about the case. But once Uche understood that the brothers had already retained Rodriguez, he said he refused to speak or meet with them.””
• “In his ruling, Linn found that ‘the totality of evidence shows clearly and convincingly’ that Uche did, in fact, speak to the brothers and their mother, and discussed topics including: immunity, items seized during the execution of a search warrant, how to handle the media and the $3,500 check Smollett allegedly paid to the brothers to carry out the hoax attack.”
• “But the judge found that the Osundairos never paid Uche, nor did they sign any contracts with him to retain him as an attorney. However, Linn ruled that due to the topics discussed, ‘the threshold for an attorney-client relationship’ was met and “requires further analysis.'”
• “While he acknowledged that the Osundairo family still wants Uche removed from the case, Linn noted that Smollett is the only one on trial, and his right to select the attorney of his choice trumps the ‘good faith concerns’ of Webb and the brothers.”

“‘Real Housewives’ Star Can’t Oust Tweeting Lawyer From Law Firm Bankruptcy Probe” —

• “A bankruptcy judge has blocked “The Real Housewives of Beverly Hills” cast member Erika Girardi from ousting a lawyer investigating her dealings with her estranged husband’s bankrupt law firm, ruling that allegedly inflammatory social media posts don’t warrant disqualification.”
• “Ms. Girardi had requested a court ruling to disqualify Ronald Richards, a special litigation counsel in the bankruptcy case of Thomas Girardi’s now-defunct law firm Girardi Keese, for “false and inflammatory social media posts and public statements” he made on YouTube and Twitter.”
• “Judge Barry Russell of the U.S. Bankruptcy Court in Los Angeles said on Wednesday the disqualification request ‘appears to be nothing more than a blatant attempt by Ms. Girardi to impede Mr. Richards’ efforts … to investigate allegedly fraudulent transfers.'”
• “While conducting his investigation, Mr. Richards has made public comments on Twitter and in YouTube appearances regarding both the bankruptcy case and the Girardis themselves, and often punctuates his tweets with the hashtag #GirardiFraud.”
• “The judge’s written ruling on Wednesday said Mr. Richards’ conduct ‘failed to constitute any ethical violations that would disqualify him’ from efforts to dig up funds for Girardi Keese’s creditors.”
• “Mr. Richards tweeted in June that evidence shows Ms. Girardi “is more than just an innocent spouse.’ Mr. Richards also sat for interviews for a documentary about Girardi Keese, Mr. Girardi and Ms. Girardi, according to Ms. Girardi’s motion seeking to disqualify him. The ABC News documentary, titled ‘The Housewife and the Hustler,’ was released on Hulu in June and featured multiple creditors in the bankruptcy case.”

While written with a moonlighting solo practitioner in mind, this analysis is interesting in the context of firms looking to offer “value added” services to clients to cultivate broader/deeper relationships and grow revenue. (For example, I know of one law firm that was looking to get into the crisis communications management business for clients facing the pressures of the public eye.) With those opportunities come risks to navigate: “Ethics Forum: Questions and Answers on Professional Responsibility” —

• “The best answer is be a lawyer or be a business person. Doing both can potentially get a lawyer in trouble because one has an obligation to their clients and to devote most of their time to their law practice. Further, business and law are different. A business has the goal of making money. Law has the goal of helping people, which is why it is a profession.”
• “The big question is, when one runs a business, how does one avoid having the Rules of Professional Conduct apply to their non-legal business. The Rules of Professional Conduct can make someone very uncompetitive if their competitors don’t have to abide by the same rules.”
• “Rule 5.7(a) is fairly clear that if a lawyer provides nonlegal services to recipients that are not distinct from the legal services then the Rules of Professional Conduct apply. Therefore, if a lawyer has their law practice, but is also running a tax business out of the same office then the Rules of Professional Conduct are going to apply to that lawyer in the tax business.”
• “Under Rule 5.7(b), if the nonlegal services are distinct from the legal services then the Rules of Professional Conduct still would apply if the lawyer knows or should know that the recipient might believe that they are getting the protection of an attorney-client relationship.”
• “Under Rule 5.7(c), a lawyer who is an owner or employer or affiliated with an entity providing nonlegal services can still be subject to the Rules of Professional Conduct if the lawyer knows that the recipient might believe that they are receiving the protection of the attorney-client relationship. Paragraph D tries to provide an exception. That paragraph states that Subsection B and Subsection C don’t apply if the lawyer makes reasonable efforts to avoid any misunderstanding with the recipient of the nonlegal services, and clearly states that the services are not legal services, and also makes clear that the attorney-client relationship does not apply or exist.”
• “The comment notes that this communication has to be made before entering into the agreement for the service of the nonlegal work. It has to be done in a way that an average person would understand what it means.”
• “It is so important for a lawyer to recognize that the use of nonlegal services has to be carefully reviewed and properly presented to the client. Clearly, some businesses can become very uncompetitive if a lawyer is held to their higher standards of the Rules of Professional Conduct.”

“Texas Justices Won’t Nix DQ In Rackspace Founder’s Divorce” —

• “The Texas Supreme Court denied Friday a petition to overturn lower court rulings disqualifying a San Antonio attorney from representing the wife of cloud computing company Rackspace Technology Inc. founder Graham Weston in a contentious divorce case.”
• “The court’s decision leaves in place a March order by Comal Cy District Judge Dib Waldrip disqualifying Jason Davis of Davis & Santos PC from representing Elizabeth Weston in the divorce case. As is usual with mandamus denials, the state Supreme Court didn’t offer an explanation of its reasoning behind the decision.”
• “Elizabeth Weston petitioned the court for relief in July, arguing Judge Waldrip had wrongly lumped Graham Weston together with companies he manages in finding that he was a current client of Davis whom Davis owed a general duty of trust and loyalty to.”
• “Graham Weston challenged Elizabeth Weston’s relief request, arguing she had waited months to file the request and hadn’t first sought relief from the trial court.”
• “Elizabeth Weston filed for divorce in October 2020 and listed Davis, a longtime attorney and friend, as her counsel of record. Graham Weston quickly moved to disqualify Davis, arguing it would be a conflict of interest for Davis to represent Elizabeth Weston when he had represented Graham Weston in related matters and that it was a threat to disclosing confidential information, according to court documents. The parties held an evidentiary hearing on the matter in December, and Judge Waldrip granted Graham Weston’s request in March… the judge said he had found a conflict of interest arose when Davis learned Elizabeth Weston planned to proceed adversely against Graham Weston in the divorce.”

“Graham Weston’s wife accuses San Antonio accounting firm of fraud in lawsuit arising from divorce” —

• “A San Antonio accounting firm has been caught up in the widening litigation arising from the contentious divorce of real estate developer Graham Weston and his wife Elizabeth.”
• “She has accused Irwine Pruitt Associates and principal James Irwine of assisting her estranged husband in creating more than 150 business entities and trusts that were used to defraud her of property ownership rights in the various assets and their income. She estimates more than $1 billion in assets and income are involved.”
• “‘Because Graham claims that all property acquired during the marriage is his separate property, that now reveals a long-running scheme to fraudulently conceal and remove property from Elizabeth’s rightful possession and joint community control,’ she alleges.”

As some folks know, I like experiments. So I’m curious to see how this one plays out — This week is “Job Week” on the Bressler Risk Blog.

Background: Last week a risk director colleague reached out trying to see if I had any leads on a senior conflicts role for an attorney friend of theirs. (All the names and details are vague on purpose, this is a risk management publication after all.) I sent a few notes to a some consultants in my network I thought might help, but also realized that I have access to one of the largest communities of risk professionals around — the BRB readership.

(Plus, as I noted to my colleague, anyone who reads the blog surely merits extra points as someone you’d want to hire or work for. I think of that as the reverse Groucho.)

The Experiment:

• If you have an opening for a risk/conflicts position please feel free to send details my way. A link to a posted job description is ideal, or an email summary also works
• If you are looking for a job (or have a friend), please feel free to let me know as well, sharing whatever details you feel comfortable with

Depending on the response here, I may follow up with a post summarizing open positions. Or I may connect specific individuals with applicable openings directly offline. And if this works well, we might repeat the exercise at some point down the road.

In any case, my aim is to help my readers solve problems and avoid risk — so I’ll take great care to protect any sensitive details folks may disclose.

If you’d like to reach out and are reading this via the daily email, you can just reply to the message and it should reach me. If you’re reading on the website or someone forwarded this to you, I’d encourage you to sign up and join our little community. (I don’t like posting my email address online as I tend to get all sorts of interesting automated inbound spam. No, Elon, I’m not interested in you sending me two Dogecoins for every one I send you, thank you kindly…)

Now, back the the blogging…

“Tech Co. Fights AT&T Bid To Disqualify Its Ex-BigLaw Attys” —

• “U.S. District Judge Katherine Polk Failla shouldn’t disqualify the trio of attorneys based on ‘prior matters from a decade or more ago involving different patents, different products, and different technology,’ Network Apps LLC told the court Thursday in a lightly redacted filing.”
• “Though AT&T claims the three attorneys — Kevin Cadwell, formerly of Baker Botts, and Akin Gump alumni David Clonts and Michael Reeder — worked on matters that were ‘substantially related’ to the patent in this case, Network Apps said in its motion AT&T’s argument ‘quickly unravels under the proper legal standard.'”
• “‘In the context of patent litigation, when neither the patent nor the accused product overlap with the previous matters, no substantial relationship exists to warrant disqualification,’ Network Apps said.”
• “Working on matters related to SMS messaging and call interception aren’t enough to call the work the attorneys did substantially related to the patent litigation at hand, according to Network Apps. ‘Knowing that its ‘substantial relationship’ arguments fail from the start, AT&T falls back on its position that Cadwell, Clonts, and Reeder each spent many hours working for AT&T in years past,’ it said. ‘But without a ‘substantial relationship,’ this argument fails as well.'”
• “When AT&T asked Judge Failla to consider disqualification, it pointed toward the volume of work done by the attorneys on behalf of the tech giant. All together, the attorneys spent more than a decade working for the company, according to AT&T, with Caldwell alone billing almost 13,000 hours, or ‘the equivalent of working full-time for six and a half years.'”

“Activision Blizzard Employees Form Coalition To Oppose Auditing Law Firm” —

• “Workers from multiple Activision Blizzard offices have joined together in a coalition and are formally protesting CEO Bobby Kotick’s appointed policies and procedures auditing firm. The group, The ABK Workers Alliance, sent a joint letter to Activision Blizzard executives to oppose the company’s hiring of WilmerHale, a law firm known for past anti-union action, to oversee an audit of Activision Blizzard’s workplace policies, practices, and procedures.”
  “The games publisher has been under fire since a lawsuit filed against Activision Blizzard was made public in July. A California state agency alleges a history of abuse and discrimination against Activision Blizzard’s female employees, which Activision Blizzard initially called ‘distorted, and in many cases false, descriptions of Blizzard’s past’ in a statement to Screen Rant. The internal and public backlash against the company’s initial response was later followed by a statement from Kotick, acknowledging that the Activision Blizzard response had been ‘tone deaf.’ Rather than only investigate the allegations internally, WilmerHale was hired as a third-party auditor of Activision Blizzard.”
• “Responding to Activision Blizzard’s choice of WilmerHale, The ABK Workers Alliance sent a joint letter to Kotick and the rest of the publisher’s executive leadership, rejecting the firm for its previous history of ‘discouraging workers’ rights and collective action.'”
  • They wrote: “We reject the selection of WilmerHale for the following reasons:
    • WilmerHale’s pre-existing relationships with Activision Blizzard and its executives create an unacceptable conflict of interest.
    • Activision Blizzard has already been a client of WilmerHale, who you used to dispute the Diverse Candidate Search Policy proposed by the AFL-CIO Reserve Fund and UAW Retiree Medical Benefits Trust [1] earlier in 2021.
    • Frances Townsend is known to have relationships with multiple partners at WilmerHale, including former FBI Director Robert Mueller [2].”