Risk Update

Risk Disputes — Ethical Walls at Work, Disqualification Granted

Posted Dan Bressler

“DOJ Says Atty Wall Can’t Fix Morgan Lewis, Glenmark Conflict” —

  • “The U.S. Department of Justice on Friday told the Pennsylvania federal court overseeing a criminal price-fixing case against Glenmark and Teva that the ‘ethical walls’ put in place by Morgan Lewis & Bockius LLP may not be enough to fix potential conflicts of interest for the firm.”
  • “The DOJ filed a reply brief on Friday supporting its call for a conflict of interests hearing over the agency’s concerns about Morgan Lewis’ representation of Glenmark in the generic drug fixing case, its past representation of Glenmark and Teva during the investigation and its current representation of both companies in parallel civil litigation.”
  • “Glenmark had responded that Morgan Lewis has nothing to hide, noting that neither company objects to its participation in the case, and said the firm had had safeguards in place to prevent attorneys working for each of the companies from seeing the others’ information. But the DOJ said Friday that might not be enough.”
  • “‘It is for this court to decide whether waiver of the conflict here is sufficient,’ the DOJ’s reply said. ‘Glenmark attempts to create an exception to the imputation of conflicts to allow a large firm like Morgan Lewis to enact screens and then assert that conflicts cannot be of concern because the clients do not object. The applicable rules do not allow for such an exception.'”
  • “The DOJ further contended that the rules and cases cited by Glenmark allow screens to be put in place when an attorney moves from one firm to another, ‘not for a law firm to circumvent conflicts of interest.’ The DOJ also argued that the existence of ethical walls does not address the fact that Morgan Lewis has an ‘ongoing duty of loyalty’ to both Glenmark and Teva.”
  • “Glenmark responded to the motion arguing that DOJ’s concerns are “misplaced,” noting the ethical walls and the fact that Wilkinson Stekloff is Glenmark’s lead counsel in the criminal case. The response also said Teva is a sophisticated party with its own experienced attorneys.”

“Akerman Out: Big Law Firm, Partner Disqualified for Alleged Conflict in Insurance Suit” —

  • “A Florida trial court ruled in favor of the plaintiffs on the threshold legal issue of disqualifying a nationwide law firm and one of its partners in its Miami office in multi-year insurance litigation.”
  • “Miami Dade Circuit Judge David C. Miller granted the plaintiff’s motion to disqualify Akerman and commercial litigator Valerie B. Greenberg in a case that shows the complexity of Florida’s no-fault law, and how multiple insurers are constantly facing off when policy beneficiaries have motor vehicle accidents.”
  • “Attorney John H. Ruiz, a founder of MSP Recovery Law Firm in Coral Gables, which is one of the plaintiffs in the case, welcomed the outcome. Ruiz said that the judge made the decision in favor of the plaintiffs on the baseline requirements for the case to proceed that they presented to the court. Citing court documents, he stated Greenberg and Akerman had multiple conflicts of interest in this case due to their representation of dozens of insurance companies, some of whom had conflicting issues.”
  • “‘The takeaway is you need to represent clients and have their best interest in mind,’ Ruiz said. ‘When you’re doing that with multiple clients, you can’t do that ethically or effectively, if you cannot advance the interest of one client, because advancing the interest of one client affects the interest of another.'”
  • “Now, Greenberg and Akerman will have an opportunity to appeal the motion to disqualify and will face a May 5 evidentiary hearing to dispute the conflict-of-interest allegations.”