Risk Update

Risk News — Alleged “Time Bomb” Conflict, Client Confidentiality, Publicity & PR Risk

Alston & Bird’s alleged conflict may be ‘time bomb’ in ex-Cognizant GC’s bribery trial” —

  • “A New Jersey federal judge refused last week to countenance what he called a ‘backdoor’ attempt by the former general counsel of Cognizant Technology Solutions Corp to oust Alston & Bird from representing the company as federal prosecutors prepare for a March 2023 bribery trial against the onetime top lawyer.”
  • “But at a hearing on Friday in the government’s criminal case, U.S. District Judge Kevin McNulty of Newark, New Jersey, left open the possibility that the former GC, Steven Schwartz, can nevertheless ask witnesses about an hours-long meeting attended by Schwartz, one of his lawyers and an Alston & Bird partner who was subsequently retained by Cognizant.”
  • “McNulty, who previously referred to Alston & Bird’s involvement in the Schwartz case as a ‘time bomb,’ said there remains ‘a danger of this issue blowing up at trial.'”
  • “Alston & Bird’s outside counsel, Kevin Marino of Marino, Tortorella & Boyle, said in an email statement that Kramer, a former New Jersey federal prosecutor, is “a person of impeccable character,” and that Schwartz’s attempt to impugn her account of their meeting is ‘baseless.’ ‘She and her law firm are pleased to have this unpleasant episode behind them, and will continue to vigorously represent Cognizant in its capacity as a government witness against Mr. Schwartz,’ Marino said.”
  • “The ex-GC denies the government’s allegations that he and Coburn authorized a $2 million scheme to bribe Indian officials for permits to speed up construction of Cognizant offices. Schwartz has insisted that he is being scapegoated by his former employer, an information technology services company, which Schwartz has accused of trying to sandbag his defense.”
  • “The story behind the unusual proceeding on Friday, as I’ll explain, is complicated. But the dispute over Alston & Bird’s involvement highlights the unforeseen pitfalls that can develop when prosecutors in corporate crime cases rely on cooperation from defendants’ former employers.”
  • “McNulty said in May that he would hold an evidentiary hearing on the disqualification motion. But in July, on the eve of the hearing, Schwartz reached an agreement with Alston & Bird. The ex-GC withdrew his disqualification motion in exchange for Kramer’s sworn declaration answering certain questions. Schwartz also consented to Alston & Bird’s continued representation of Cognizant.”
  • “That provision led to a revival in August of the conflict dispute – and this time, the government got involved. Schwartz’s lawyers informed prosecutors that he intended to raise the issue of his meetings with Kramer to challenge government evidence elicited at trial. Prosecutors cried foul to the judge, arguing that Schwartz should not be allowed to use allegations of a conflict to tar government witnesses after sidestepping an evidentiary hearing by ditching his disqualification motion.”

Clyde & Co with one of those jaw dropping tales (if you watch the linked firm’s video): “Ethical and Liability Implications of Promoting Achievements on Client Matters” —

  • “The LA Times reported that defense counsel told jurors during closing arguments in April 2022 to disregard the death certificate, which attributed death to an infection from the punctured colon. Instead, defense counsel argued that plaintiff died from nonsurvivable alcohol-related pancreatitis, failures of other hospital staff to relay key information, and pointed to defense’s expert opinion finding no negligence occurred and another doctor disputing plaintiff had an infection.”
  • “But defense counsel reportedly summarized the case differently during an inter-office celebration in May: ‘A guy that was probably negligently killed, but we kind of made it look like other people did it,’ defense counsel is reported as saying to his colleagues. ‘And we actually had a death certificate that said he died the very way the plaintiff said he died and we had to say, ‘No, you really shouldn’t believe what that death certificate says, or the coroner from the Orange County coroner’s office.””
  • “The speech was recorded and posted on the firm’s social media page. It was then downloaded before being deleted, and is still circulating on Twitter.”
  • “In a statement to The LA Times, defense counsel said his remarks to his staff were ‘ineloquent’ and ‘imprecise’; he did not know they would be recorded and posted, and were ‘intended purely as an internal briefing to our staff, using shorthand phrases which might understandably cause confusion for a lay audience unfamiliar with the case at hand, and the law in general.'”
  • “Based on these facts (as well as other trial irregularities), Orange County Superior Court Judge James Crandall, who presided over the trial has reportedly vacated the verdict, ordering the case back to court.”
  • “At the outset, Comment [5] to Rule 1.6 states, in relevant part, ‘Lawyers in a firm may, in the course of the firm’s practice, disclose to each other information relating to a client of the firm.’ Therefore, counsel’s comments during an inter-office meeting setting were not per se improper within the confines of his law firm. However, the firm, by posting these comments on its social media website disclosed information relating to the representation of the client without the client’s consent. The identity of a firm’s clients is itself confidential unless already very widely known.”
  • “Since the firm’s social media post would be considered an “imprecise” advertisement, by the attorney’s own admission, then it is also likely in violation of ABA Model Rule 7.1 (duty to not make false or misleading communication about a lawyer’s services).”
  • “Finally, the attorney’s purported statement to the LA Times that he, a named partner, did not know his statement would be recorded and posted serves as a reminder that Rules 5.1 and 5.3 obligates attorneys at the firm to assure that lawyers and staff they supervise comply with these confidentiality obligations.”