Risk Update

Risk News — DQ Motion Denied, Judicial Conflict/Recusal Ethics Complaint Complexity

Posted Dan Bressler

“Judicial ethics complaints can’t be ignored in Maine” —

  • “Maine’s Supreme Judicial Court finds itself with a thorny dilemma on its hands at the start of the new year. For the first time ever, one of its own members, Associate Justice Catherine Connors, has been recommended for discipline by the Committee on Judicial Conduct after failing to recuse herself for an important foreclosure case in which she cast the deciding vote.”
  • “Though the issues surrounding recusal — opting out of case under consideration — are murky, leaving much to the discretion of the individual judge, the case itself is strikingly clear.”
  • “Before joining the court in 2020 as Gov. Janet Mills’s first SJC nominee, Connors was a partner with Pierce Atwood, the Portland law firm. She argued and lost a case before the law court in 2017 that established a notably strict standard for how banks must present foreclosure documents.”
  • “Basically, the court found that errors in such documents — such as misstating the amount owed the bank — invalidated the proceeding, essentially ending any need for repayment of the mortgage.”
  • “That precedent was swept away in two foreclosure cases in 2024, including one – Finch v. U.S. Bank – where Connors was the deciding vote. This 4-3 decision relieved banks from the standards established in Pushard.”
  • “Having argued the case that established the 2017 precedent, Connors checked with the Advisory Committee on Legal Ethics, which said she did not have to recuse because because she hadn’t represented either plaintiff.”
  • “Still, recusal was the better option. During Connors’ confirmation hearing before the Legislature’s Judiciary Committee, responding to pointed questioning, she said she would ‘err on the side of recusal’ in foreclosure cases.”
  • “Like most states, Maine ethics laws forbid not only a direct conflict of interest, but the ‘appearance’ of conflict.”
    “That’s what the Committee on Judicial Conduct determined. Given her foreclosure work for banks, it found, the public ‘would reasonably question her impartiality.'”
  • “Asked by the SJC to recommend a specific sanction, it opted for a reprimand — the lightest punishment. Here we enter uncharted territory. Since it was formed as a judicial branch committee in 1978, Judicial Conduct has recommended discipline only 17 times, and never for a member of the SJC.”
  • “As Maine’s highest court, the SJC now faces the uncomfortable task of potentially sanctioning one of its own members. To avoid this additional dilemma, some court observers suggest a panel of Superior Court trial judges be convened, or a group of out-of-state appeals court justices.”
  • “There are pros and cons to any approach, and the decision will not be easy. Still, there is a legal process — very unlike the ethics crisis engulfing the nation’s highest court.”

“Proskauer Beats DQ Bid In NJ Hospital Antitrust Fight” —

  • “A New Jersey federal judge refused to disqualify Proskauer Rose LLP from defending healthcare network RWJBarnabas Health Inc. in an antitrust lawsuit brought by competitor CarePoint Health Management Associates LLC, saying the present case wasn’t substantially related to work the law firm previously did for CarePoint.”
  • “In a late November ruling unsealed Friday, U.S. Magistrate Judge Cathy L. Waldor wrote that CarePoint failed to establish that certain facts related to its prior representation by Proskauer were both relevant and material to its antitrust lawsuit against RWJBarnabas.”
  • “She said that while CarePoint had suggested that the law firm had given it certain advice regarding related-party transactions, Proskauer had provided ‘foward-looking advice about whether the use of specific government funds for a small number of hypothetical transactions would pass muster under the relevant rules and regulations.'”
  • “The only related party involved also appeared to be a hospital’s landlord, Judge Waldor wrote.”
  • “One Proskauer attorney who was involved in CarePoint’s representation had described the firm’s involvement in a declaration, saying that Proskauer only provided advice concerning the permissibility of one hospital making rent payments to a related party and the implication of repaying a loan using COVID-19 relief funds.”
  • “CarePoint sued RWJBarnabas in September 2022, accusing the New Jersey-based healthcare provider network of conspiring with others in a ‘years-long systematic effort’ to ‘destroy competition and to monopolize the provision of general acute care hospital services and related health care services’ in northern New Jersey.”
  • “CarePoint, which recently filed for Chapter 11 bankruptcy, alleged that an ‘intertwined web of schemes’ had sought to ‘destroy’ three hospitals CarePoint operated as independent competitors to push CarePoint out of business through ‘serial acquisitions of competing hospitals and health care providers, as well as of the real estate necessary to operate competing hospitals.'”
  • “In moving to disqualify Proskauer from representing RWJBarnabas, CarePoint asserted that the law firm had ‘open access to CarePoint’s confidential financial information and confidences.'”
  • “‘By pursuing their strategy of blaming CarePoint’s founders, several of whom Proskauer apparently had attorney-client communications [with] … Proskauer has now caused this litigation to be substantially related to Proskauer’s prior representation of CarePoint,’ CarePoint said.”
  • “RWJBarnabas, in response, snubbed CarePoint’s disqualification bid as a litigation tactic, ‘pure and simple.'”
  • “In denying CarePoint’s disqualification motion, Judge Waldor also wrote that CarePoint was seemingly suggesting that Proskauer was extrapolating that CarePoint engaged in other related-party transactions.”
  • “‘Stretched supposition is not fact, however,’ Judge Waldor wrote, adding that a ‘congruency of facts’ was needed to trigger a restriction on legal representation under a relevant Rule of Professional Conduct.”
  • “‘In sum, the Court finds that Plaintiffs have not shown that this case is substantially related to Proskauer’s previous representation of CarePoint,’ Judge Waldor wrote. ‘Plaintiffs have therefore not met their ‘heavy’ burden of proving that Proskauer’s representation of Defendant runs afoul of [Rule of Professional Conduct] 1.9(a).’