Risk Update

Risk Reading — California Supreme Court on Staff Attorney Conflicts, Reebok’s DQ Re-do, Quinn President Candidate Takes a Firm Break, Australian Consulting Conflicts Concerns

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.”