Risk Update

Risk Reading — Former Firm Faces False Advertising Complaint, DA-Turned-Judge Need Not Be DQ’d, Firms Facing Client Consternation (and Cut Ties),

David Kluft notes: “If my former firm misleads my clients into thinking I no longer want to work with them, is that false advertising under the Lanham Act?” — 

  • “A NY lawyer teamed up with a firm to start an arbitration practice. After a dispute over funding, the lawyer was fired. The firm unilaterally sent an email to the clients telling them their cases were now being handled by someone else.”
  • “The lawyer sued the firm, inter alia, for false advertising in violation of the Lanham Act : creating the misleading impression that the lawyer was not willing to represent them and not tell the clients they had a choice.”
  • “The Court recognized that this might be an ethics violation but held that this alone did not give rise to a Lanham Act claim. The Court dismissed because the emails were to existing clients (not commercial speech intended ‘to penetrate the relevant market’) and because the Lanham Act does not impose an affirmative duty of disclosure.”

Calif. Ethics Panel Weighs Judge DQs In Racial Justice Cases” —

  • “A California judge who previously served as a district attorney need not be recused from a case involving California Racial Justice Act claims solely because the judge previously handled cases involving elements that may be subject to discovery under the act, the state’s judicial watchdog has put forward in a draft opinion.”
  • “In its latest draft opinion, shared Tuesday, the California Supreme Court Committee on Judicial Ethics Opinions, or CJEO, proposed that in instances where a judge weighs recusal for prior prosecutorial work but opts against it, the judge must ‘disclose on the record any facts reasonably relevant to the determination of disqualification.'”
  • “The committee invited members of the public to provide comments on the draft opinion by July 11. All comments not marked ‘confidential’ will be posted publicly, according to guidance provided by the CJEO, and committee members will use public input to ‘help ensure that the committee considers all potential solutions, consequences, and points of view, which serves to improve the final opinion.'”
  • “The draft opinion considers a judge’s recusal duties under the 2020 act, which ‘prohibit[s] the state from seeking a criminal conviction or sentence on the basis of race, ethnicity, or national origin,’ according to the legislation.”
  • “Under the act, a defendant may ‘file a motion requesting disclosure of all evidence relevant to a potential violation of that prohibition that is in the possession or control of the prosecutor,’ the legislation states.”
  • “The act is found to be violated if a defendant proves they were ‘convicted of a more serious offense than other defendants of other races who are similarly situated; and evidence shows the prosecution more frequently sought convictions for other people of defendant’s race, ethnicity, or national origin in that county,’ the draft opinion states.”
  • “The judge who requested guidance told the committee they worked as a prosecutor from 1998 to 2010 and handled cases from the county’s gang and homicide units involving firearm enhancements.”
  • “The requesting judge is now presiding over a case in which prosecutors have sought to add a firearm enhancement, and defense counsel have moved for discovery seeking all cases in the county where a firearm enhancement would expose a defendant to a life sentence, dating back to 2000.”
  • “The judge reported they had not served as an administrator or policymaker in the district attorney’s office at the time, and never handled a case involving the defendant in the present matter, but reached out to determine if recusal or disclosure would be necessary, given the potential that the judge’s prior prosecutorial work would be invoked in discovery.”
  • “In the draft opinion, the CJEO stated that recusal would be necessary only in an instance where, ‘if the judge’s prior prosecutorial involvement was such that a reasonable person, aware of the circumstances, could justifiably doubt the judge’s ability to remain impartial.'”
  • “In making its proposed finding, the CJEO weighed its own prior opinions, including those focused on judges who previously worked as prosecutors. In this instance, the committee found, there was no ‘nexus’ tying the previous cases with the present case.”
    reasonable doubt of their impartiality.”

Law Firms That Caved to Trump Suddenly Lose a Lot of Big Business” —

  • “At least 11 large companies—including Morgan Stanley, Microsoft, and Oracle—are cutting ties with law firms that caved to President Trump’s threats of political retribution, according to The Wall Street Journal.”
  • “General counsels for multiple companies told the Journal that the law firms’ willingness to cut deals with the president, rather than stand up for themselves, greatly eroded their confidence in the ability of those firms to represent them in court or in high-pressure negotiations.”
  • “Massive law firms that work on lucrative contracts, like Paul, Weiss, Kirkland & Ellis, and others, struck deals with the Trump administration after he aimed six executive orders at them, removing clearances, building access, and government contracts from firms he thought were attacking him. The law firms capitulated, offering billions of pro bono work to the Trump administration, allegedly in the name of protecting their clients and their contracts.”
  • “But multiple lawyers at each firm think that their leadership should’ve put up a tougher fight. One staffer told the Journal she felt ‘physically ill’ upon hearing of Paul, Weiss’s sellout to Trump. Some younger lawyers have even quit over these deals, as one associate at Simpson Thacher said in his exit email that he would not ‘sleepwalk toward authoritarianism.'”
  • “The firms that decided to strike back did end up losing clients but kept some of their principles intact. Jenner & Block declared in a statement that folding to the Trump administration would require ‘compromising our ability to zealously advocate for all of our clients and capitulating to unconstitutional government coercion, which is simply not in our DNA.'”