Risk Update

Supreme (Missed) Conflicts, Significant Conflicts Clash

Breyer, Alito Say ‘No Way’ to Know About Conflict They Missed” —

  • “Two U.S. Supreme Court justices said there was ‘no way’ to know about a conflict of interest they missed in January when the court turned away an appeal involving a United Technologies Corp. unit.”

  • “Justices Stephen Breyer and Samuel Alito both owned stock in the company as of December 2017, according to their most recent financial disclosure reports, but neither disqualified himself as required under federal law.”

  • “‘Because the respondents waived the right to respond to the petition, there was no requirement based on the rules to provide a corporate statement,’ Breyer and Alito said in a statement issued by the court Monday. ‘The court has a diligent conflict-checking process but without a response there would be no way to find out there was a conflict.'”

  • “The statement responded to a report by Fix the Court, the watchdog group that discovered the missed recusal.” Fix the Court’s executive director stated: “Supreme Court justices, like any judges ruling on publicly traded companies, should be cognizant of potential conflicts at all times, and that includes an awareness of M&A activity of the companies in their stock portfolios. Better yet: the three justices who own individual stocks should divest from these holdings and invest solely in blended funds and retirement accounts like the rest of their colleagues.”

Not something you read every day: “PwC Seeks To Depose NY Atty In Conflict-Of-Interest Query” —

  • “PricewaterhouseCoopers told a California judge Tuesday it wants to depose a New York class action lawyer about possible conflicts of interest over his representation of both the city of Los Angeles and utility customers in separate lawsuits over PwC’s overhaul of LA’s billing system.”

  • “PwC wants to question him about allegations he worked as special counsel for the city while also representing the lead plaintiff in a class action against the city on behalf of LA Department of Water and Power customers…”

  • “After LADWP’s new billing system in 2013 sent out ludicrously inaccurate bills and overcharged tens of thousands of customers, Paradis represented Antwon Jones in his 2015 class action complaint against the city alleging PwC’s system led thousands of utility customers to be overbilled, according to a brief PwC filed Feb. 28. Los Angeles reached a $70 million settlement with the customers in 2016, with customers receiving a full credit to their account or a refund if their accounts were closed.”

  • “Around the same time, however, Paradis agreed to represent LADWP with regard to any potential claims against PwC, the brief said, but never told Jones that he would no longer be representing him in the class action.”

  • “PwC alleged in court filings that Paradis has a conflict of interest that was part of a larger scheme to work with the city to choose the lead plaintiff, Jones, and the attorney, Jack Landskroner of Landskroner Grieco Merriman LLC, to handle the class action lawsuit in an effort to get an agreeable settlement for LADWP.”