Standing; Confidentiality (posted June 5, 2020) Cordova v. Nashville Ready Mix, Inc., No. M2018-02002-COA-R3-CV (Tenn. App. May 19, 2020). This is a wrongful-death case, which has settled. At this stage various parties are fighting over how the proceeds should be distributed. We will keep the focus narrow. The plaintiffs' original lawyers, Hodges and Martin, who were replaced mid-stream, are making claims for fees. They hired Olson to assert their claims. The plaintiffs moved to disqualify Olson because Olson had represented one of the defendants in this case. The trial court denied the motion. In this opinion the appellate court affirmed. First, the court held that the plaintiffs had no standing because they were never clients of Olson. The plaintiffs also claimed that Hodges and Martin might reveal the plaintiffs' privileged information to Olson. The court rejected that position because an exception to Tennessee Rule 1.6 allows Hodges and Martin to reveal information in order to assert their fee claims. The court said that claiming Hodges and Martin would reveal more information than necessary was "mere speculation."

Bankruptcy (posted June 4, 2020) In re Boy Scouts of Am. & Del. BSA, LLC, No 20-10343(LSS) (D. Del. May 29, 2020). BSA applied to retain Sidley Austin as "restructuring counsel" in this Chapter 11 case. Century Indem. Co., a unit of Chubb, was the only party objecting. Until recently Sidley represented Chubb and Century on various matters, including Century's disputes with its reinsurer over claims against BSA. In this opinion the bankruptcy judge overruled Century's objection and approved Sidley's retention. In January 2020 Sidley informed Chubb that it was withdrawing from all Chubb and Century matters. That process completed in February. As for §327(a), it is written in the present tense, so it does not prevent Sidley's retention. The court also looked to Rule 1.9. Based upon conflicting testimony, the court concluded that Sidley's earlier reinsurance work for Century "could be 'substantially related' to at least some aspects" of this case. However, the court was influenced by the fact that "conflicts counsel" would be handling BSA's insurance matters and that Sidley had erected a screen between its reinsurance group and the BSA restructuring team. Last, the court noted a number of cases that appear at our page, "Current Client, Part 1," under "No Harm, No Foul."

Initial Interview (posted June 1, 2020) Pakistan Tehreek-E-Insaf USA LLC v. PTI USA, LLC, No. 20-CV-2392 (VEC) (S.D.N.Y. May 29, 2020). Plaintiff moved to disqualify the lawyer for Defendant ("Lawyer"). In this opinion the court granted the motion. A representative of Plaintiff ("Rep") had earlier communicated with Lawyer about Lawyer potentially representing Plaintiff in this matter. They spoke on the phone and exchanged emails and texts. Rep and Lawyer gave differing versions of what they discussed. The court concluded that these contacts at least potentially provided Plaintiff's confidences to Lawyer giving Defendant an unwarranted advantage in this case. Reading between the lines, the court seemed irked with Lawyer for not detecting the conflict earlier and for failing to mention the conflict to Rep sooner. [Our note: N.Y. Rule 1.18 seems designed for this situation. The court did not mention the rule.]

Changing Firms (posted May 29, 2020) Dudhia v. Agarwal, No. 11571N305847/17 (N.Y. App. Div. May 28, 2020). In 2014 Plaintiff retained Lawyer Tankha at Law Firm Cohen Clair. Tankha moved from Cohen Clair to a new firm in March 2015 and took Plaintiff with her. In December 2018 Defendant retained Cohen Clair. Plaintiff moved to disqualify Cohen Clair. The trial court denied the motion. In this opinion the appellate court affirmed. Plaintiff failed to show that Cohen Clair retained "material, confidential information" of Plaintiff's. Moreover, Cohen Clair had set up a screen between the three lawyers working on the case and the rest of the firm.

Class Action (posted May 29, 2020) Sullivan-Blake v. FedEx Ground Package Sys., Inc., No. 2:18-cv-01698-RJC (W.D. Pa. May 21, 2020). This case involves a class of delivery truck drivers claiming unpaid overtime from FedEx. What makes the matter complicated is that FedEx contracts with trucking companies (independent service providers, or "ISPs") to make local deliveries. Whether the plaintiff drivers are employees of FedEx or an ISP is one complication. Another complication is that Law Firm represents a class of ISPs against FedEx, involving compensation issues, in a New Jersey case. FedEx moved to disqualify Law Firm in this case. FedEx claims Law Firm has a conflict of interest because the issues in the New Jersey case clash (our word) with those in this case. In this opinion the court denied the motion to disqualify. The court's analysis includes a discussion of Rule 1.7(a)(1) (direct adversity) and Rule 1.7(a)(2) (material limitation). [Our note: The court's reasoning is way too extensive and situation-specific to justify detailing here. Lawyers handling the myriad of issues dealing with employee/independent contractor issues in the home delivery business (FedEx, Amazon, UPS, etc.) may want to read the opinion.]

Former Client; Loyalty? (posted May 29, 2020) Quantico Tactical Inc. v. United States, Nos. 20-120C & 20-150C (Ct. Cl. May 26, 2020). A government agency solicited bids for equipment. Quantico submitted a proposal. In December 2019 the agency informed Quantico that it was "excluded from the competitive range." Quantico, represented by Latham & Watkins, brought this action to overturn the agency's determination. Another bidder, ADS, moved to intervene and to disqualify Latham. The problem was that Latham, in 2010 and 2011, had represented ADS in ADS' IPO. In this case Quantico is alleging misconduct by ADS. ADS argues that in the IPO matter Latham would have had access to much of ADS' confidential information, some directly bearing on Quantico's allegations in this case. In this opinion the court granted the motion to disqualify. [Our note: We do not quarrel with the result. It is unfortunate that the court makes a number of confusing, and potentially misleading, statements about a law firm's supposed "duty of loyalty" to former clients. As Professor Wolfram has made abundantly clear, the only value recognized by Rule 1.9(a) is one of confidentiality, Charles W. Wolfram, Former-Client Conflicts, 10 Geo. J. Legal Ethics 677, 691-699 (1997). We will continue to dust off that cite, and remind readers about it, until a better analysis comes along.]

Standing (posted May 27, 2020) Ad Astra Recovery Servs., Inc. v. Heath, No. 18-1145-JWB-ADM (D. Kan. May 22, 2020). Plaintiff moved to disqualify Law Firm, which was representing multiple defendants. In this opinion the magistrate judge denied the motion. The only issue worthy of discussing here is whether Plaintiff had standing to make the motion. The court found that because Law Firm had never represented Plaintiff, Plaintiff lacked standing to move to disqualify. The court noted that some courts have relaxed the standing requirement where, for example, the conflict in question "may tend to undermine the validity of the proceedings," not the case here. The court went on to discuss whether Law Firm's conduct violated either 1.7 or 1.9. In an unremarkable analysis, of no precedential value, the court found no violation.

[Note: Items that do not fit under the conflicts categories below, but which we believe will be of interest to this audience will appear here and on the This and That pages.]

(posted June 5, 2020) Cordova v. Nashville Ready Mix, Inc., No. M2018-02002-COA-R3-CV (Tenn. App. May 19, 2020). To read about the case, go to "Standing," below.

(posted May 18, 2020) Bellevue Farm Owners Ass'n v. Stevens, No. 77830-7-1 (Wash. App. May 11, 2020). To read about the case, got to "Standing," below.

[Note: These, too, will appear at the This and That pages.]

Nothing current.

APPEALABILITY (To read full article, click here.)

Nothing current.

ARBITRATION OF MALPRACTICE CLAIMS (To read the full article, click here.)

Nothing current.

BANKRUPTCY (To read full article, click here)

(posted June 4, 2020) In re Boy Scouts of Am. & Del. BSA, LLC, No 20-10343(LSS) (D. Del. May 29, 2020). BSA applied to retain Sidley Austin as "restructuring counsel" in this Chapter 11 case. Century Indem. Co., a unit of Chubb, was the only party objecting. Until recently Sidley represented Chubb and Century on various matters, including Century's disputes with its reinsurer over claims against BSA. In this opinion the bankruptcy judge overruled Century's objection and approved Sidley's retention. In January 2020 Sidley informed Chubb that it was withdrawing from all Chubb and Century matters. That process completed in February. As for §327(a), it is written in the present tense, so it does not prevent Sidley's retention. The court also looked to Rule 1.9. Based upon conflicting testimony, the court concluded that Sidley's earlier reinsurance work for Century "could be 'substantially related' to at least some aspects" of this case. However, the court was influenced by the fact that "conflicts counsel" would be handling BSA's insurance matters and that Sidley had erected a screen between its reinsurance group and the BSA restructuring team. Last, the court noted a number of cases that appear at our page, "Current Client, Part 1," under "No Harm, No Foul."

(posted May 8, 2020) In re HCP Sys., LLC, No. 18-11984-ta7 (D.N.M. May 7, 2020). To read about the case, go to "Zero Sum," below.

CHANGING FIRMS - SCREENING (To read full article, click here.)

(posted May 29, 2020) Dudhia v. Agarwal, No. 11571N305847/17 (N.Y. App. Div. May 28, 2020). In 2014 Plaintiff retained Lawyer Tankha at Law Firm Cohen Clair. Tankha moved from Cohen Clair to a new firm in March 2015 and took Plaintiff with her. In December 2018 Defendant retained Cohen Clair. Plaintiff moved to disqualify Cohen Clair. The trial court denied the motion. In this opinion the appellate court affirmed. Plaintiff failed to show that Cohen Clair retained "material, confidential information" of Plaintiff's. Moreover, Cohen Clair had set up a screen between the three lawyers working on the case and the rest of the firm.

(posted May 6, 2020) Residences at European Vill. Condo. Ass'n v. Rockhill Ins. Co., No. 3:19-cv-1490-J-20JRK (M.D. Fla. May 4, 2020). While this case was pending, Lawyer left Plaintiff's law firm and joined Defendant's law firm. Plaintiff moved to disqualify Defendant's law firm. The parties filed opposing affidavits on the issue of what information Lawyer may have received about the law suit while at Plaintiff's law firm. He knew about the suit and may have discussed it with other lawyers for Plaintiff. In this opinion the magistrate judge denied the motion to disqualify. The court said Plaintiff could not rely upon the "irrefutable presumption" created by Rule 1.9, but must show knowledge of "material confidential information," the standard in Rule 1.10. Plaintiff failed to make that showing.

CLASS ACTIONS (To read full article, click here.)

(posted May 29, 2020) Sullivan-Blake v. FedEx Ground Package Sys., Inc., No. 2:18-cv-01698-RJC (W.D. Pa. May 21, 2020). This case involves a class of delivery truck drivers claiming unpaid overtime from FedEx. What makes the matter complicated is that FedEx contracts with trucking companies (independent service providers, or "ISPs") to make local deliveries. Whether the plaintiff drivers are employees of FedEx or an ISP is one complication. Another complication is that Law Firm represents a class of ISPs against FedEx, involving compensation issues, in a New Jersey case. FedEx moved to disqualify Law Firm in this case. FedEx claims Law Firm has a conflict of interest because the issues in the New Jersey case clash (our word) with those in this case. In this opinion the court denied the motion to disqualify. The court's analysis includes a discussion of Rule 1.7(a)(1) (direct adversity) and Rule 1.7(a)(2) (material limitation). [Our note: The court's reasoning is way too extensive and situation-specific to justify detailing here. Lawyers handling the myriad of issues dealing with employee/independent contractor issues in the home delivery business (FedEx, Amazon, UPS, etc.) may want to read the opinion.]

CO-COUNSEL/COMMON INTEREST (To read full article, click here.)

COMMERCIAL NEGOTIATIONS (To read full article, click here.)

Nothing current.

CORPORATIONS (To read full article, click here.)

Nothing current.

CURRENT CLIENT (To read full article, click here.)

Confidences of Non-Client

(posted May 11, 2020) Glencairn IP Holdings Ltd. v. Prod. Specialties ("Final Touch"), 2020 EWCA Civ. 609 (Ct. App. Eng. & Wales May 7, 2020). Glencairn is suing Final Touch and others for infringement of its registered design and of an EU trade mark dealing with the shape of a whiskey glass. Final Touch hired the law firm, Virtuoso, for defense. The problem is that Virtuoso very recently defended another defendant, Dartington, in a very similar case brought by Glencairn. Glencairn moved to disqualify Virtuoso in this case, claiming that Virtuoso would have learned confidences during a mediation of the earlier claim that would prejudice Glencairn in this case. The High Court judge denied the motion. In this opinion the appellate court affirmed. Virtuoso is a "small" firm. It erected a screen between the Dartington team and the Final Touch team. The court said that the strict Bolkiah standard did not apply where the applicant had not been a client. The court held that it was incumbent upon Glencairn to show that information had been shared, which Glencairn failed to do. The fact that Virtuoso was a small firm was not enough to invalidate the screen.

DERIVATIVE ACTIONS (To read full article, click here.

Nothing current.

EXPERT WITNESSES (To read full article, click here.)

(posted May 11, 2020) A Co. v. X, 2020 EWHC 809 (TCC) (High Ct. Eng. & Wales April 3, 2020). In this opinion the judge extended the injunction preventing an expert witness firm for A from accepting employment with an opponent of A in related matters. Among other things, the court held that the expert firm "owes a fiduciary duty of loyalty" to A and that the expert firm breached that duty by accepting the opposing employment. This, without regard to whatever duties the expert may have to the tribunal.

FORMER CLIENT (To read full article, click here.)

(posted May 29, 2020) Quantico Tactical Inc. v. United States, Nos. 20-120C & 20-150C (Ct. Cl. May 26, 2020). A government agency solicited bids for equipment. Quantico submitted a proposal. In December 2019 the agency informed Quantico that it was "excluded from the competitive range." Quantico, represented by Latham & Watkins, brought this action to overturn the agency's determination. Another bidder, ADS, moved to intervene and to disqualify Latham. The problem was that Latham, in 2010 and 2011, had represented ADS in ADS' IPO. In this case Quantico is alleging misconduct by ADS. ADS argues that in the IPO matter Latham would have had access to much of ADS' confidential information, some directly bearing on Quantico's allegations in this case. In this opinion the court granted the motion to disqualify. [Our note: We do not quarrel with the result. It is unfortunate that the court makes a number of confusing, and potentially misleading, statements about a law firm's supposed "duty of loyalty" to former clients. As Professor Wolfram has made abundantly clear, the only value recognized by Rule 1.9(a) is one of confidentiality, Charles W. Wolfram, Former-Client Conflicts, 10 Geo. J. Legal Ethics 677, 691-699 (1997). We will continue to dust off that cite, and remind readers about it, until a better analysis comes along.]

Playbook (Rejected)

(posted May 22, 2020) Plein v. USAA Cas. Ins. Co., No. 97563-9 (Wash. May 21, 2020. The Pleins' home suffered fire damage. The Pleins' insurer, USAA, recommended a company to remedy the damage. The smoke aroma persisted after that work. The Pleins determined that much of the damage had not been remedied, but merely covered up. USAA balked at providing coverage for additional work, and the Pleins sued USAA for bad faith. Law Firm joined in the representation of the Pleins. The problem was that Law Firm had just recently terminated its representation of USAA. That representation spanned some ten years and involved "at least 165 cases," some of which involved bad faith claims by homeowners. One case involved a bad faith claim arising out of defective remediation of smoke damage. USAA moved to disqualify Law Firm in this case. The trial court denied the motion. The appellate court reversed. That court pretty clearly adopted the playbook approach to the substantial relationship test under Rule 1.9. The court noted the "legal strategies and defenses developed between USAA" and Law Firm. The court concluded that Law Firm's knowledge goes beyond the "general knowledge of the client's policies and practices" as discussed in Comment 3 to Rule 1.9. In this opinion the Washington Supreme Court reversed the appellate court, holding that Law Firm's knowledge of USAA's attitudes and procedures in matters similar to this one do not rise to the level of "substantial relationship." The court focussed largely on Comment 3 to Rule 1.9 (Evidently, Comment 3 in the Model Rules is quite similar to that in the Washington Rules.)

Playbook

(posted May 6, 2020) Persichette v. Owners Ins. Co., No. 19SA188 (Col. May 4, 2020). Plaintiff is suing InsCo over an uninsured motorist matter, including claims of bad faith. Law Firm appeared for Plaintiff. Law Firm previously represented InsCo in 455 bad faith cases between 2004 and 2017. Twenty-three cases "mirror" Plaintiff's claim. Law Firm had put in place several of InsCo's procedures and trained the adjuster handling this case. InsCo moved to disqualify Law Firm. The trial court denied the motion. In this opinion the Colorado Supreme Court reversed (made "the rule to show cause absolute").

INITIAL INTERVIEW - HEARING TOO MUCH (To read full article, click here.)

(posted June 1, 2020) Pakistan Tehreek-E-Insaf USA LLC v. PTI USA, LLC, No. 20-CV-2392 (VEC) (S.D.N.Y. May 29, 2020). Plaintiff moved to disqualify the lawyer for Defendant ("Lawyer"). In this opinion the court granted the motion. A representative of Plaintiff ("Rep") had earlier communicated with Lawyer about Lawyer potentially representing Plaintiff in this matter. They spoke on the phone and exchanged emails and texts. Rep and Lawyer gave differing versions of what they discussed. The court concluded that these contacts at least potentially provided Plaintiff's confidences to Lawyer giving Defendant an unwarranted advantage in this case. Reading between the lines, the court seemed irked with Lawyer for not detecting the conflict earlier and for failing to mention the conflict to Rep sooner. [Our note: N.Y. Rule 1.18 seems designed for this situation. The court did not mention the rule.]

INSURANCE DEFENSE (To read full article, click here.)

Nothing current.

INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.)

(posted May 13, 2020) Hudye Inc. v. Rosowsky, 2020 ABQB 296 (CanLII) (Ct. Q.B. Alb. April 28, 2020). The Hudye family owned several companies. James Rosowsky, while at a law firm, did work for them. They brought him in-house as general counsel. He negotiated agreements with the Hudyes regarding his status, compensation, and participation in the businesses as a business partner. They had a falling-out, and the Hudyes terminated Rosowsky. The Hudyes brought this action to rescind various of the agreements benefitting Rosowsky. A primary argument was that, as the Hudyes' lawyer, Rosowsky breached his fiduciary duties to them. Rosowsky counterclaimed for additional compensation and other relief. In this opinion the court denied relief all around. Running through the court's lengthy reasons was the court's firm belief that the Hudyes were very sophisticated and knew exactly what they were getting into in all their dealings with Rosowsky. The court made the distinction between the fiduciary duties Rosowsky had while acting as a lawyer, and the duties Rosowsky had as a business partner. The Hudyes tried to interject the Alberta Code of Conduct § 3.4-13 (doing business with a client) (very similar to ABA Model Rule 1.8(a)), and its Saskatchewan counterpart. The court said nothing doing; the Codes are for purposes of discipline and have no role in this action for equitable relief.

JOINT/MULTIPLE REPRESENTATION (To read full article, click here.)

(posted May 24, 2020) Fly R+F Consulting Ltd. v. 1824455 Alberta Ltd., 2020 ABCA 204 (Ct. App. Alb. May 14, 2020). Company has four shareholders. A dispute arose among them. Minority Shareholder ("MS") filed this action against Company and the three other shareholders for "breach of fiduciary duty and shareholder oppression." MS claimed that the three defendant shareholders used Company's assets for "personal gain" and formed a new company to use information belonging to Company. Law Firm appeared for all four defendants.  MS moved to have Law Firm removed from the case.  The chambers judge ordered that Law Firm could not represent Company. The defendants appealed that order. MS cross appealed, claiming that Law Firm should be removed from representing the three defendant shareholders, as well. In this opinion the appellate court ruled that Law Firm should be removed from representing any defendant, "given the potential for conflict among the directors and shareholders of [Company] and [Company] itself."

Nothing current.

MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.)

Nothing current.

OF COUNSEL (To read full article, click here.)

SETTLEMENT AGREEMENTS (To read full article, click here.)

STANDING (To read full article, click here.)

(posted June 5, 2020) Cordova v. Nashville Ready Mix, Inc., No. M2018-02002-COA-R3-CV (Tenn. App. May 19, 2020). This is a wrongful-death case, which has settled. At this stage various parties are fighting over how the proceeds should be distributed. We will keep the focus narrow. The plaintiffs' original lawyers, Hodges and Martin, who were replaced mid-stream, are making claims for fees. They hired Olson to assert their claims. The plaintiffs moved to disqualify Olson because Olson had represented one of the defendants in this case. The trial court denied the motion. In this opinion the appellate court affirmed. First, the court held that the plaintiffs had no standing because they were never clients of Olson. The plaintiffs also claimed that Hodges and Martin might reveal the plaintiffs' privileged information to Olson. The court rejected that position because an exception to Tennessee Rule 1.6 allows Hodges and Martin to reveal information in order to assert their fee claims. The court said that claiming Hodges and Martin would reveal more information than necessary was "mere speculation."

(posted May 27, 2020) Ad Astra Recovery Servs., Inc. v. Heath, No. 18-1145-JWB-ADM (D. Kan. May 22, 2020). Plaintiff moved to disqualify Law Firm, which was representing multiple defendants. In this opinion the magistrate judge denied the motion. The only issue worthy of discussing here is whether Plaintiff had standing to make the motion. The court found that because Law Firm had never represented Plaintiff, Plaintiff lacked standing to move to disqualify. The court noted that some courts have relaxed the standing requirement where, for example, the conflict in question "may tend to undermine the validity of the proceedings," not the case here. The court went on to discuss whether Law Firm's conduct violated either 1.7 or 1.9. In an unremarkable analysis, of no precedential value, the court found no violation.

(posted May 18, 2020) Bellevue Farm Owners Ass'n v. Stevens, No. 77830-7-1 (Wash. App. May 11, 2020). Nasty and complicated property dispute. One of the litigants, Stevens, moved to disqualify the lawyers for a number of his opponents, claiming those lawyers had conflicts of interest. The trial court denied the motion. In this opinion the appellate court affirmed. The court held simply that because the lawyers had never represented Stevens, Stevens had no standing to make the motion. There's more: Stevens' opponents had submitted conflict waivers to the trial court. The trial court, over Stevens' objection, ordered the waivers sealed. In this opinion the appellate court affirmed that order because the waivers were protected by the attorney-client privilege.

Nothing current.

WAIVERS/CONSENTS (To read full article, click here.)

Nothing current.

WITNESS - ADVERSE - CURRENT/FORMER CLIENT (To read full article, click here.)

Nothing current.

ZERO SUM GAMES (To read full article, click here.)

(posted May 8, 2020) In re HCP Sys., LLC, No. 18-11984-ta7 (D.N.M. May 7, 2020). The Title 7 trustee moved to retain lawyer Angelo Artuso to bring claims by the estate against Rita Torres and another defendant. Artuso is suing Torres on behalf of Leda Cook in state court. The trustee believed that knowledge Artuso gained in the Cook case gave him an advantage in this case. Cook is a creditor of the estate. Torres objected to the retention of Artuso. In this opinion the bankruptcy judge approved the retention, "without prejudice." Cook and Artuso had agreed to put Cook's state court case on hold. The court noted that, down the road, Cook and the estate could be competing for limited funds if Torres did not have sufficient wealth to satisfy both cases. The court said that at that point Artuso would have to drop Cook or the estate. Or, the parties could enter into a "pooling agreement, approved by the Court after notice and a hearing," citing Kittay v. Kornstein, 230 F.3d 531 (2d Cir. 2000).