Current Client (posted October 21, 2019) Ray v. Balestriere Fariello LLP, 2019 WL 5212359 (S.D.N.Y. Oct. 16, 2019). This is a suit by Ames Ray against his former law firm ("BF") for breach of fiduciary duty, violations of N.Y. Judiciary Law § 487, and conversion. In this opinion the court denies BF's Rule 12(b)(6) motion to dismiss, so it may not be a complete or accurate picture of where the case will end up. The principal claim arises out of BF's representation of Ray in state court, in which Ray accused his wife of making fraudulent conveyances. Before filing that case, BF warned Ray that the trial judge would most likely deny Ray's claim and enter sanctions against BF and Ray. The trial judge did just that. The gist of Ray's claim in this case is that BF had a conflict of interest and did not adequately disclose it or enable Ray to protect himself while BF was jockeying to protect itself. Given the preliminary status of the case, we do not see the value of describing Ray's allegations in detail.

Former Client (posted October 17, 2019) Dhaliwal v. Hunjan, 2019 ONSC 5464 (CanLII) (Super. Ct. Ont. Sept. 20, 2019). Corp. operates a Sikh temple. Lakhivir Dhaliwal is suing Gurmukh Hunjan and Gurmeet Singh for wrongfully removing him as a director and member of Corp. They respond that Dhaliwal stole cash from donation boxes. Law Firm appeared for Hunjan and Singh. Dhaliwal moved to disqualify Law Firm. While a director Dhaliwal had numerous dealings with Law Firm regarding Corp. governance and operations. In this opinion the court granted the motion. In a fact-intensive analysis the court found that the earlier representations were sufficiently related to this case and that there was a substantial likelihood that Law Firm, in the earlier matters, learned information from and about Dhaliwal the it could use to his disadvantage in this case.

Joint/Multiple Representation (posted October 17, 2019) Fly R+F Consulting Ltd. v. 1824455 Alberta Ltd., 2019 ABQB 748 (CanLII) (Ct. Q.B. Alb. Sept. 25, 2019). Corp. has four shareholders, A, B, C, & D. Corp. is in the business of exploring for frac sand and then selling the results of its exploration to mining concerns. A, a 38% shareholder, is suing Corp., B, C, and D., claiming oppression and breach of fiduciary duty. A alleges that the defendants have misused Corp. funds and other Corp. assets. Law Firm appeared for all defendants. A moved to disqualify Law Firm. In this opinion the court found that Law Firm has a conflict of interest because Corp. may have claims against B, C, and D. The court said that the same law firm could represent B, C, and D and entities other than Corp.

Current Client (posted October 12, 2019) Estes v. ECMC Group., Inc., 2019 WL 5064645 (D.N.H. Oct. 9, 2019). ECMC collects student loans. Plaintiffs are suing ECMC for violating various laws in their collection efforts. Plaintiff moved to disqualify ECMC's law firm ("Law Firm") because a partner in Law Firm is trustee of a trust, in which one of Plaintiffs is a beneficiary. In this opinion the court denied the motion. Although Plaintiff had several communications with Law Firm about the trust, he is not a current client of Law Firm. Over the years Law Firm had done things for Plaintiff, but Plaintiff failed to show how those representations had anything to do with this case. Those former client claims are too trivial to discuss here.

Former Client (posted October 12, 2019) Fragolo v. Piao, 2019 WL 5064661 (D.N.J. Oct. 9, 2019). Defendants purchased a massage establishment from Plaintiff. Due to Defendants' alleged carelessness after the sale, in allowing the appearance that Plaintiff was still involved with the business, Plaintiff was mistakenly prosecuted for prostitution. The prosecution was later dropped, but Plaintiff had suffered monetary loss. Plaintiff, represented by Lawyer, brought this suit against Defendants for this loss. Defendants moved to disqualify Lawyer. In this opinion the magistrate judge granted the motion. Simply stated, the court found that Lawyer had represented Defendants in the sale and that the sale was substantially related to Defendants' post-sale conduct. There is more regarding Defendants' possible waiver of the conflict. The court was troubled by the fact that Defendants' first language was Korean. Thus, the waiver was not adequate.

[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.]

Nothing current.

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

Nothing current.

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

Nothing current.

BANKRUPTCY (To read full article, click here)

(posted September 30, 2019) In re Nestor, 2019 WL 4735833 (S.D. Fla. Sept. 26, 2019). Brenda Nestor was PR of the decedent's estate of Victor Posner, a prominent financier. Her work was not satisfactory, so the probate court replaced her with a "curator" (a temporary estate watchdog under Florida law). Nestor then filed this Chapter 11 bankruptcy proceeding and became the debtor in possession. In that role she hired several different law firms, mostly to handle state court litigation. One firm, Oppenheim Law, in its fee application, declared that it was disinterested. The problem was that Oppenheim had represented Nestor pre-petition, and was owed fees at the time of the petition. Moreover, those fees were paid post-petition. None of that was disclosed to the court during Oppenheim's representation of Nestor. In response to Oppenheim's fee application the court noted that it could deny all fees. However, the bankruptcy judge in this opinion allowed a reduced amount. Oppenheim had sought some $211,000 in fees. The court reduced that to some $116,000. That is the key conflicts point among a myriad of issues in the opinion.

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

Nothing current.

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

(posted October 10, 2019) Mortimer v. Diplomat Pharm. Inc., 2019 WL 4934602 (N.D. Ill. Oct. 7, 2019). To read about the case, go to "Zero Sum," below.

(posted October 4, 2019) Wexler v. AT&T Corp., 2019 WL 4874746 (E.D.N.Y. Sept. 30, 2019). Suit under the Telephone Consumer Protection Act. Plaintiff sues on behalf of herself and and on behalf of a class. Earlier in the case, Defendant moved to strike the class allegations because class counsel was Plaintiff's husband. The court granted the motion, Wexler v. AT&T Corp., 323 F.R.D. 128 (E.D.N.Y. 2018). The husband had withdrawn, but the court in that opinion said the husband will ultimately seek quantum meruit fees for the period up to his withdrawal. The court struck the class action, saying Plaintiff "cannot adequately" look after the class' interests regarding her husband's fee request, because of the benefit she would realize from the fee. Plaintiff then moved to amend the complaint and "resurrect" the class action by claiming that her husband would not seek any amount. The magistrate judge recommended the motion be denied. In this opinion the district judge denied the motion. The husband brought current Plaintiff's counsel into the case and had a close professional relationship with them. The court was not convinced that the husband was still not going to benefit from the case somehow.

(posted September 27, 2019) In re Intuniv Antitrust Litig., 2019 WL 4645502 (D. Mass. Sept. 24, 2019). This antitrust action is against Shire LLC and Shire U.S., Inc., manufacturers of Intuniv, a drug used to treat ADHD. In ruling on class certification, the court ruled that one of the class representatives ("FWK") had to be dismissed because of its close relationship with one of class counsel, Joseph Vanek. Vanek created FWK to purchase antitrust claims of several bankruptcy estates. It has no operations or assets, is overseen by several of Vanek's friends, and does no meaningful work on this litigation. Vanek is "simply too entangled" with FWK for this not to be a conflict of interest.

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.)

(posted October 21, 2019) Ray v. Balestriere Fariello LLP, 2019 WL 5212359 (S.D.N.Y. Oct. 16, 2019). This is a suit by Ames Ray against his former law firm ("BF") for breach of fiduciary duty, violations of N.Y. Judiciary Law § 487, and conversion. In this opinion the court denies BF's Rule 12(b)(6) motion to dismiss, so it may not be a complete or accurate picture of where the case will end up. The principal claim arises out of BF's representation of Ray in state court, in which Ray accused his wife of making fraudulent conveyances. Before filing that case, BF warned Ray that the trial judge would most likely deny Ray's claim and enter sanctions against BF and Ray. The trial judge did just that. The gist of Ray's claim in this case is that BF had a conflict of interest and did not adequately disclose it or enable Ray to protect himself while BF was jockeying to protect itself. Given the preliminary status of the case, we do not see the value of describing Ray's allegations in detail.

(posted October 12, 2019) Estes v. ECMC Group., Inc., 2019 WL 5064645 (D.N.H. Oct. 9, 2019). ECMC collects student loans. Plaintiffs are suing ECMC for violating various laws in their collection efforts. Plaintiff moved to disqualify ECMC's law firm ("Law Firm") because a partner in Law Firm is trustee of a trust, in which one of Plaintiffs is a beneficiary. In this opinion the court denied the motion. Although Plaintiff had several communications with Law Firm about the trust, he is not a current client of Law Firm. Over the years Law Firm had done things for Plaintiff, but Plaintiff failed to show how those representations had anything to do with this case. Those former client claims are too trivial to discuss here.

DERIVATIVE ACTIONS (To read full article, click here.

Nothing current.

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

Nothing current.

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

(posted October 17, 2019) Dhaliwal v. Hunjan, 2019 ONSC 5464 (CanLII) (Super. Ct. Ont. Sept. 20, 2019). Corp. operates a Sikh temple. Lakhivir Dhaliwal is suing Gurmukh Hunjan and Gurmeet Singh for wrongfully removing him as a director and member of Corp. They respond that Dhaliwal stole cash from donation boxes. Law Firm appeared for Hunjan and Singh. Dhaliwal moved to disqualify Law Firm. While a director Dhaliwal had numerous dealings with Law Firm regarding Corp. governance and operations. In this opinion the court granted the motion. In a fact-intensive analysis the court found that the earlier representations were sufficiently related to this case and that there was a substantial likelihood that Law Firm, in the earlier matters, learned information from and about Dhaliwal the it could use to his disadvantage in this case.

(posted October 12, 2019) Fragolo v. Piao, 2019 WL 5064661 (D.N.J. Oct. 9, 2019). Defendants purchased a massage establishment from Plaintiff. Due to Defendants' alleged carelessness after the sale, in allowing the appearance that Plaintiff was still involved with the business, Plaintiff was mistakenly prosecuted for prostitution. The prosecution was later dropped, but Plaintiff had suffered monetary loss. Plaintiff, represented by Lawyer, brought this suit against Defendants for this loss. Defendants moved to disqualify Lawyer. In this opinion the magistrate judge granted the motion. Simply stated, the court found that Lawyer had represented Defendants in the sale and that the sale was substantially related to Defendants' post-sale conduct. There is more regarding Defendants' possible waiver of the conflict. The court was troubled by the fact that Defendants' first language was Korean. Thus, the waiver was not adequate.

(posted September 27, 2019) United States Soccer Fed'n Found., Inc. v. United States Soccer Fed'n, Inc., 2019 WL 4673718 (D.D.C. Sept. 25, 2019). Foundation is suing Federation for a declaratory judgment that Foundation is not infringing four of Federation's trademarks. Federation moved to disqualify Robert Raskopf and his firm, Quinn Emanuel, from representing Foundation. In this opinion the court denied the motion. Raskopf had done odd trademark work for Federation at two earlier firms. At one of those firms Raskopf, in 1980, filed applications for trademarks not at issue here. At another firm, Raskopf had done some maintenance and renewal work for the trademarks that are at issue here. In a very fact-intensive analysis of Raskopf's earlier work for Federation, the court found that that work was not substantially related to this case. The court said that had Raskopf worked on the registration of the trademarks at issue, a stronger case could be made that the matters are substantially related.

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

(posted October 7, 2019) Shtofman v. Arch Ins. Co., 2019 WL 4744762 (Cal. App. Unpub. Sept. 30, 2019). We choose not to discuss in any detail the facts or procedure in this unpublished opinion. We do point out that in the opinion the court reiterated that in California a liability carrier represents both the insured and insurer unless they have a conflict, citing State Farm Mut. Auto. Ins. Co. v. Federal Ins. Co., 72 Cal. App. 4th 1422 (1999), and Lysick v. Walcom, 258 Cal. App. 2d 136 (1968).

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

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

(posted October 17, 2019) Fly R+F Consulting Ltd. v. 1824455 Alberta Ltd., 2019 ABQB 748 (CanLII) (Ct. Q.B. Alb. Sept. 25, 2019). Corp. has four shareholders, A, B, C, & D. Corp. is in the business of exploring for frac sand and then selling the results of its exploration to mining concerns. A, a 38% shareholder, is suing Corp., B, C, and D., claiming oppression and breach of fiduciary duty. A alleges that the defendants have misused Corp. funds and other Corp. assets. Law Firm appeared for all defendants. A moved to disqualify Law Firm. In this opinion the court found that Law Firm has a conflict of interest because Corp. may have claims against B, C, and D. The court said that the same law firm could represent B, C, and D and entities other than Corp.

Nothing current.

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

Nothing current.

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

Nothing current.

STANDING (To read full article, click here.)

Nothing current.

Nothing current.

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

Passage of Time

(posted September 27, 2019) Patrolmen's Benevolent Ass'n v. New York State Employment Relations Bd., 2019 WL 4491669 (N.Y. App. Div. Sept. 19, 2019). This is a complaint by Union against Board for declaratory judgment seeking the disqualification of an arbitrator. The current arbitration arises out of the failure of Union and City to agree on a contract in 2017. The arbitration panel comprises three members, two of them selected by the parties, and the third ("neutral") agreed upon by the parties. The City selected the arbitrator subject to this suit, Lawyer Linn. Union seeks Linn's disqualification. The problem is that Linn had performed consulting services for Union over a period of years, until 2003, on issues similar to those in the current arbitration. In 2014 the city appointed Linn as its arbitrator in a Union matter similar to this one. Union sought Linn's disqualification at the outset of the 2014 arbitration. The State Employment Board advised it had no authority to disqualify Linn. The parties proceeded to arbitration, and Union took no further action regarding disqualification, nor sought review of the award. On to this case: The trial court denied disqualification. In this opinion the appellate court affirmed, holding, among other things, that Union's failure to follow through on its objection to Linn in the 2014 arbitration amounted to a waiver of Linn's conflict in the current arbitration. Given the identical parties and similarity of the issues to those in the 2014 arbitration, the failure to pursue disqualification then should count as a waiver for purposes of the current arbitration.

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

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

(posted October 10, 2019) Mortimer v. Diplomat Pharm. Inc., 2019 WL 4934602 (N.D. Ill. Oct. 7, 2019). Over objection, Class Representative sought approval to hire Law Firm as class counsel. In Mortimer v. Diplomat Pharm. Inc., 2019 WL 3252221 (N.D. Ill. July 19, 2019), the court approved Law Firm. The objection was that Law Firm was representing another class against Diplomat in another case in another court ("Zimmerman Case") involving different conduct and time frames. Notwithstanding the differences, the objector claimed that this is a limited funds ("zero sum") situation. The court said ordinarily a law firm may represent different classes against the same defendant. But, the court also said a limited funds scenario could be problematic for that law firm. Here, the court concluded that Diplomat would almost certainly be able to weather bad results in both matters, given its financial condition and insurance coverage. After the Zimmerman Case settled, the objector moved for reconsideration in this case. In seeking approval of the Zimmerman case, Law Firm noted the defendant's precarious financial condition, seeming at odds with Law Firm's position in this case that there was plenty of money for everybody. In this opinion the court denied reconsideration. The court said that Law Firm's position in each case was based on the exact same public financial information, and Law Firm did not misstate the facts or mislead the court. It was just "good advocacy."