Current Client (posted October 26, 2020) DelConte v. Monroe Twp. Bd. of Educ., Civil No. 19-13731 (RBK/JS) (D.N.J. Oct. 16, 2020). Lawyer represents Plaintiff, DelConte, against School Board in this employment discrimination case. At the same time Lawyer represents Yoder in another employment discrimination case against School Board. The cases involve the same schools at different times with slightly different claims. School Board moved to disqualify Lawyer in this case. In this opinion the magistrate judge denied the motion. The court, at some length, parsed the timing and juxtaposition of the two circumstances and found no direct conflict between the two representations. The court characterized School Board's claim of possible conflicts, such as Lawyer's having to cross-examine one client in the other's case, as "conjecture." The case contains an interesting twist regarding New Jersey's unique version of M.R. 1.7(b). It says that a "public entity" cannot consent to a conflict. DelConte and Yoder did sign consents to these representations. The court pointed out that the rule does not prevent DelConte and Yoder, as opposed to School Board, from consenting.

Former Client; Playbook (posted October 26, 2020) All-Ways Forwarding Int'l Inc. v. IApparel, LLC, No. 650413/2020 (N.Y. Sup. Ct. Oct. 14, 2020). Plaintiff is suing Defendants for breach of contract. Defendants moved to disqualify Plaintiff's lawyer ("Lawyer") because Lawyer had earlier represented one of Defendants in an acquisition matter. In this opinion the court granted the motion. The court noted that Lawyer would have had "access to confidential information about how defendants are structured, operate and their finances." That information is relevant to this case, which involves "fraud claims" and "corporate veil theories."

Settlement Agreement (posted October 26, 2020) Dymkowski v. Nextel Commc'ns, Inc., No. 07 Civ. 8473 (GBD) (S.D.N.Y. Oct. 15, 2020). At some point, Leeds, Morelli & Brown, P.C. "LMB") represented 587 people in discrimination claims against Nextel. LMB cut a deal with Nextel to resolve these claims with, among other things, Nextel agreeing to pay LMB $5 million. Three of the LMB clients ("Plaintiffs Here") settled their claims against Nextel, but then brought this case against Nextel for, in part, conspiring with LMB to breach LMB's fiduciary duty to the Plaintiffs Here. Nextel moved for judgment on the pleadings. In this opinion the court denied the motion. The Nextel-LMB arrangement was much too complex to detail here. Much was made of what LMB did, or did not, disclose to the Plaintiffs Here and to the other 584 claimants about the arrangement and the amounts of money LMB was to get from Nextel. The court characterized the arrangement, as described by Plaintiffs Here, as an "enormous conflict of interest."

Changing Firms; Screening (posted October 23, 2020) Berkley Custom Ins. Managers v. New York Risk Svs. Grp., No 18-cv-09297 (LJL) (S.D.N.Y. Oct. 22, 2020). In this case insurance-related entity, Berkley, is suing insurance-related entity, York, alleging York mishandled certain bodily injury claims. Law Firm A is representing Berkley. Law Firm B is representing York. Earlier in 2020 Lawyer Gauvin left Firm A and joined Firm B. While at Firm A Gauvin billed time to work for Berkley in the underlying injury claims. He had little to do with the issues in this case. In any event, Firm B erected a screen around Gauvin. Berkley moved to disqualify Firm B. In this opinion the court denied the motion. First, the court found that, while the representations were "substantially related," York was already privy to Berkley's information in the underlying cases. Insofar as York may not have been privy to all of Berkley's confidential information, the screen solved the problem.

Initial Interview (posted October 23, 2020) Kids Town at the Falls, LLC v. City of Rexburg, No. 4:20-cv-00083-DCN (D. Ida. Oct. 21, 2020). Law Firm represents City in this trade and copyright infringement suit. In late 2018 one of the plaintiffs met with an associate at Law Firm to explore bringing this case. Soon after the meeting Law Firm realized that City, Law Firm's long time client, would be the defendant. Law Firm screened the associate, but did not give the notice required by Idaho's version of MR 1.18 for another year. Plaintiff moved to disqualify Law Firm. In this opinion the court denied the motion. First, the court said that Plaintiff failed to show that the information Plaintiff gave to the associate was prejudicial to Plaintiff. Second, the court said any problem was solved by the screen, notwithstanding that the notice "could have been" "timelier."

Joint Representation; Advance Waiver (posted October 19, 2020) Culpepper v. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., No E2019-01932-COA-R3-CV (Tenn. App. Oct. 16, 2020). Plaintiff is suing Law Firm for malpractice, arising out of Law Firm's representing Plaintiff and Plaintiff's former employer in an SEC investigation. The trial court granted Law Firm a judgment on the pleadings. Plaintiff claimed Law Firm had a conflict of interest. The trial court ruled that Plaintiff had waived any conflict by signing Law Firm's "engagement, waiver and consent letter." In this opinion the appellate court reversed and remanded the case to the trial court. [Our note: Law Firm's waiver letter was carefully drafted for a joint representation of an employer and employee. It covers the usual subjects of sharing confidences (or not), withdrawal from one client and continuing with the other, and so forth. The issue, as we see it, is whether, given the facts of this case (including Law Firm's conduct) the letter could have adequately protected the employee. Too early to tell.]

[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.]

Confidentiality; Client Fraud

(posted October 12, 2020) Ill. Op. 20-05 (Sept. 2020). This opinion deals with the obligations of a lawyer for an individual who happens to be trustee of certain trusts. She is improperly funneling estate funds into one of the trusts to benefit herself, to the detriment of other beneficiaries. The opinion contains an excellent analysis of the application of the exception to Ill. Rule 1.6 (confidentiality), enabling a lawyer to blow the whistle on the client in the case of financial fraud. It also discusses the lawyer's duty under Ill. Rule 1.2(d), which forbids a lawyer from assisting a client's fraud and the related provision of Ill. Rule 1.16 requiring the lawyer to withdraw. This situation also implicates Ill. Rule 1.7(a)(2) (material limitation rule). Last, the opinion discusses the applicability of Ill. Rule 4.1(b)(2), which may require (versus permit) the lawyer to disclose the client's fraud.

[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)

Nothing current.

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

Screening

(posted October 23, 2020) Berkley Custom Ins. Managers v. New York Risk Svs. Grp., No 18-cv-09297 (LJL) (S.D.N.Y. Oct. 22, 2020). In this case insurance-related entity, Berkley, is suing insurance-related entity, York, alleging York mishandled certain bodily injury claims. Law Firm A is representing Berkley. Law Firm B is representing York. Earlier in 2020 Lawyer Gauvin left Firm A and joined Firm B. While at Firm A Gauvin billed time to work for Berkley in the underlying injury claims. He had little to do with the issues in this case. In any event, Firm B erected a screen around Gauvin. Berkley moved to disqualify Firm B. In this opinion the court denied the motion. First, the court found that, while the representations were "substantially related," York was already privy to Berkley's information in the underlying cases. Insofar as York may not have been privy to all of Berkley's confidential information, the screen solved the problem.

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

(posted October 12, 2020) In re Allergan PLC Sec. Litig., No. 18 Civ. 12089 (CM)(GWG) (S.D.N.Y. Sept. 29, 2020). In this securities case, the court designated Boston Retirement System ("BRS") as lead plaintiff. BRS had proposed that Law Firms A and B be co-lead counsel. Nothing doing, the court said. Having co-lead counsel can result in excessive legal fees. So BRS designated Firm A as lead counsel. When it came time to certify the class, the court learned that Firm B was continuing to do its share of work on the case, as originally envisioned, with a fee split with Firm A, as originally envisioned. Thus, the court said BRS could not be lead plaintiff and denied class certification. Given the conduct of all concerned, the court characterized the case as "lawyer driven" and cited, in a footnote, the Seventh Circuit's conclusion that the result of a lawyer-driven case is "an acute conflict of interest" between counsel "whose pecuniary interest is in their fees" versus a recovery by the class.

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.

CORPORATE FAMILIES (To read full article, click here.)

Nothing current.

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

(posted October 26, 2020) DelConte v. Monroe Twp. Bd. of Educ., Civil No. 19-13731 (RBK/JS) (D.N.J. Oct. 16, 2020). Lawyer represents Plaintiff, DelConte, against School Board in this employment discrimination case. At the same time Lawyer represents Yoder in another employment discrimination case against School Board. The cases involve the same schools at different times with slightly different claims. School Board moved to disqualify Lawyer in this case. In this opinion the magistrate judge denied the motion. The court, at some length, parsed the timing and juxtaposition of the two circumstances and found no direct conflict between the two representations. The court characterized School Board's claim of possible conflicts, such as Lawyer's having to cross-examine one client in the other's case, as "conjecture." The case contains an interesting twist regarding New Jersey's unique version of M.R. 1.7(b). It says that a "public entity" cannot consent to a conflict. DelConte and Yoder did sign consents to these representations. The court pointed out that the rule does not prevent DelConte and Yoder, as opposed to School Board, from consenting.

(posted October 12, 2020) Ohio Op. 2020-10 (Oct. 2, 2020) This opinion holds that a law firm may not be on both sides of a transaction, even with the agreement of sophisticated clients, and even with a screen between the opposing teams of lawyers.

(posted October 7, 2020) ABA Op. 494 (Oct. 7, 2020). This opinion discusses a lawyer's obligation when the lawyer has a relationship with the lawyer on the other side of a matter. The committee considers three types of relationships: 1. sexual; 2. close friendship; and 3. occasional friendly encounters. The most relevant rule is MR 1.7(a)(2). In the case of sexual relationships the lawyer must disclose it to the client and get consent confirmed in writing. However, in most cases the relationship is nonconsentable. In the case of a close friendship, it must be disclosed and consent must be confirmed in writing. In the last case, disclosure may not even be required. ABA Op. 96-400 (1996) deals with opposing lawyers discussing or planning a practice merger, and the committee notes that the situation is analogous. We cover the merger situation at "Opposing Lawyers Negotiating a Practice Merger." See the Table of Contents at this site. ABA Op. 494 appears to be an excellent research tool, citing many state authorities.

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.)

Playbook

(posted October 26, 2020) All-Ways Forwarding Int'l Inc. v. IApparel, LLC, No. 650413/2020 (N.Y. Sup. Ct. Oct. 14, 2020). Plaintiff is suing Defendants for breach of contract. Defendants moved to disqualify Plaintiff's lawyer ("Lawyer") because Lawyer had earlier represented one of Defendants in an acquisition matter. In this opinion the court granted the motion. The court noted that Lawyer would have had "access to confidential information about how defendants are structured, operate and their finances." That information is relevant to this case, which involves "fraud claims" and "corporate veil theories."

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

(posted October 23, 2020) Kids Town at the Falls, LLC v. City of Rexburg, No. 4:20-cv-00083-DCN (D. Ida. Oct. 21, 2020). Law Firm represents City in this trade and copyright infringement suit. In late 2018 one of the plaintiffs met with an associate at Law Firm to explore bringing this case. Soon after the meeting Law Firm realized that City, Law Firm's long time client, would be the defendant. Law Firm screened the associate, but did not give the notice required by Idaho's version of MR 1.18 for another year. Plaintiff moved to disqualify Law Firm. In this opinion the court denied the motion. First, the court said that Plaintiff failed to show that the information Plaintiff gave to the associate was prejudicial to Plaintiff. Second, the court said any problem was solved by the screen, notwithstanding that the notice "could have been" "timelier."

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

(posted September 28, 2020) Builders Concrete Sevs., LLC v. Westfield Nat'l Ins. Co., No. 19 C 7792 (N.D. Ill. Sept. 14, 2020). Focus was the contractor for a new apartment building. Focus hired Builders to do the concrete work. Builders had a liability policy from Westfield. A concrete column buckled causing damage to Builders' work and to other property. When Focus refused to pay Builders, Builders sued Focus to collect. Focus counterclaimed for negligence. Builders tendered the defense of the counterclaim to Westfield. Westfield reserved rights. In this opinion the court resolved the issue of whether Westfield had a right to conduct the defense with its chosen counsel, or whether there was a conflict entitling Builders to hire its own counsel at Westfields's expense. The court ruled for Westfield because the coverage issue involved how much of the damage was covered, not whether it was covered at all, following Nat'l Cas. Co. v. Forge Indus. Staffing Inc., 567 F.3d 871, 874 (7th Cir. 2009).

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

Nothing current.

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

(posted October 19, 2020) Culpepper v. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., No E2019-01932-COA-R3-CV (Tenn. App. Oct. 16, 2020). Plaintiff is suing Law Firm for malpractice, arising out of Law Firm's representing Plaintiff and Plaintiff's former employer in an SEC investigation. The trial court granted Law Firm a judgment on the pleadings. Plaintiff claimed Law Firm had a conflict of interest. The trial court ruled that Plaintiff had waived any conflict by signing Law Firm's "engagement, waiver and consent letter." In this opinion the appellate court reversed and remanded the case to the trial court. [Our note: Law Firm's waiver letter was carefully drafted for a joint representation of an employer and employee. It covers the usual subjects of sharing confidences (or not), withdrawal from one client and continuing with the other, and so forth. The issue, as we see it, is whether, given the facts of this case (including Law Firm's conduct) the letter could have adequately protected the employee. Too early to tell.]

(posted October 12, 2020) Ohio Op. 2020-10 (Oct. 2, 2020) This opinion holds that a law firm may not be on both sides of a transaction, even with the agreement of sophisticated clients, and even with a screen between the opposing teams of lawyers.

Nothing current.

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

Nothing current.

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

(posted October 7, 2020) ABA Op. 494 (Oct. 7, 2020). This opinion discusses a lawyer's obligation when the lawyer has a relationship with the lawyer on the other side of a matter. The committee considers three types of relationships: 1. sexual; 2. close friendship; and 3. occasional friendly encounters. The most relevant rule is MR 1.7(a)(2). In the case of sexual relationships the lawyer must disclose it to the client and get consent confirmed in writing. However, in most cases the relationship is nonconsentable. In the case of a close friendship, it must be disclosed and consent must be confirmed in writing. In the last case, disclosure may not even be required. ABA Op. 96-400 (1996) deals with opposing lawyers discussing or planning a practice merger, and the committee notes that the situation is analogous. We cover the merger situation at "Opposing Lawyers Negotiating a Practice Merger." See the Table of Contents at this site. ABA Op. 494 appears to be an excellent research tool, citing many state authorities.

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

STANDING (To read full article, click here.)

(posted October 12, 2020) In re Andry, Misc. No. 15-2487 (E.D. La. Oct. 8, 2020). In the Deepwater Horizon case the court established a settlement program including a Claim's Administrator's Office ("CAO"). Lawyer Schiff briefly represented CAO in an investigation of illegal kick-backs allegedly paid by Lawyer Andry during the settlement process. This is a disciplinary case against Andry brought by the Lawyer Disciplinary Committee ("LDC") of the court. Schiff has appeared for Andry in this disciplinary proceeding. LCD moved to disqualify Schiff. In this opinion the court denied the motion. First, the court ruled that LCD, never a client of Schiff, lacked standing under Rule 1.9(a). The court ruled that Rule 1.9(c) did not apply because any information Schiff learned from CAO had become public. The court found Rule 1.11 did not apply because Schiff's work for CAO was not a position recognized by the rule. The court ruled that Rule 1.12(a) did not apply because Schiff was not a "third-party neutral." The court also held that Schiff's conduct was "not prejudicial to the administration of justice." Last, the court felt the appearance of impropriety standard did not fit this case.

Nothing current.

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

Advance Waiver

(posted October 19, 2020) Culpepper v. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., No E2019-01932-COA-R3-CV (Tenn. App. Oct. 16, 2020). Plaintiff is suing Law Firm for malpractice, arising out of Law Firm's representing Plaintiff and Plaintiff's former employer in an SEC investigation. The trial court granted Law Firm a judgment on the pleadings. Plaintiff claimed Law Firm had a conflict of interest. The trial court ruled that Plaintiff had waived any conflict by signing Law Firm's "engagement, waiver and consent letter." In this opinion the appellate court reversed and remanded the case to the trial court. [Our note: Law Firm's waiver letter was carefully drafted for a joint representation of an employer and employee. It covers the usual subjects of sharing confidences (or not), withdrawal from one client and continuing with the other, and so forth. The issue, as we see it, is whether, given the facts of this case (including Law Firm's conduct) the letter could have adequately protected the employee. Too early to tell.]

Passage of Time

(posted October 12, 2020) Padgett v. Collins Mobile Home Sales, Inc., No. A20A0846 (Ga. App. Oct. 7, 2020). Collins moved to disqualify Padgett's lawyer. The trial court granted the motion. In this opinion the appellate court reversed and remanded for the court to consider delay as a waiver. The court noted the distinction between waiving a conflict and waiving the opportunity to make a motion to disqualify. The trial court evidently found no waiver under Ga. Rule 1.7(c)(2), but did not consider whether Collins' delay waived the opportunity to raise the conflict.

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

Nothing current.

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

Nothing current.