Important Note on Web Security

As of April 15, 2023, this Web site has been rendered "secure." This means we have obtained "SSL Certificates" for www.freivogel.com and www.freivogelonconflicts.com. If IT personnel in your organization have either cautioned you about use of this site, or restricted your access to it, you should call this change in status to their attention.

Conflict Uncategorized (posted May 30, 2023) In re Guardianship J.W., No. 21-0348 (Ia. May 26, 2023). Lawyer filed a proceeding to make himself guardian of Minor over the objections of Minor's mother ("Mother"). Lawyer had previously represented Mother, including on custody matters. The trial court dismissed the proceeding because, in part, Lawyer had a conflict of interest. The appellate court reversed, saying that dismissal was not an appropriate remedy for an ethics violation. In this opinion the Iowa Supreme Court affirmed the trial court and ruled the action should be dismissed. First, the court ruled that dismissal could be a remedy. Second, the court ruled that Iowa Rule 1.9 would apply even though Lawyer was representing himself. Last, the court held that this proceeding was substantially related to Lawyer's earlier work for Mother. [Our note: This is a long opinion containing detailed reasoning. One interesting aspect is the court's analysis of decisions from other jurisdictions, the Restatement, and the ABA's Annotated Model Rules.]

Changing Firms; Screening (posted May 26, 2023) Octaform Sys., Inc. v. Johnston, 2023 WL 3645965 (D. Nev. May 25, 2023). Trade secret case. Firm P represents Plaintiffs; Firm D represents Defendants. Lawyer was an associate at Firm D from 2015 to 2018. Lawyer left Firm D in 2018 to join Firm C (C not in this case). Lawyer left Firm C to join Firm P in 2022. Because Lawyer had worked on this case at Firm D, Firm P screened Lawyer from this case. Nevertheless, Defendants moved to disqualify Firm P. In this opinion the magistrate judge denied the motion to disqualify. Because Lawyer did a lot of work on this case at Firm D, the judge found that Lawyer's role was "substantial." (The Nevada screening rule normally invalidates a screen when the lateral's work was "substantial.") However, given the totality of all the circumstances, the court felt "disqualification would be an extreme and unnecessary sanction here." The court relied heavily on  Nevada Yellow Cab Corp. v. 8th Judicial Dist. Ct., 152 P.3d 737 (Nev. 2007) (not a screening case). [Our note: There were lots of circumstances that we will not discuss here. If you wish to defeat disqualification in the face of a "substantial" finding, reading the opinion would be a good start.]

Conflict Uncategorized; Rule 60(b)(6) (posted May 24, 2023) Martin v. SGT, Inc., 2023 WL 3585326 (D. Utah May 22, 2023). This opinion deals largely with Plaintiff's over-the-top serious discovery violations (forgeries, etc.) and a resulting judgment against her. It also deals with Plaintiff's claim that her prior law firm had a conflict of interest because of the law firm's fee-shifting exposure to sanctions under Rule 37(b)(2)(C). The court held that the conflict here does not rise to the level of grounds for relief from the judgment against Plaintiff under Rule 60(b)(6).

Current Client (posted May 24, 2023) Foley v. Drexel Univ., Civ. No. 22-1777 (E.D. Pa. May 23, 2023). Plaintiff is suing Drexel for various employment-related violations. Plaintiff's husband ("Husband") is representing her. Drexel moved to disqualify Husband under Rule 3.7 and under Rule 1.7. The court denied the Rule 3.7 ground, finding that Drexel had not shown that Husband was a necessary witness, or that pre-trial was the stage to enforce the rule. Drexel also claimed a conflict because Husband is on Plaintiff's health insurance at Drexel, and because Husband's financial interests are otherwise intertwined with Plaintiff's. The court felt that it was not her, or defendant's, place to judge whether Plaintiff's choice of counsel was "a good, bad, or awkward one."

Expert Witness (posted May 22, 2023) Agri-Systems v. Structural Techs., LLC, 2023 WL 3481397 (D. Col. May 16, 2023). This is a dispute among contractors about what went wrong with the construction of a concrete silo. Party 1 objected to the listing of two construction expert witnesses by Party 2. In addition to their technical qualifications, Party 1 said the experts were biased because they were employed by Party 2. The court rejected the bias arguments, saying the experts' alleged bias goes to the weight of their testimony, not admissibility. The court also noted that prejudice would be less likely because the case would not be tried to a jury.

[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 at This and That.

Nothing current.

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

(posted May 30, 2023) In re Guardianship J.W., No. 21-0348 (Ia. May 26, 2023). Lawyer filed a proceeding to make himself guardian of Minor over the objections of Minor's mother ("Mother"). Lawyer had previously represented Mother, including on custody matters. The trial court dismissed the proceeding because, in part, Lawyer had a conflict of interest. The appellate court reversed, saying that dismissal was not an appropriate remedy for an ethics violation. In this opinion the Iowa Supreme Court affirmed the trial court and ruled the action should be dismissed. First, the court ruled that dismissal could be a remedy. Second, the court ruled that Iowa Rule 1.9 would apply even though Lawyer was representing himself. Last, the court held that this proceeding was substantially related to Lawyer's earlier work for Mother. [Our note: This is a long opinion containing detailed reasoning. One interesting aspect is the court's analysis of decisions from other jurisdictions, the Restatement, and the ABA's Annotated Model Rules.]

Rule 60(b)(6)

(posted May 24, 2023) Martin v. SGT, Inc., 2023 WL 3585326 (D. Utah May 22, 2023). This opinion deals largely with Plaintiff's over-the-top serious discovery violations (forgeries, etc.) and a resulting judgment against her. It also deals with Plaintiff's claim that her prior law firm had a conflict of interest because of the law firm's fee-shifting exposure to sanctions under Rule 37(b)(2)(C). The court held that the conflict here does not rise to the level of grounds for relief from the judgment against Plaintiff under Rule 60(b)(6).

Malpractice Insurance

(posted May 19, 2023) Brown Goldstein Levy LLP v. Federal Ins. Co., 2023 WL 3513693 (4th Cir. May 18, 2023). The Government was investigating Law Firm's client. The Government informed Law Firm that because Law Firm was also a subject of investigation, Law Firm had a conflict of interest. Two things followed: First the Government executed a search warrant of Law Firm's offices. Second, the Government requested that Law Firm obtain a formal conflict waiver from its client. Law Firm incurred costs in responding to the search warrant and the subsequent letter requesting a waiver. Law Firm demanded coverage and reimbursement from Defendant, its malpractice carrier. Defendant declined. Law Firm filed this case against Defendant seeking coverage. The trial court, interpreting the malpractice policy and applying Maryland law, denied the claim. In this opinion the appellate court affirmed. The policy provided coverage for monetary or similar claims, and the court found that the Government's actions were neither.

APPEALABILITY (To read full article, click here.)

Nothing current.

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

(posted May 18, 2023) Sun Knowledge, Inc. v. Osborne, No. 650648/2023 (N.Y. Sup. Ct. N.Y. County April 28, 2023). This is a suit to vacate an arbitration award. One basis was that the arbitrator allowed one lawyer to represent multiple respondents. The arbitrator found no conflict. In this opinion the court rejected that ground. "Petitioners' disagreement with that decision is just that--a disagreement."

(posted May 4, 2023) Equicare Health Inc. v. Varian Med. Sys., Inc., 2023 WL 3089093 (N.D. Cal. April 19, 2023). Commercial dispute between Equicare and Varian submitted to AAA arbitration. Three arbitrators were selected. One of the arbitrators ("No. 1") failed to include a disclosure that the lawyer for Varian had, five years earlier, represented No. 1 and No. 1's law firm in an unrelated matter. The arbitration panel found in Varian's favor. Equicare brought this proceeding to vacate the arbitration award. Construing the Federal Arbitration Act and federal court cases under that act, the court, in this opinion, ordered the arbitration award vacated because of the non-disclosure.
(posted May 2, 2023) New England Wire Techs. Corp. v. Cooner Sales Co., LLC, 2023 WL 3107776 (Cal. App. Unpub. April 27, 2023). Caution: This opinion involves a 14-year AAA arbitration and the unique relationship between arbitration and court litigation in California. It involves such issues as whether a law firm can handle arbitration when a lawyer in the law firm is an "active" arbitrator in other cases. Given the narrow California focus, we will not discuss the opinion further. California lawyers with arbitration practices may find the opinion useful.

BANKRUPTCY (To read full article, click here.)

(posted May 15, 2023) In re HRB Sundown, Inc., 2023 WL 3294623 (D. Del. May 5, 2023). Chapter 11. Pre-petition, Law Firm had represented Debtor, and, post-petition, Law Firm was retained as "special corporate counsel under § 327(e)" of the Bankruptcy Act. The plan provided for appointment of a trustee of a liquidating trust to "prosecute certain retained" cases, and the appointment of a plan administrator to manage everything else. The liquidating trustee brought this action against another company related to Debtor. Law Firm appeared for the defendant. The liquidating trustee moved to disqualify Law Firm, claiming, in effect, that the trustee "stepped into the shoes" of Debtor, and thus, the trustee was a former client of Law Firm. In this opinion the bankruptcy judge denied the motion to disqualify because, the way the plan was structured, the liquidating trustee's duties were limited, and most duties were in the hands of the plan administrator. The court admitted that case law on this issue is "scant."

BANKS/TRUST DEPARTMENTS (To read full article, click here.)

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

Screening

(posted May 26, 2023) Octaform Sys., Inc. v. Johnston, 2023 WL 3645965 (D. Nev. May 25, 2023). Trade secret case. Firm P represents Plaintiffs; Firm D represents Defendants. Lawyer was an associate at Firm D from 2015 to 2018. Lawyer left Firm D in 2018 to join Firm C (C not in this case). Lawyer left Firm C to join Firm P in 2022. Because Lawyer had worked on this case at Firm D, Firm P screened Lawyer from this case. Nevertheless, Defendants moved to disqualify Firm P. In this opinion the magistrate judge denied the motion to disqualify. Because Lawyer did a lot of work on this case at Firm D, the judge found that Lawyer's role was "substantial." (The Nevada screening rule normally invalidates a screen when the lateral's work was "substantial.") However, given the totality of all the circumstances, the court felt "disqualification would be an extreme and unnecessary sanction here." The court relied heavily on  Nevada Yellow Cab Corp. v. 8th Judicial Dist. Ct., 152 P.3d 737 (Nev. 2007) (not a screening case). [Our note: There were lots of circumstances that we will not discuss here. If you wish to defeat disqualification in the face of a "substantial" finding, reading the opinion would be a good start.]

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

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

Nothing current.

COMMERCIAL NEGOTIATIONS (To read full article, click .)

Nothing current.

CORPORATIONS (To read full article, click here.)

(posted May 19, 2023) Kaikov v. Yadgarov, No. 2021-04780, Index No. 600362/16 (N.Y. App. Div. 2d Dept. May 17, 2023). Plaintiff is Managing Partner of LLC. Somehow, members having a minority interest in LLC, caused LLC's property to be sold to Buyer. Plaintiff, represented by Law Firm, is suing the minority members and Buyer for breach of fiduciary duty. Defendants moved to disqualify Law Firm because Law Firm had earlier represented LLC, Plaintiff and the minority members in a related transaction. The trial court granted the motion. In this opinion the court affirmed, citing, primarily, Deerin v. Ocean Rich Foods, LLC, 71 N.Y.S.3d 123 (2d Dept. 2018). The court also sustained disqualification on Rule 3.7 grounds.

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

Nothing current.

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

(posted May 24, 2023) Foley v. Drexel Univ., Civ. No. 22-1777 (E.D. Pa. May 23, 2023). Plaintiff is suing Drexel for various employment-related violations. Plaintiff's husband ("Husband") is representing her. Drexel moved to disqualify Husband under Rule 3.7 and under Rule 1.7. The court denied the Rule 3.7 ground, finding that Drexel had not shown that Husband was a necessary witness, or that pre-trial was the stage to enforce the rule. Drexel also claimed a conflict because Husband is on Plaintiff's health insurance at Drexel, and because Husband's financial interests are otherwise intertwined with Plaintiff's. The court felt that it was not her, or defendant's, place to judge whether Plaintiff's choice of counsel was "a good, bad, or awkward one."

(posted May 13, 2023) In re Jackson, 2023 WL 3394129 (D. Conn. May 10, 2023) This opinion is by a Connecticut bankruptcy judge largely construing New York ethics rules. One's first reaction might be that it is, therefore, of limited precedential value. But, the opinion is long (37 pages, 280 footnotes) and very thoughtful. It also features noted New York ethics experts on both sides whose opinions appear to be reasonable. Their approaches to the evidence appear to be a primer on how  expert witnesses should deal with conflicting evidence, and how a thoughtful judge should balance their opposing views. The opinion decides whether the former law firm ("Law Firm") for Debtor (a rap music artist) should recover pre-petition fees. One issue is whether an engagement agreement between Debtor and Law Firm complied with New York Rules 5.1 and 5.2. In this opinion the bankruptcy judge ruled the letter was sufficient. The other issue involved whether Law Firm had a conflict that disqualified it from recovering the fees. The conflict involved Law Firm's relationship with co-counsel. Co-counsel, in addition to representing Debtor, represented another rap music artist, arguably Debtor's competitor. A sub issue was whether Law Firm should have called this other artist as an adverse witness, thereby creating a conflict for Law Firm. The experts took opposing (and reasonable) views of the evidence on this. The court found that there was no disqualifying conflict, and concluded that Law Firm should recover its fees.

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

Nothing current.

ENJOINING CONFLICTS (AND OTHER NON-TRADITIONAL REMEDIES) (To read full article, click here.)

(posted May 18, 2023) Asurion, LLC v. Bryan Cave Leighton Paisner LLP, 2023 WL 3484201 (M.D. Tenn. Nashville Div. May 16, 2023). Asurion purchased another company ("Acquired Co") from Acquired Co's owners ("Owners"). Asurion and Owners dispute certain of Asurion's post-purchase conduct and are in arbitration. Law Firm represents Owners in the arbitration. Asurion brought this action to enjoin Law Firm from representing Owners in the arbitration, claiming Law Firm has a conflict. Prior to the purchase a lawyer in Law Firm ("Lawyer") had arguably represented Asurion in matters arguably related to the arbitration. In this opinion the court granted Asurion a preliminary injunction. The court found that Lawyer had represented Asurion and that the representation was substantially related to the arbitration. Those findings are very fact-specific. The finding as to substantial relationship involved "playbook" factors (e.g. "internal thinking and sense of urgency"). The court noted that Tennessee's screening provision applies to laterals, not the case here. The court ordered Asurion to post security in the amount of $100,000. A very key point is that no one seems to have questioned the propriety of an injunction proceeding.

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

(posted May 22, 2023) Agri-Systems v. Structural Techs., LLC, 2023 WL 3481397 (D. Col. May 16, 2023). This is a dispute among contractors about what went wrong with the construction of a concrete silo. Party 1 objected to the listing of two construction expert witnesses by Party 2. In addition to their technical qualifications, Party 1 said the experts were biased because they were employed by Party 2. The court rejected the bias arguments, saying the experts' alleged bias goes to the weight of their testimony, not admissibility. The court also noted that prejudice would be less likely because the case would not be tried to a jury.

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

Playbook

(posted May 18, 2023) Reid v. Costco Wholesale Corp., No. 8:23-cv-00255-FWS-JDE (C.D. Cal. April 20, 2023). Plaintiff fell in Costco's store and sues for injuries. Costco moved to disqualify Plaintiff's law firm ("Law Firm") because Law Firm employees Lawyer, who had at another firm represented Costco in 21 injury cases (not this matter), including "slip-and-fall" cases. In this opinion the court granted the motion. The court discussed "playbook" at some length and concluded that some playbook information is more important than other. There was just too much of it here. The court also found that Law Firm's attempt to screen Lawyer was inadequate.

(posted May 15, 2023) Doe v. JPMorgan Chase Bank, N.A., 2023 WL 3383724 (S.D.N.Y. May 11, 2023). In this class action Plaintiffs are accusing Bank of looking the other way from Jeffrey Epstein's sex trafficking while doing business with Epstein ("supporting" his "venture"). Several plaintiffs moved to disqualify Law Firm from representing Bank in this case. Law Firm had represented an anti-sex-trafficking organization in filing an amicus brief in support of a claim by a woman who was trying to circumvent Epstein's 2008 Florida non-prosecution agreement. In this opinion the court denied the motion to disqualify, finding the two matters not substantially related. The court also questioned the plaintiffs' standing (not being former clients of Law Firm), and the slowness with which the plaintiffs in this case raised the conflict matter.

(posted May 13, 2023) In re Gutierrez & NRG Energy, Inc., 2023 WL 3356701 (Tex. App. 1st Dist. May 11, 2023). In this Texas proceeding, parties in a Louisiana case seek, through a letter rogatory, the deposition of a Texas resident, Mauricio Gutierrez. The Texas trial court ordered the deposition to proceed. In this opinion the Texas appellate court affirmed. Much of the opinion deals with application of Texas' "apex deposition" rule. The parts relevant to this audience deal with whether the law firm for the party seeking the deposition had a former client relationship with Gutierrez and his related organizations and whether an earlier proceeding was substantially related to this one. The relationships are exceedingly complex, fact-specific, and of doubtful precedential value (Texas appellate court citing Texas cases exclusively). We will leave it at that. If the above concepts interest you, read the opinion.

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

Nothing current.

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

Nothing current.

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

Nothing current.

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

(posted May 17, 2023) Federal Ins. Co. v. Mintz, 2023 WL 3450502 (2d Cir. May 15, 2023). Federal brought this interpleader action against a number of parties, including PixarbioBio Corp. and several of its law firms. Federal is requesting the court to determine where the proceeds of a Federal's "securities liabilities" policy should be paid. One of the parties was a law firm (The Mintz Fraade Law Firm P.C.). Other parties in the case claimed Mintz Fraade should not receive any of the funds because it had a conflict of interest. This whole set of circumstances began when the SEC commenced an investigation of Pixarbio and several of its principals. The SEC told Mintz Fraade that it, too, was a party of interest in the investigation. Nevertheless, Mintz Fraade represented Pixarbio and two officers in the investigation. The trial court ruled that the conflict was unwaivable and that Mintz Fraade should receive no share of the Federal payment, Federal Ins. Co. v. Pixarbio Corp., 2022 WL 623735 (S.D.N.Y. March 3, 2022). In Federal Ins. Co. v. Pixarbio Corp., 2022 WL 1689636 (S.D.N.Y. May 26, 2022), the court denied Mintz Fraade's motion for reconsideration. In this opinion the Second Circuit affirmed the trial court's decisions.

(posted May 10, 2023) Hawk Tech. Sys., LLC v. Castle Retail, LLC, 2023 WL 3312637 (W.D. Tenn. May 8, 2023). Patent infringement case. Law Firm for Plaintiff moved to withdraw after the court dismissed the case and Defendant moved for attorneys fees jointly between Plaintiff and Law Firm. In this opinion the court denied the motion to withdraw "at this juncture." The court noted that Law Firm likely has a conflict, but that, here, the conflict is cured by Plaintiff's retention of alternative counsel. Thus, Plaintiff can "adequately defend it own interest." [Our note: We have no experience in how awards of attorneys fees in patent cases are resolved. It would appear that the court ordered Law Firm to remain in the case to facilitate the possible award of fees against Law Firm.]

Lawyer/Defendant

(posted May 2, 2023) Perez v. JP Morgan Chase Bank N.A., 2023 WL 3119950 (D.N.J. Unpub. April 27, 2023). This is a questionable pro se fraud action against Bank and others affiliated with Bank, including Bank's law firm ("Law Firm"). Among other things, the plaintiffs moved to disqualify Lawyer from representing the defendants in this case because Lawyer is a member of defendant Law Firm. In this opinion the court denied the motion to disqualify. The court said without more that relationship does not disqualify Lawyer, citing a similar result in J.R.S. Holdings, LLC v. JES Props., LLC, No. A-5986-08T2, 2010 WL 5428870 (N.J. App. Div. Aug. 17, 2010).

(posted May 2, 2023) Progressive Direct Ins. Co. v. Eighth Judicial Dist., 2023 WL 3142527 (Nev. Unpub. April 27, 2023). A party opposing Progressive listed Lawyer as an expert witness on insurance company bad faith issues. Progressive moved to strike Lawyer from testifying because Lawyer had represented Progressive-related companies for "over 20 years." In this one-page opinion the court denied Progressive's petition for mandamus, saying that Progressive had "an adequate legal remedy via an appeal from a final judgment."

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

Nothing current.

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

OPPOSING LAWYERS NEGOTIATING A LAW PRACTICE MERGER (To read full article, click here.)

Nothing current.

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

Nothing current.

STANDING (To read full article, click here.)

Nothing current.

(posted May 17, 2023) Federal Ins. Co. v. Mintz, 2023 WL 3450502 (2d Cir. May 15, 2023). To read about the case, go to "Joint . . ." above.

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.)

Nothing current.