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FREIVOGEL ON CONFLICTS WHAT'S NEW Items posted here during the past thirty days will also appear on this What's New page. Items posted within the past ten days will appear In Ten Day Bulletin immediately below. Items older than ten days but less than 30 days will be posted in the Thirty-Day Holding Area, which follows. Ten Day Bulletin Important Note on Web Security Since April 2023, this Web site is "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. Bankruptcy (posted May 15, 2024) In re Invitae Corp., No. 3:24-bk-11362 (D.N.J. May 7, 2024). Warning! We do not have a written order or opinion regarding the following. Our information is from quoted material from a reporter who, evidently, was at the hearing in question. At the hearing the bankruptcy judge approved the retention of Law Firm to represent the Chapter 11 debtor. A "committee" lawyer had objected to the retention because Law Firm had represented the debtor's "largest secured creditor" on other matters. In granting the retention the bankruptcy judge noted that the advance conflict waivers obtained by Law Firm were adequate to permit the representation. [Stay tuned for a written order or opinion, which should reflect the actual circumstances and what really happened. On Pacer, we presume, you can find Document 454, filed on May 6, 2024, which is the stipulation of Debtors, Unsecured Creditors, and U.S. Trustee. Among other things are advance waivers of the largest secured creditor and Debtors.] Conflict Uncategorized (posted May 14, 2024) Est. of McClain v. Kilmer, Lane & Newman, LLP, No. 23CA0379 (Col. App. Div. 2 May 9, 2024). In this opinion the court considered the extent to which, if any, a law firm is entitled to fees under a contingent fee agreement when the client has fired the law firm mid-stream. The problem here is that when the representation began, the law firm had an arguable conflict of interest. The analysis is highly fact-specific, and the facts are convoluted. The case is more about problematic fee arrangements and less about conflicts of interest, so we will leave it at that. Miscellaneous; Confidentiality (posted May 8, 2024) ABA Op. 511 (May 8, 2024). This opinion discusses the interplay of Model Rule 1.6 and the use of information technology -- listservs in particular. Put simply, don't post anything a client would not want posted. This includes items not mentioning the identity of a client, but which would enable an astute reader to figure out that identity. Former Client; Playbook (posted May 8, 2024) McGurgan v. Wal-Mart Stores Tex., LLC, No. SA-23-CV-01147-XR (W.D. Tex. San Antonio Div. May 7, 2024). Slip-and-fall case. Defendant moved to disqualify two of Plaintiff's lawyers because those lawyers had previously represented Defendant in many premises liability cases. Defendant made a robust playbook argument (procedures, attitudes, settlement strategies, etc.). In this opinion the court denied the motion, saying Defendant failed to allege any specifics entitling them to disqualification. Neither party used the term "playbook." Former Client (posted May 8, 2024) N.Y. Op. 1265 (April 26, 2024). Lawyer in private practice previously worked for Legal Aid Society. Lawyer now seeks, in a new matter, to be adverse to Party A. While Lawyer was at Legal Aid, other lawyers at Legal Aid, but not Lawyer, were representing Party A. Lawyer may handle the new matter unless Lawyer had obtained Party A's confidences while at Legal Aid and those confidences were substantially related to the new matter. The opinion discussed application of New York Rules 1.6 and 1.9. Former Client (posted May 6, 2024) Consumers Beverages, Inc. v. Kavcon Dev. LLC, No. 48 CA 23-00199 (N.Y. App. Div. 4th Dep't May 3, 2024). CBI is suing Kavcon to collect on a $3.8 million note. CBI and Kavcon were created by the same family patriarch and are currently run by various members of the patriarch's family. Law Firm represented both companies when the note was negotiated and signed. Law Firm is representing only CBI in this case. Kavcon moved to disqualify Law Firm. The trial court denied the motion. In this opinion the appellate court affirmed. The only issue was substantial relationship. The court found none. This action involves only the collection of a debt. The previous representation arose out of a claimed breach of fiduciary duty of one of the family members. Thirty Day Holding Area MISCELLANEOUS ETHICS AND LIABILITY NEWS [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. Confidentiality (posted May 8, 2024) ABA Op. 511 (May 8, 2024).
This opinion discusses the interplay of Model Rule 1.6 and the use of
information technology -- listservs in particular. Put simply, don't
post anything a client would not want posted. This includes items not
mentioning the identity of a client, but which would enable an astute
reader to figure out that identity. [Note: These, too, will appear at the This and That pages.] (posted May 14, 2024) Est. of McClain v. Kilmer, Lane & Newman, LLP,
No. 23CA0379 (Col. App. Div. 2 May 9, 2024). In this opinion the court
considered the extent to which, if any, a law firm is entitled to fees
under a contingent fee agreement when the client has fired the law firm
mid-stream. The problem here is that when the representation began, the
law firm had an arguable conflict of interest. The analysis is highly
fact-specific, and the facts are convoluted. The case is more about
problematic fee arrangements and less about conflicts of interest, so we
will leave it at that. Rule 1.11 (posted April 27, 2024) Taylor v. Arkansas, No.
CR-23-630, 2024 Ark. 68 (April 25, 2024). Pulaski County is prosecuting
Taylor for incest and rape. The Digby Firm is defending. About a year
after these charges were brought, Lawyer Ivy joined the Digby Firm and
began working on this case. The state moved to disqualify Ivy and the
Digby Firm. The trial court granted the motion. In this opinion the
Supreme Court affirmed. Ivy came from the Lonoke County prosecutor's
office, where Ivy had contact with Taylor and the same victim, involving
similar conduct. This opinion "checks all the boxes" under Rule 1.11.
Construed broadly, the matters were the same. Further, the firm did not
screen Ivy from this case, and, naturally, gave no notice of a screen
required by Rule 1.11. 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 May 15, 2024) In re Invitae Corp., No. 3:24-bk-11362
(D.N.J. May 7, 2024). Warning! We do not have a written order or opinion
regarding the following. Our information is from quoted material from a
reporter who, evidently, was at the hearing in question. At the hearing
the bankruptcy judge approved the retention of Law Firm to represent
the Chapter 11 debtor. A "committee" lawyer had objected to the
retention because Law Firm had represented the debtor's "largest secured
creditor" on other matters. In granting the retention the bankruptcy
judge noted that the advance conflict waivers obtained by Law Firm were
adequate to permit the representation. [Stay tuned for a written
order or opinion, which should reflect the actual circumstances and what
really happened. On Pacer, we presume, you can find Document 454, filed on May 6, 2024, which
is the stipulation of Debtors, Unsecured Creditors, and U.S. Trustee.
Among other things are advance waivers of the largest secured creditor
and Debtors.] BANKS/TRUST DEPARTMENTS (To read full article, click here.) Nothing current. BOARD POSITIONS (To read full article, click here Nothing current. CHANGING FIRMS - SCREENING (To read full article, click here.) (posted April 26, 2024) HDMI Licensing Administrator, Inc. v. Availink Inc.,
No. 22-cv-06947-HSG (N.D. Cal. April 22, 2024). This case did not involve a lawyer changing firms, but does involve screening. To read about it, go to "Former Client," below. CLASS ACTIONS (To read full article, click here.) (posted April 29, 2024) Reynolds v. Mercy Inv. Servs., Inc., 2024
WL 1740870 (E.D.N.Y. April 23, 2024). In a lengthy discussion of Second
Circuit authorities, the court held that a class representative could
not also represent the class as class counsel. Thus, the court dismissed
the class claims. (posted April 27, 2024) York v. St. Elizabeth Med. Ctr., Inc.,
2024 WL 1723073 (E.D. Ky. April 22, 2024). Class
Representative/Plaintiff claims in this action that Defendant Hospital
overcharged her for delivery of her baby. In this opinion the court
denied, on several grounds, Plaintiff's motion to certify a class. One
of the grounds was she was not an adequate class representative because
she was a paralegal in, and employee of, the class counsel law firm. [Fun fact: The author of this opinion, Judge David Bunning, is the son of hall-of-fame pitcher, Jim Bunning.] Nothing current. 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.) Nothing current. CORPORATE FAMILIES (To read full article, click here.) Nothing current. CRIMINAL PRACTICE (To read full article, click here.) Nothing current. CURRENT CLIENT (To read full article, click here.) Nothing current. DERIVATIVE ACTIONS (To read full article, click here.) Nothing current. ENJOINING CONFLICTS (AND OTHER NON-TRADITIONAL REMEDIES) (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 May 8, 2024) McGurgan v. Wal-Mart Stores Tex., LLC,
No. SA-23-CV-01147-XR (W.D. Tex. San Antonio Div. May 7, 2024).
Slip-and-fall case. Defendant moved to disqualify two of Plaintiff's
lawyers because those lawyers had previously represented Defendant in
many premises liability cases. Defendant made a robust playbook argument
(procedures, attitudes, settlement strategies, etc.). In this opinion
the court denied the motion, saying Defendant failed to allege any
specifics entitling them to disqualification. Neither party used the
term "playbook." (posted May 8, 2024) N.Y. Op. 1265 (April 26, 2024). Lawyer in
private practice previously worked for Legal Aid Society. Lawyer now
seeks, in a new matter, to be adverse to Party A. While Lawyer was at
Legal Aid, other lawyers at Legal Aid, but not Lawyer, were representing
Party A. Lawyer may handle the new matter unless Lawyer had obtained
Party A's confidences while at Legal Aid and those confidences were
substantially related to the new matter. The opinion discussed
application of New York Rules 1.6 and 1.9. (posted May 6, 2024) Consumers Beverages, Inc. v. Kavcon Dev. LLC,
No. 48 CA 23-00199 (N.Y. App. Div. 4th Dep't May 3, 2024). CBI is suing
Kavcon to collect on a $3.8 million note. CBI and Kavcon were created
by the same family patriarch and are currently run by various members of
the patriarch's family. Law Firm represented both companies when the
note was negotiated and signed. Law Firm is representing only CBI in
this case. Kavcon moved to disqualify Law Firm. The trial court denied
the motion. In this opinion the appellate court affirmed. The only issue
was substantial relationship. The court found none. This action
involves only the collection of a debt. The previous representation
arose out of a claimed breach of fiduciary duty of one of the family
members. (posted May 2, 2024) Richard v. Wyoming State Bar, No. S-23-0155
(Wyo. April 26, 2024). Over the years, Lawyer Richard has been the
subject of disciplinary proceedings relating to her litigation conduct.
In at least one of those proceedings Lawyer Reeves represented Richard
"briefly." Reeves began acting as Special Bar Counsel against Richard in
this proceeding, which also involves alleged litigation misconduct.
Richard moved to disqualify Reeves and the Office of Bar Counsel. The
Review and Oversight Committee ("ROC") disqualified Reeves but not the
Office of Bar Counsel ("OBC"). Richard appealed the latter holding. In
this opinion the supreme court reversed and ordered ROC to appoint "a
new, conflict-free special bar counsel" to start over on the pending
complaints. In a lengthy, fact-intensive, discussion of the substantial
relationship test, the court found that the matters were substantially
related. Because OBC had not complied with Wyoming's screening rule,
Reeves' conflict was imputed to the entire OBC, and the court instructed
OBC not to share Reeves' work product with new bar counsel. [Our note: We have simplified what happened, but you get the idea.] (posted April 26, 2024) HDMI Licensing Administrator, Inc. v. Availink Inc.,
No. 22-cv-06947-HSG (N.D. Cal. April 22, 2024). Plaintiff is claiming
Defendant is infringing its trademark. Defendant has filed an antitrust
counterclaim. The market is "consumer electronic HDMI." Plaintiff moved
to disqualify one of Defendant's law firms ("Law Firm") because Law Firm
has, in the past, represented Plaintiff in antitrust matters. In this
opinion, the court granted the motion. Law Firm has offices in China and
in New York. Law Firm's New York office is representing Defendant in
this case. Law Firm's China lawyers represented Plaintiff in the earlier
matters. The court found that, notwithstanding the differences between
Chinese and American competition law, the matters were "substantially
related." Among other things, both representations involve an "Adopter
Agreement," which we will not detail here (the analysis was highly
fact-intensive). Law Firm claimed that it screened the Chinese matter
from this one. In an extensive discussion of Kirk v. First Am. Title Ins. Co.,
108 Cal. Rptr. 3d 620 (Cal. App. 2010), and related cases, the court
said the screen was late. Moreover, the distance of the Chinese practice
from the New York practice was not enough to overcome the presumption
of prejudice. (posted April 23, 2024) Gov't of Nunavut v. Stantec Architecture Ltd.,
2024 NUCJ 9 (CanLII) (Nunavut Ct. J. April 19, 2024). Gov't is suing
Stantec for its architectural work on a new arena. Earlier, Gov't
claimed in arbitration that Contractor did defective construction work
on the arena. Stantec cooperated with Gov't's law firm in the
arbitration. In connection with that cooperation, the parties agreed
that Stantec would not be a client of the lawyers on the case. The
arbitration settled. Stantec moved to disqualify Gov't's law firm in
this case. In this opinion the court denied the motion. Using a
"near-client" analysis, the court noted that Stantec had to have
anticipated that this case would probably follow and would govern itself
accordingly during its arbitration work regarding its confidences. (posted April 23, 2024) Dye & Durham Ltd. v. Ingarra, 2024 FCA 76 (CanLII) (Fed. Ct. App. April 18, 2024). Defendant, Dye & Durham, sells software for law firms. Plaintiffs brought this action under Section 45 of Canada's Competition Act. Defendant moved to disqualify Plaintiffs' law firm. The trial court denied the motion. In this opinion the appellate court affirmed. Given the dizzying array of companies involved and movements of lawyers, we cannot do the case justice in this format. The basics: (1) the appellate court held that representations under Sections 45 (criminal) and 79 (civil) of the Competition Act are "sufficiently related" for conflict purposes; and (2) disqualification was not appropriate here because there was no showing that one of the suspect lawyers had, in fact, conveyed Defendant's confidences to Plaintiffs' law firm. GOVERNMENT ENTITIES - SUING ONE PART/REPRESENTING ANOTHER PART (To read full article, click here.) Nothing current. Nothing current. INITIAL INTERVIEW - HEARING TOO MUCH (To read full article, click here.) Nothing current. INSURANCE DEFENSE (To read full article, click here.) Reservation of Rights (posted May 2, 2024) Cincinnati Ins. Co. v. Kansas State Univ. Found.,
2024 WL 1856316 (D. Kan. April 29, 2024). Forrest Geist is claiming
that KSUF is stealing his intellectual property. KSUF tendered the
matter to its CGL carrier ("InsCo"). InsCo responded that it would
defend under a reservation of rights. KSUF and InsCo disagree on whether
InsCo must pay for KSUF's retained counsel. In this opinion the court
ruled that InsCo could select defense counsel at its expense and that
KSUF could hire its own counsel, but that InsCo is not obligated to pay
for the latter. The opinion does not lay out how InsCo's retained firm
might be able to structure the defense to trigger non-coverage under the
policy. But, the court does cite language from other cases that the
"only legal responsibility [of the firm selected by the carrier] is to
represent the interests of the insured." [Our note: What happens if
InsCo's retained counsel, in structuring a defense, perceives an
opportunity to jeopardize coverage under the policy?] INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.) Nothing current. Nothing current. JOINT/MULTIPLE REPRESENTATION (To read full article, click here.) Nothing current. LAWYER AS EXPERT WITNESS OR CONSULTANT (To read full article, click here.) Nothing current. Nothing current. MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.) Nothing current. OF COUNSEL (To read full article, click here.) Nothing current. OPPOSING LAWYERS NEGOTIATING A LAW PRACTICE MERGER (To read full article, click here.) Nothing current. PARTNERSHIPS (INCLUDING LIMITED PARTNERSHIPS) (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. TRADE (AND OTHER) ASSOCIATIONS (To read full article, click here.) Nothing current. UNDERLYING WORK PROBLEM (To read full article, click here.) 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.) Nothing current. Home/Table of Contents Website powered by Network Solutions® |
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