Monday, May 11, 2015
The case was described in this post by Alyson Palmer of the Daily Report
As recounted in briefs for both sides, the advertisement said the government had cited a nursing facility, Heritage Healthcare of Toccoa, "for failing to assist those residents who need total help with eating/drinking, grooming and personal and oral hygiene." The ad rhetorically asked whether readers' loved ones had suffered bedsores, broken bones, unexplained injuries or death. Providing the firm's contact information, the ad invited anyone concerned that a loved one was being "neglected or abused" at the facility to call McHugh Fuller.
The day after the ad ran, the owner of the facility, PruittHealth-Toccoa, sued the law firm in the Mountain Circuit Superior Court. Beside citing Georgia legal ethics rules on advertising and contacting prospective clients, the complaint alleged the ad had violated Georgia's version of the Uniform Deceptive Trade Practices Act because it was false and misleading. The nursing home company initially requested damages but later amended its complaint to seek only injunctive relief.
Superior Court Judge B. Chan Caudell promptly granted PruittHealth's request for a temporary restraining order prohibiting the law firm from running similar advertisements, then set the case for a hearing a little less than a month later.
In its defense, the firm pointed to a 2012 inspection report by the Department of Health and Human Services' Centers for Medicare & Medicaid Services. That report listed multiple deficiencies at the site under the heading "Assist those residents who need total help with eating/drinking, grooming and personal and oral hygiene." In particular, the document referred to one resident not having access to mouthwash in her room and another resident's long, dirty fingernails.
At the close of the hearing, Caudell found the ad was misleading and deceptive because it said the nursing facility had been cited "for failing to assist" residents in certain areas, while the government report did not use that "failing to" language in its report. He later issued a written order prohibiting McHugh Fuller from publishing or causing the ad to be published in the future and giving the firm 20 days to make sure any electronic posting of the ad by the newspaper was removed.
The law firm appealed to the Georgia Supreme Court, raising several arguments. The firm says that Caudell abused his discretion in finding the ad false and misleading. But the law firm also raises a procedural argument, saying it didn't have advance notice that the judge was going to make a final decision in the case based on the May 2014 hearing. McHugh Fuller later filed a separate appeal complaining that Caudell had excluded from the appellate record materials that the law firm thought should be included.
The court found that the trial court had erred in granting a permanent injunction without clear notice to the law firm that such an order was contemplated. (Mike Frisch)
Friday, May 1, 2015
Claims by the heirs to the Johnson & Johnson fortune against Proskauer Rose LLP on allegations of fraud, excessive legal fees and unjust enrichment may go forward, according to a decision yesterday by the New York Appellate Division for the First Judicial Department.
The court affirmed dismissal of the legal malpractice claim.
The law firm had initiated discussions of the possible sale of long-held J & J stock. The plaintiffs agreed to consider the law firm's proposal.
The issue involved a complex series of steps recommended "to effectuate the tax [avoidance] strategy."
Between October 13, 2000 and November 30, 2000, plaintiffs took the complex series of steps recommended by TDG [a business that developed tax avoidance strategies] and Proskauer to effectuate the tax strategy. They paid TDG a total of $1,379,650 in fees and costs, of which they allege that $425,000 was paid by TDG to Proskauer to cover its legal fee.
In June 2001, Proskauer sent plaintiffs a 63-page opinion letter, dated December 29, 2000, which concluded that "it was more likely than not" that the scheme, already executed, would not generate any gain or loss, or accrue any penalties if it was disallowed by the IRS.
In January 2002, the IRS announced a tax amnesty program which allegedly would have been applicable to plaintiffs' situation. However, Proskauer did not notify plaintiffs of that program. In April 2006, the IRS sent plaintiffs a letter requesting documents and detailed information about the tax avoidance strategy they had implemented over five years earlier. Plaintiffs sought counsel from Waxenberg, but he informed them that Proskauer was conflicted by its representation of TDG. Concerned that the agency would ultimately challenge the scheme and assess penalties against them, plaintiffs secured a tolling agreement from Proskauer which, after a later extension, tolled the statute of limitations for any claims against Proskauer up to and including July 31, 2011. Ultimately, the IRS ruled the shelter transaction was not entitled to favorable capital gains tax treatment and assessed plaintiffs back taxes, penalties and interest amounting to millions of dollars.
In December 2010, plaintiffs became aware of a decision in a federal case in Massachusetts District Court (Fidelity Intl. Currency Advisor A Fund, LLC v United States, 747 F Supp 2d 49 [D Ma 2010]). That case was brought by a former Proskauer client who had executed a tax avoidance plan similar to that recommended to plaintiffs by Proskauer and Akselrad. The District Court, after a 44-day trial, issued findings of fact and conclusions of law which stated that the attorneys "agreed in advance to provide favorable legal opinions in order to induce taxpayer-investor" to get involved in the shelter opportunity, and that Proskauer and another law firm had "derived substantial profit from the promotion and sale of the tax shelter strategy, and therefore had a financial interest in upholding the strategy" (747 F Supp 2d at 212, 213).
In July 2011, plaintiffs commenced this action against defendants.
this Court has stated that, where an attorney enters into a business transaction with a client whereby the two parties' interests may at some point diverge, the ethics rules place on the attorney the burden of obtaining the client's consent, after full disclosure, "irrespective of the sophistication of the client" (Forest Park Assoc. Ltd. Partnership v Kraus, 175 AD2d 60, 62 [1st Dept 1991] [holding that law firm should have been disqualified from representing the plaintiff in a litigation, which was an entity in which 49 of its partners were investors, where the firm had previously represented the defendant in connection with the transaction in which the entity was formed]; accord Schlanger v Flaton, 218 AD2d 597, 602-603 [1st Dept 1995]). Accordingly, defendants were required to place plaintiffs' interests above all else, without regard to their perceived pedigrees, fortunes or business savvy.
Indeed, the mere facts that plaintiffs were wealthy and could afford high-priced counsel are insufficient for us to draw the conclusion that, as a matter of law, they should have known that there was almost a 50% possibility that the tax strategy would not succeed. On this record, defendants cannot establish the specific backgrounds of plaintiffs and their familiarity with the tax code and IRS practices such that defendants can argue that plaintiffs were not justified in relying on defendants' advice. Ironically, this argument by defendants bolsters plaintiffs' excessive fee claim, since it invites the question why, if they were truly so sophisticated, they needed a $425,000 opinion from Proskauer to convince them to pursue the TDG/Proskauer strategy. Further, it is worth noting that one of the things a sophisticated investor is presumed to know to do before entering a transaction is to consult with its attorney (see Stuart Silver Assoc. v Baco Dev. Corp., 245 AD2d 96, 99 [1st Dept 1997]). That is precisely what plaintiffs did, and they were entitled to rely on defendants' advice.
Finally, plaintiffs' claim for punitive damages properly survived dismissal. Defendants' conduct is alleged to have been directed at a wide swath of clients, and the first amended complaint sufficiently alleges intentional and malicious treatment of those clients as well as a "wanton dishonesty as to imply a criminal indifference to civil obligations" (Walker v Sheldon, 10 NY2d 401, 405 ). Indeed, although we offer no opinion regarding whether the particular scheme at issue was criminal in its manipulation of the tax laws, plaintiffs have demonstrated that similar tax avoidance schemes resulted in the indictments of some of their promoters. Accordingly, the demand for punitive damages is adequately stated. Defendants cite Denenberg v Rosen (71 AD3d 187 [1st Dept 2010], lv dismissed 14 NY3d 910 ) for the purported proposition that an attorney's involvement in promoting an unsuccessful tax avoidance scheme can never support a claim for punitive damages. However, this Court made no such declaration in that case. Nor did this Court find in Denenberg that the pension plan at issue was generally defective. Rather, it held that "it was the operation of plaintiff's particular plan that caused the problems with the IRS" (71 AD3d at 195) (emphasis added).
Friday, January 23, 2015
The Washington State Supreme Court has held
The city of Yakima claims the protection of statutes that were designed to protect the rights of those who engage in First Amendment protected communicative activity. U.S. CONST. amend. I. Those statutes-Washington's "anti -SLAPP" laws-protect speakers against frivolous, speech-chilling lawsuits. We hold that a governmental entity like Yakima cannot take advantage of the anti-SLAPP statutes at least where, as here, the challenged lawsuit is not based on the government's own communicative activity. We reverse the Court of Appeals' decision to dismiss as moot Yakima's appeal of the trial court's decision to deny Yakima's anti-SLAPP motion. Instead, we hold that the case is ripe for review and reinstate the trial court's decision to deny Yakima's antiSLAP motion.
The case involves an employment claim by the police officer contending that he had been subjected to a hostile workplace as a result of internal investigations into complaints filed by fellow officers. (Mike Frisch)
Thursday, January 15, 2015
The Florida Supreme Court has approved an ethics opinion dealing with whether providing medicaid advice violates prohibitions on the unauthorized practice of law
the Florida Bar Elder Law Section’s Unlicensed Practice of Law Subcommittee petitioned the Florida Bar’s Standing Committee on the Unlicensed Practice of Law (Standing Committee) for an advisory opinion on whether it constitutes the unlicensed practice of law for a nonlawyer to engage in the following Medicaid planning activities leading up to the Medicaid application: (1) drafting of personal service contracts; (2) preparation and execution of qualified income trusts; or (3) rendering legal advice regarding the implementation of Florida law to obtain Medicaid benefits.
It is the opinion of the Standing Committee that it constitutes the unlicensed practice of law for a nonlawyer to draft a personal service contract and to determine the need for, prepare, and execute a Qualified Income Trust including gathering the information necessary to complete the trust. Moreover, a nonlawyer should not be authorized to sell personal service or Qualified Income Trust forms or kits in the area of Medicaid planning.
It is also the opinion of the Standing Committee that it constitutes the unlicensed practice of law for a nonlawyer to render legal advice regarding the implementation of Florida law to obtain Medicaid benefits. This includes advising an individual on the appropriate legal strategies available for spending down and restructuring assets and the need for a personal service contract or Qualified Income Trust.
It is the position of the Standing Committee that a nonlawyer’s preparation of the Medicaid application itself would not constitute the unlicensed practice of law as it is authorized by federal law. As noted earlier, it is also not the unlicensed practice of law for DCF staff to tell Medicaid applicants about Medicaid trusts and other eligibility laws and policies governing the structuring of income and assets when relevant to the applicant’s facts and financial situation.
The court order states that the inquiry was a result of activities of the Forida Department of Children and Families.
The opinion has the force and effect of the court's orders. (Mike Frisch)
Sunday, November 30, 2014
A decision issued last week by the California Court of Appeals, Second District, Division Three holds
The question before us is whether the attorney-client privilege applies to intrafirm communications between attorneys concerning disputes with a current client, when that client later sues the firm for malpractice. We conclude that when an attorney representing a current client seeks legal advice from an in-house attorney concerning a dispute with the client, the attorney-client privilege may apply to their confidential communications. Adoption of the so-called "fiduciary" and "current client" exceptions to the attorney-client privilege is contrary to California law because California courts are not at liberty to create implied exceptions to the attorney-client privilege. In the unpublished portion of the opinion, we hold that the exceptions to the attorney-client privilege embodied in Evidence Code sections 958 and 962 do not apply to the circumstances presented here. Accordingly, we grant in part the petition of Edwards Wildman Palmer LLP and Dominique Shelton for a writ of mandate, and remand to the trial court for further proceedings.
The client had retained the law firm to pursue an invasion of privacy claim against the Daily Mail. As the court noted
The relationship between [client] Mireskandari and the Firm was short lived and, for the most part, contentious.
The court rejected the suggestion that internal counsel and the client were "joint clients" of the firm
Shelton and Mireskandari were not joint clients for purposes of section 962. Shelton and Mireskandari did not retain the Firm "upon a matter of common interest." Mireskandari retained the Firm and Shelton to represent him in the Daily Mail case; Shelton consulted with in-house counsel not as a party to that action, but to obtain advice on how best to address Mireskandari's complaints about billing and his threats to hold the firm responsible for any damages he suffered. Mireskandari and Shelton were not co-parties; they did not employ the same attorney to oppose claims of an adversary or pursue a claim as joint plaintiffs; they were not represented by the same attorney in a business transaction.
The court vacated an order that had permitted discovery into the firm's internal communications.
Thank you to my former student Daniel Woofter for sending me the case. His article from the Georgetown Journal of Legal Ethics is cited in the opinion. (Mike Frisch)
Thursday, November 27, 2014
The Indiana Court of Appeals had reversed a burglary conviction based on its conclusion that the prosecution knowingly used perjured testimony.
The case involved the robbery of a Dollar General in December 2012.
A video showed that the perpetrator was a white female.
An employee named Greenlee (a white female) came under suspicion and confessed that it was she in the video. She implicated Smith (her black male boyfriend) and another female as accomplices.
Greenlee entered a guilty plea and admitted under oath that she was the one in the video.
She was awaiting sentencing when she was called as a witness in Smith's trial and offered to testify that it was Smith in the video.
After an objection by defense counsel (who was aware of Greenlee's plea) and a recess, the trial judge allowed the testimony.
The judge found that Greenlee's plea and trial was inconsistent but not necessarily false. Greenlee explained that her plea testimony was false because she was trying to aid Smith.
The prosecution granted Greenlee immunity for any false statements at her plea.
The court found that the issue had been preserved and that the prosecution had knowingly used perjured testimony. The witness gave mutually exclusive accounts of the robbery under oath and there was a "high probability" that her trial testimony was false.
Further, the grant of immunity did not solve the perjury problem, only Greenlee's problem.
Notably, a police witness testified that the video showed that the perpetrator was a white female.
Thanks to Don Lundberg for sending the case to us. (Mike Frisch)
Wednesday, October 22, 2014
My favorite issue of the Georgetown Journal of Legal Ethics -our yearly compilation of student notes on current developments in ethics law - has just hit the street.
This issue holds up well with the past editions and gives the reader excellent exposure to the hottest legal ethics issues that face 21st century members of the legal profession.
As co-faculty advisor (along with my colleague Professor Mitt Regan) to the journal, I am biased in its favor.
With that disclaimer, I highly recommend that all practitioners with an interest in ethics take a look.
Kudos to the journal staff for their hard work and dedication to this notable contribution to the profession. (Mike Frisch)
Friday, September 26, 2014
An unauthorized practice decision of the Ohio Supreme Court is described by Kathleen Maloney
A Lorain County non-lawyer and his corporation engaged in the unauthorized practice of law by providing legal advice to individuals facing criminal charges, according to an Ohio Supreme Court decision today.
The court directed King Ayettey Zubaidah and STAND, Inc., to stop practicing law and ordered them to pay a civil penalty of $20,000 for their involvement in four legal matters.
Zubaidah formed STAND (Striving Towards a New Day!) in 2008 after his experience with the justice system in the 1980s when he was convicted on a drug charge and sentenced to five years probation. STAND’s mission was “to help change the unfair and partial treatment against minorities in the judicial system.”
In each of the four cases brought before the Board on the Unauthorized Practice of Law (UPL), the defendant or a parent of the defendant asked for Zubaidah’s guidance during the criminal case and signed an agreement with STAND, which stated that the organization would assist them. No payment was required. Family members testified that Zubaidah did not claim to be an attorney and they knew he was not one.
In one matter, Isaiah Harris faced several charges in three different cases in 2008 involving the same victim. The court appointed a lawyer to represent him. Harris also signed an agreement with STAND.
The three cases were combined, and before Harris’ trial Zubaidah sent a letter to the judge indicating he had in-depth knowledge about the facts in the case and defending Harris’ actions.
In the midst of trial, Harris’ lawyer negotiated a plea deal for a four-year prison term. Zubaidah attended the trial, but his involvement was disputed. Harris’ lawyer claimed that Zubaidah advised Harris not to accept the deal. Harris rejected the offer and was later convicted and sentenced to 23 years, 6 months in prison.
In the other cases, Zubaidah sent letters to the judges asking for lower bonds, citing cases, and making legal arguments, though indicating that he was not an attorney.
In today’s per curiam opinion, the court noted that an individual who negotiates legal claims for another person and provides legal advice – even without charge and even when stating that he is not an attorney – is practicing law.
While a non-attorney who sends a character-reference letter for someone to a judge is not engaging in the unauthorized practice of law, the court stated that when a letter shifts to advocating specific legal positions for that person, the unauthorized practice of law occurs.
“[D]espite the laudable desire to seek reform in the criminal system, such a desire cannot be realized by legally advising and advocating on behalf of a criminal defendant without violating our prohibition against the unauthorized practice of law,” the opinion stated.
“Zubaidah’s actions extended beyond the permissible conduct of endorsing a person’s character, advocating a social issue generally, advancing personal interests, or providing nonlegal advice to a family member. Despite Zubaidah’s good intentions and intermittent disclaimers, his conduct shows a pattern of advocating legal positions on behalf of defendants and providing legal advice to those defendants, leading to serious consequences for the STAND clients who trusted him.”
The court pointed out that Zubaidah held himself out as “an advocate with legal expertise,” his agreements implied that he had specialized knowledge of the legal system, and his letters to judges “cited case law, raised legal issues, and asked for legal results.”
Adopting the UPL board’s recommendation, the court determined that a $5,000 penalty for each violation was reasonable.
The court’s majority included Chief Justice Maureen O’Connor and Justices Terrence O’Donnell, Judith Ann Lanzinger, Sharon L. Kennedy, and Judith L. French. Justices Paul E. Pfeifer and William M. O’Neill concurred in part and dissented in part.
While Justices Pfeifer and O’Neill agree that Zubaidah engaged in the unauthorized practice of law, they would instead impose $1,000 for each violation, for a total penalty of $4,000.
Monday, July 28, 2014
The District of Columbia Bar Legal Ethics Committee has a new opinion on an important real-world issue
When a lawyer is seeking employment with an entity or person adverse to his client, or with the adversary's lawyer, a conflict of interest may arise under Rule 1.7(b)(4) if the lawyer’s professional judgment on behalf of the client will be, or reasonably may be, adversely affected by the lawyer’s own financial, business, property, or personal interests (for purposes of this Opinion, a lawyer’s own financial, business, property, or personal interests are collectively referred to as a “personal interest conflict”). Both subjective and objective tests must be applied to determine whether a personal interest conflict exists.
There is no “bright line” test for determining the point during the employment process when a personal interest conflict arises, and that point may vary. There are a number of factors to consider in determining whether a personal interest conflict exists, including whether the individual lawyer is materially and actively involved in representing the client and, if so, whether the lawyer’s interest in the prospective employer is targeted and specific, and/or has been communicated to, and reciprocated by, the prospective employer.
Where the prospective employer is affiliated with, but separate and distinct from, the entity adverse to the job-seeking lawyer's client, there may be no personal interest conflict in the first instance, because the adversary and the prospective employer may be separate entities for conflicts purposes.
If a personal interest conflict arises, there are three possible courses of action that may be available to the individual lawyer, each of which is subject to applicable requirements of the D.C. Rules of Professional Conduct: (a) disclosing to the client the existence and nature of the personal interest conflict and the possible adverse consequences of the lawyer's representation of the client and obtaining the client's informed consent to the representation; (b) withdrawing from the representation; or, (c) discontinuing seeking employment with the client's adversary or the adversary's lawyer until all pending matters relating to that potential new employment have been completed.
The personal interest conflict of an individual lawyer in a law firm, nonprofit, or corporate legal department is not imputed to the other lawyers in the law firm, nonprofit, or corporate legal department, so long as the personal interest conflict does not present a significant risk of adversely affecting the representation of the client by such other lawyers. The imputation rule does not apply to a government agency.
A subordinate lawyer who discusses a potential personal interest conflict with his supervisory lawyer, and acts in accordance with the supervisory lawyer's reasonable determination of whether the subordinate lawyer has a personal interest conflict and follows the supervisory lawyer's recommended course of action, will not be held professionally responsible even if it is subsequently determined that the supervisory lawyer's determination of whether there was a personal interest conflict, and/or the recommended course of action, were incorrect under the Rules.
I have found this issue to arise with some frequency. Guidance always is helpful. (Mike Frisch)
Friday, May 16, 2014
Good news for attorneys who conduct depositions.
The dismissal of a civil action against the Paul Hastings firm was affirmed by the New York Appellate Division for the First Judicial Department
The court properly dismissed the slander per se claim because the alleged defamatory statements were made during a judicial proceeding and may be considered pertinent to that proceeding...
The court properly dismissed the claim for civil assault. The physical conduct alleged by plaintiff, which amounts to finger pointing and generalized yelling in the context of a heated deposition, is inappropriate behavior, not to be condoned, but, without more, is not the type of menacing conduct that may give rise to a reasonable apprehension of imminent harmful conduct needed to state an actionable claim of assault.
Friday, December 20, 2013
Two attorneys who had represented opposing parties in civil litigation ended up in litigation against each other.
The Maryland Court of Appeals affirmed dismissal of the case, noting that "[t]o characterize Farmer and Mixter's relationship as acrimonious might be the understatement of the year. This court is sadly too familiar with the antics of these litigants from a dispute a few years ago..."
After the earlier case settled, Farmer "was so infuriated by Mixter's behavior that he sought sanctions against him." Sanctions were imposed but reversed on appeal.
Farmer then sent twenty letters to various Maryland lawyers that alleged "unprofessional behavior" and sought information for a bar complaint. Mixter responded with a suit for defamation. Famer sent more letters to attorneys and filed a bar grievance against Mixter.
The court here affirmed the the dismissal of the Mixter suit against Farmer and a second attorney who allegedly conspired with him based on absolute judicial privilege grounds
Because [Attorney Grievance Commission] complaints are not published and lawyers' exposure is protected to a reasonable degree, we are unwilling to overlook the absolute privilege accorded to the AGC process simply because appellant feels aggrieved by the situation.
Wednesday, October 23, 2013
The Washington State Court of Appeals, Division II has reversed and remanded a trial court order denying an attorney's motion to withdraw from the representation of the plaintiffs in a medical malpractice case.
The clients, after an initial payment, had failed to satisfy obligations under the fee agreement to pay costs. The attorney had advanced significant sums for experts and depositions in the litigation.
Further representation would result in an unreasonable financial burden on [the attorney] and that with their dispute over fees and the resulting professional conflict, the [clients] rendered [the attorney's] representation unreasonably difficult...This is not one of those rare cases where [the attorney's] withdrawal would have harmed the efficiency of the judicial system, and we do not see that her withdrawal would have had a materially adverse effect on the [clients'] interests. Trial had not been set and there were no dispositive motions before the court when [the attorney] moved to withdraw.
The attorney had given notice of her intent to withdraw with ample time to secure new counsel. In fact, successor counsel was eventually retained.
That fact did not moot the withdrawal issue, according to the court.
The court concluded that the trial court abused its discretion in denying the motion to withdraw and remanded for entry of an order granting withdrawal as of June 15, 2012. (Mike Frisch)
Wednesday, July 10, 2013
A significant decision today by the Massachusetts Supreme Judicial Court.
The issue and holding:
The issue presented on appeal is whether confidential communications between law firm attorneys and a law firm's in-house counsel concerning a malpractice claim asserted by a current client of the firm are protected from disclosure to the client by the attorney-client privilege. We conclude that they are, provided that (1) the law firm has designated an attorney or attorneys within the firm to represent the firm as in-house counsel, (2) the in-house counsel has not performed any work on the client matter at issue or a substantially related matter, (3) the time spent by the attorneys in these communications with in-house counsel is not billed to a client, and (4) the communications are made in confidence and kept confidential. Because these criteria were met in this case, we affirm the judge's order allowing the defendant law firm and its attorneys to invoke the attorney-client privilege to preserve the confidentiality of these communications.
The law firm was retained by a commercial lender to investigate title and foreclose on property secured by what the lender thought was a first mortgage. A third party claimed a superior interest in the property.
A year later, the client (through outside counsel) sent the law firm a draft complaint alleging malpractice and breach of contract.
The lawyers in the firm then consulted with the firm partner "designated to respond to ethical questions and risk management issues on behalf of [the firm]..."
The court underscored the importance of the ethics attorney function:
Where a law firm designates one or more attorneys to serve as its in-house counsel on ethical, regulatory, and risk management issues that are crucial to the firm's reputation and financial success, the attorney-client privilege serves the same purpose as it does for corporations or governmental entities: it guarantees the confidentiality necessary to ensure that the firm's partners, associates, and staff employees provide the information needed to obtain sound legal advice. See Hertzog, Calamari & Gleason v. Prudential Ins. Co. of Am., 850 F.Supp. 255, 255 (S.D.N.Y.1994) ("No principled reason appears for denying ... attorney-client privilege to a law partnership which elects to use a partner or associate as counsel of record in a litigated matter"). "[B]road protection of communications with law firm in-house counsel, including communication about the representation of a current client of the firm, ... would encourage firm members to seek early advice about their duties to clients and to correct mistakes or lapses, if possible, to alleviate harm." Chambliss, supra at 1724. As the United States District Court for the Southern District of Ohio recently noted:
"[I]ndividual lawyers who come to the realization that they have made some error in pursuing their client's legal matters should be encouraged to seek advice promptly about how to correct the error, and to make full disclosure to the attorney from whom that advice is sought about what was done or not done, so that the advice may stand some chance of allowing the mistake to be rectified before the client is irreparably damaged. If such lawyers believe that these communications will eventually be revealed to the client in the context of a legal malpractice case, they will be much less likely to seek prompt advice from members of the same firm."
The court rejected a differing result when the situation involves a current, rather than former, client:
In law, as in architecture, form should follow function, and we prefer a formulation of the attorney-client privilege that encourages attorneys faced with the threat of legal action by a client to seek the legal advice of in-house ethics counsel before deciding whether they must withdraw from the representation to one that would encourage attorneys to withdraw or disclose a poorly understood potential conflict before seeking such advice. The "current client" exception is a flawed interpretation of the rules of professional conduct that yields a dysfunctional result. See N.Y. St. Bar Ass'n Comm. on Prof. Ethics, Op. 789 (2005) ("We do not believe that the conflicts rules ... were intended to prohibit ethics consultation when it is most helpful: during the client representation"). As such, we decline to adopt it in Massachusetts.
Briefs were submitted by several amicus curiae, including the Association of Professional Responsibility Lawyers, the American Bar Association and the Attorneys' Liability Assurance Society, Inc.
The case is RFF Family Partnership, LP v. Burns & Levinson LLP. One should be able to access the decision through this link.
Law firm ethics counsel --every firm of sufficient size needs one. (Mike Frisch)
Saturday, August 11, 2012
The Nevada Supreme Court has held that the son of a divorcing couple is not disqualified from representing his father in the litigation:
This original petition for a writ of mandamus raises two novel issues regarding attorney disqualification: should an attorney who represents one of his parents in a divorce action between both parents be disqualified either (1) because the attorney’s representation will constitute an appearance of impropriety or (2) because representing the parent will violate the concurrent-conflict-of-interest rule in Nevada Rule of Professional Conduct (RPC) 1.7? Because appearance of impropriety is no longer recognized by the American Bar Association, and we have not recognized the appearance of impropriety as a basis for disqualifying counsel except in the limited circumstance of a public lawyer, we reject that conclusion when the alleged impropriety is based solely on a familial relationship with the attorney. We also conclude that absent an ethical breach by the attorney that affects the fairness of the entire litigation or a proven confidential relationship between the nonclient parent and the attorney, the nonclient parent lacks standing to seek disqualification under RPC 1.7.
The court reversed the trial court, which had disqualified the son.
The Las Vegas Review-Journal noted that the representation might be contrary to common sense, if not legal ethics. (Mike Frisch)
Tuesday, January 24, 2012
In a decision reversing the Circuit Court and Court of Special Appeals, the Maryland Court of Appeals reached a decision with respect to legal fees charged in foreclosure sales:
We hold that , in the absence of specific authority in the contract of indebtedness or contained in statute or court rule, it is an impermissible abuse of discretion for trustees or the lenders who 'bid in' properties to include the demand for additional legal fees for the benefit of the Trustees in the advertisement of sale, or in any other way, in that it is contrary to the duty of trustees to maximize the proceeds of the sales, and, moreover, is not in conformance with state or local rules and... is against public policy.
The court noted that the practice of charging for such fees was, prior to its decision, the customary practice in Maryland foreclosure sales. (Mike Frisch)
Thursday, January 19, 2012
In the case involving the murder of Chandra Levy, the District of Columbia Court of Appealls has reversed and remanded a trial court order denying the Washington Post access to completed jury questionnaires.
The Post's request was made after the trial jury had been selected and the trial had begun. The government contended that the request was thus untimely.
On remand, the trial judge must start with a presumption that the completed questionnaires should be completely disclosed. If any answers touch on "deeply personal matters," the judge may provide the jurors with an opportunity to raise concerns in camera. The court may then enter specific individualized findings on the necessity of redaction that a capable of appellate review. (Mike Frisch)
Friday, April 22, 2011
The Maryland Court of Appeals held today that lawyers who publish to the press copies of their state complaint, make oral statements of like kind to the press, and republish pleadings on the internet are protected by an absolute privilege where (1) the reasonably contemplated proceeding satisfies the two-part test of a 1981 Maryland case; (2) the lawyers statements were made, "at least in part, in increase awareness of a proposed class action suit..." and (3) the "statements are related reasonably and rationally to the subject matter of the contemplated proceeding."
The plaintiff in this defamation litigation was not a named defendant but had been identified as involved in a mortgage scam. (Mike Frisch)
Tuesday, April 19, 2011
In a case involving a plaintiff struck by a truck while in a crosswalk, the Utah Supreme Court held that defense counsel's "McDonald's coffee case" reference in closing argument warranted reversal:
Before we analyze this statement, it may be useful to explain the cultural context of the McDonald’s coffee case, more formally known as Liebeck v. McDonald’s Restaurants, P.T.S., Inc. Few cases have ever achieved as much notoriety among the general public of this country as the McDonald’s coffee case, fueled by its wide-ranging and repeated publicity in national and local news media. It has been mocked in extremely popular entertainment television, including The Tonight Show, The Late Show, and Seinfeld. It has been debated on talk shows, parodied in television commercials, mentioned in congressional debates, and is firmly lodged in the public consciousness. Mark B. Greenlee, Kramer v. Java World: Images, Issues and Idols in the Debate over Tort Reform, 26 CAP. U. L. REV. 701, 702–03 (1997). “What made the headlines and what is most commonly recalled by the general populace about the . . . case is the size of the verdict and the source of the injury—$2.9 million for spilled coffee.” Id. at 718. In U.S. popular culture, the case has come to symbolize greedy plaintiffs and lawyers who file frivolous lawsuits and win hugely excessive sums in a broken legal system.
The defendant admitted liability and the case was tried solely on damages. Defense counsel argued
Ladies and gentlemen, they want a lot of money for this. A lot of money. What’s been written on the board is called a per diem analysis. . . . How many days has it been since the accident? How many days for the rest of his life. And how much per day is that worth? That’s what’s been done here. That’s how we get verdicts like in the McDonald’s case with a cup of coffee.
The court found the argument improper and prejudical
Given the uniquely iconic nature of this case, the passion it has produced in the media, and the general misunderstanding of the totality of its facts and reasoning among the public, we find it hard to imagine a scenario where it would be proper for a party’s counsel to refer to it before a jury. Generally, as here, such a reference would seem to have the sole purpose of recalling the public outrage over isolated elements of the case—thus improperly appealing to a jury’s passions. It is not the jury’s job to make legal determinations, so no legal arguments from the case are relevant. The facts in the McDonald’s coffee case were not in evidence before this jury and were also utterly irrelevant. Indeed, the one attempt counsel made to make her reference seem relevant was a misrepresentation because the high punitive damages award in the McDonald’s coffee case had nothing to do with a per diem analysis. It is certainly unfair to require the other party to clarify all the misconceptions about this irrelevant case in the limited time allotted for closing argument. The great latitude provided in closing arguments regards reasonable inferences about evidence properly before the jury and does not extend to misrepresentations or efforts to appeal to a jury’s passions. Thus the reference to the McDonald’s coffee case in closing argument was improper.
Reversed. We have this one listed under Hot Topics. (Mike Frisch)
Sunday, February 20, 2011
What information concerning legal experience may a law graduate provide to a prospective employer without running afoul of confidentiality obligations? The North Carolina Bar has a January 21, 2010 formal opinion:
Providing Conflicts Information to Hiring Law Firm
Opinion rules that a hiring law firm may ask an incoming law school graduate to provide sufficient information as to his prior legal experience so that the hiring law firm can identify potential conflicts of interest.
After his second year of law school, a law student worked as a summer clerk for Law Firm A in Raleigh. One of the many projects Law Firm A assigned to the law student was legal research that was part of Law Firm A’s preparation of Lawsuit X.
After the law student graduated from law school, Law Firm B hired the now law graduate as an associate in its Chicago office. After the law graduate left Law Firm A, but before he joined Law Firm B, Law Firm A filed Lawsuit X. After Lawsuit X was filed, lawyers in the Charlotte office of Law Firm B were retained to defend the case.
The law graduate was unaware that Lawsuit X had been filed, or that Law Firm B had been retained to defend it. Before the law graduate joined Law Firm B, the firm asked him to provide information about the identity of the client matters he worked on at Law Firm A so that potential conflicts could be addressed. The law graduate contacted Law Firm A, which directed him not to disclose any information about matters he had worked on or clients for whom he had worked.
Law Firm A learned that law graduate was associated with Law Firm B in Chicago and moved to disqualify Law Firm B from Lawsuit X. Law Firm B established a screen immediately upon learning that law graduate had worked on Lawsuit X.
Does law graduate have a conflict of interest that is imputed to the other lawyers in Law Firm B, disqualifying those lawyers from the representation of the defendant in Lawsuit X?
No. A law firm may hire a law graduate although the law firm is representing a client in a matter on which the law graduate previously worked for the opposing party while clerking at another law firm. Conflicts of interest created by work performed as a law clerk are not imputed to other members of a law firm under Rule 1.10. See Rule 1.10, cmt. . Nevertheless, the law graduate should be screened from any participation in the matter. Id. (Note that Rule 1.10(c) allows a law firm to hire a lawyer who previously worked for the opposing party while employed at another law firm so long as the lawyer is timely screened from any participation in the matter and written notice is given to any affected former client.)
Will a Rule 1.0(1) screen of the law graduate from Lawsuit X implemented when Law Firm B learned of law graduate’s involvement in Lawsuit X be deemed “timely” and protect the lawyers of Law Firm B from disqualification?
In order to be effective, screening measures must be implemented as soon as practical after a law firm knows or reasonably should know that there is a need for screening. Rule 1.0, cmt. . The purpose of screening is to assure the affected parties that confidential information known by the disqualified individual remains protected. Rule 1.0, cmt. . If the screen is implemented prior to any participation by the law graduate in the matter and prior to the communication of any confidential information, the purpose for the screening procedure will have been effectuated.
Is it improper for a law firm to ask law graduates or graduates not yet admitted to the practice of law, who have worked as law clerks, to identify client matters on which they worked as law clerks so that the hiring law firm can identify potential conflicts of interest?
No. When a new law school graduate, or any new lawyer, joins a firm, the hiring firm has an obligation to protect their clients against harm from conflicts of interest. See Rule 1.7. Comment  to Rule 1.7 provides that, to determine whether a conflict of interest exists, a lawyer should adopt reasonable procedures to determine in both litigation and non-litigation matters the persons and issues involved. However, the identity of the persons and issues involved in a matter are protected client information under Rule 1.6(a).
Rule 1.6(a) of the Rules of Professional Conduct provides that a lawyer shall not reveal information acquired during the professional relationship with a client unless (1) the client gives informed consent; (2) the disclosure is impliedly authorized; or (3) one of the exceptions set out in Rule 1.6(b) applies. One of the exceptions set out in Rule 1.6(b) provides that a lawyer may reveal confidential information to comply with the Rules of Professional Conduct. Rule 1.6(b)(1).
The ABA Standing Committee on Ethics and Professional Responsibility recently opined that lawyers moving between firms should be permitted to disclose the persons and issues involved in a matter because the prohibition of such disclosure would preclude lawyers from conforming with the conflicts rules. ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 09-455 (2009). Similarly, it is appropriate for a law firm to ask an incoming law school graduate to provide sufficient information so that the hiring law firm can identify potential conflicts of interest.
However, as noted in the ABA opinion, “any disclosure of conflict information should be no greater than reasonably necessary to accomplish the purpose of detecting and resolving conflicts and must not compromise the attorney-client privilege or otherwise prejudice a client or former client.” Id. In addition, a lawyer or law firm receiving conflict information may not reveal such information or use it for purposes other than detecting and resolving conflicts of interest.
Is a law firm that a law graduate worked for permitted to disclose to a different law firm the identity of clients and matters that the law graduate worked on at the law firm so that the hiring firm can identify potential conflicts of interest?
Yes. See Opinion #3.
Wednesday, February 9, 2011
The Winter 2011 edition of the Georgetown Journal of Legal Ethics has just hit the streets. Among the highlights are an analysis of the value of U.S. legal education in the global services market by Professor Carole Silver and an article on interference with law school clinics from Professors Robert Kuehn and Bridget McCormack.
The edition may be ordered through this link.
As co-faculty advisor (with Professor Mitt Regan) to the journal, my thanks to the editors for their fine contribution to the profession. (Mike Frisch)