Monday, May 12, 2014
An interesting decision last week from the Georgia Supreme Court on disqualification premised on a non-attorney employee
We granted certiorari in this case to determine whether the Court of Appeals correctly held that a conflict of interest involving a nonlawyer can be remedied by implementing proper screening measures in order to avoid disqualification of the entire law firm. For the reasons set forth below, we hold that a nonlawyer’s conflict of interest can be remedied by implementing proper screening measures so as to avoid disqualification of an entire law firm. In this particular case, we find that the screening measures implemented by the nonlawyer’s new law firm were effective and appropriate to protect against the nonlawyer’s disclosure of confidential information. However, we remand this case to the trial court for a hearing to determine whether the new law firm promptly disclosed the conflict.
The case involves a wrongful death action brought by the estate of a person who was shot and killed at an apartment complex. The paralegal was the plaintiff 's primary contact and worked on the fact investigation before moving (with an intervening stop at another job) to the firm that represented the defendant apartment complex.
The conflict was not discovered when the paralegal first moved to the defendant's firm, as suit had not yet been filed and the paralegal did not know that the firm represented the defendant.
Screening was implemented after the conflict was discovered.
The court set forth a test for disqualification under the circumstances
...the new firm will be disqualified where (1) the nonlawyer has already revealed the confidential information to lawyers or other personnel in the new firm; (2) screening would be ineffective; or (3) “the nonlawyer necessarily would be required to work [or has actually worked at the new firm] on the other side of the same or a substantially related matter on which the nonlawyer [previously] worked.”
Justice Nahmias concers but has concerns about the state of screening in Georgia
It should be noted... that this is yet another case that raises questions about whether Rule 1.10, and in particular its implicit rejection of the use of screening measures to avoid imputed disqualification of an entire law firm when one of their lawyers would be disqualified, should be reconsidered and amended or at least clarified. After all, the rules already allow the use of screening to avoid conflicts imputed from some lawyers – former government lawyers, judges, and arbitrators. See Rules 1.11 (a) and 1.12 (c). And many of the factors that the Court discusses in support of our conclusion that screening measures, rather than imputed disqualification, may be appropriate for nonlawyers also apply to many other lawyers – especially associates. In addition, we should acknowledge that, as in the rest of our economy, it is becoming far less common for lawyers and their nonlawyer assistants to remain with the same firm for an entire career, whether by choice or due to layoffs or merger and dissolution of firms. This Court can continue deciding – or avoiding deciding – the impact of Rule 1.10 on a case-by-case basis, but the process for amending the Bar Rules provides opportunities for greater and broader input from those whose interests may be affected by imputed disqualification as well as consideration of facts and circumstances beyond those presented in the record of a particular case. That seems a preferable way to address these issues.
Tuesday, May 6, 2014
A law firm's suit for defamation was dismissed by the New York Appellate Division for the First Judicial Department:
In this action for defamation, plaintiffs, a law firm and its two members, allege that defendant, the chief executive of a party named as a defendant in a law suit brought by plaintiffs on behalf of their client, NDTV, defamed them in an interview conducted by a journalist in India and published in an online Indian financial publication. Among the allegedly false and defamatory statements made by defendant were that the plaintiff firm is a two-lawyer, Florida-based law firm specializing in restaurant law, that it accepted cases on a contingency basis, and that it broached the topic of settlement with their client's adversaries in an attempt to "extort" money from them.
The motion Court properly found that plaintiffs failed to state a valid cause of action for defamation. Given the overall context in which the statements were made, a reasonable reader would conclude that they constitute hyperbole and convey non-actionable opinions about the merits of the lawsuit and the motivation of NDTV's attorneys, rather than statements of fact.
Wednesday, April 30, 2014
The Minesota Supreme Court has remanded the order that had disqualified Covington & Burling in civil litigation
This case presents several issues regarding disqualification of legal counsel because of a violation of Minn. R. Prof. Conduct 1.9(a) arising from a conflict of interest with a former client. These issues include who has standing to appeal a district court order granting a motion to disqualify, the legal standard for determining whether Rule 1.9(a) has been violated, and whether the right to seek disqualification can be waived. Appellant State of Minnesota retained appellant Covington & Burling, LLP (Covington) to represent it in a natural resource damages (NRD) case against respondent 3M Company involving the manufacture and disposal of perfluorochemicals (PFCs). Covington previously had represented 3M in legal and regulatory matters related to 3M’s fluorochemicals (FC) business from 1992 to 2006. Covington first appeared on behalf of the State in this action in January 2011. In October 2012, the district court granted 3M’s disqualification motion. Both the State and Covington appealed. The court of appeals dismissed Covington’s appeal for lack of standing and affirmed the disqualification of Covington. We granted Covington’s and the State’s respective petitions for review. For the reasons that follow, we affirm in part, reverse in part, and remand to the district court.
Here, the district court concluded, based on the evidence in the record, that Covington obtained confidential information in its prior representation of 3M, and the district court presumed that the information was shared with all Covington attorneys. But the district court did not meaningfully assess Covington’s claims that this information was no longer confidential either because the information had been disclosed to regulatory authorities and the public or because 3M waived the attorney-client privilege by initiating a separate, concurrent lawsuit against Covington for breach of fiduciary duty and breach of contract. The district court also did not analyze whether there is a substantial risk that any remaining confidential information would materially advance the State’s position in the NRD case. Therefore, the district court abused its discretion by failing to consider all legally relevant factors before concluding that the matters are substantially related...
Because we conclude that the district court did not consider legally relevant factors in conducting its disqualification analysis under Rule 1.9(a) and we conclude that a party can waive the right to seek disqualification of opposing counsel, we remand this case to the district court for its full consideration of these issues in a manner consistent with this opinion. The decision whether to reopen the record on remand rests within the discretion of the district court.
The ABA Journal had reported the trial court's order. (Mike Frisch)
Monday, February 24, 2014
The Virginia State Bar seeks comment on a proposed revision to the Imputed Conflicts Rule:
Pursuant to Part Six: Section IV, Paragraph 10-2(C) of the Rules of the Supreme Court of Virginia, the Virginia State Bar’s Standing Committee on Legal Ethics (“Committee”) is seeking public comment on a proposed amendment to Rule 1.10 of the Rules of Professional Conduct.
This proposed Rule amendment is intended to avoid a situation in which a lawyer avoids the imputation of a conflict of interest by avoiding the knowledge that another lawyer in the firm has a conflict as to the representation. Under the current standard of “knowing” that another lawyer in the firm is prohibited from undertaking the representation, a lawyer can avoid the application of Rule 1.10(a), which would impute a conflict to him, by willfully failing to learn the information that establishes the existence of the conflict. The proposed Rule amendment imputes a conflict if the lawyer “knows or reasonably should know” that another lawyer in the firm is prohibited from representing the client. The proposed amendment adds a new Comment [2a] to explain that the failure to maintain or use a system for identifying conflicts may be deemed a violation of Rule 1.10(a), if proper use of the system would have identified the conflict.
My comment --a good idea. (Mike Frisch)
Tuesday, February 11, 2014
The Virginia State Bar has put out for comment a proposed ethics opinion
This proposed opinion addresses a hypothetical situation in which lawyers Smith and Jones practiced together in the firm Smith & Jones P.C., which used the URL smithjones.com. After Smith withdrew from the firm and began practicing with another firm, Jones changed the firm’s name to “Jones Law Office, P.C.” and established a new website at the URL “joneslawoffice.com.” Jones proposes to automatically redirect anyone who attempts to access smithjones.com to joneslawoffice.com, or alternatively, to put a notice on the smithjones.com website that Smith & Jones, P.C. has now become the Jones Law Office because of Smith’s withdrawal from the firm, providing the date of Smith’s withdrawal and a link to joneslawoffice.com.
In this proposed opinion, the Committee concluded that both of Jones’s proposed alternatives are misleading in the absence of additional information about Smith’s withdrawal from the firm and his continued practice of law. The proposed notice, which would say that Smith & Jones, P.C. “has now become” the Jones Law Office, is misleading without the additional information that Smith continues to practice law, and automatically redirecting website visitors to joneslawoffice.com without providing some explanation is misleading for the same reason.
Comments are due by February 28. (Mike Frisch)
Thursday, January 30, 2014
The District of Columbia Court of Appeals has affirmed an abritration award that resolved a dispute over the allocation of attorneys' fees in a class action suit that had been litigated in California.
The arbitration involved several attorneys and law firms, most based in the District of Columbia. After receiving the arbitrator's award, appellants... unsucessfully attempted to reopen the attorneys' fees issue in the California trial court. When that efort failed on procedural grounds, [they] filed a motion in the Superior Court of the District of Columbia to vacate the arbitration award on the ground that the arbitrator exceeded his powers and committed misconduct by denying them due process.
The class action case involved discrimination claims by television writers over the age of 40.
Senior Judge Reid wrote for the unanimous court in affirming the trial court judgment. (Mike Frisch)
Friday, November 8, 2013
A single retainer agreement sufficed to cover a second matter and entitled counsel to legal fees, according to a decision of the New York Appellate Division for the First Judicial Department:
The record establishes plaintiff's entitlement to recover the unpaid legal fees that arose from its representation of defendants in two underlying actions. Contrary to defendants' contention, the subject retainer agreement governs plaintiff's work on both underlying matters. In compliance with 22 NYCRR 1215.1, which mandates that retainer agreements contain an "explanation of the scope of the legal services to be provided" (22 NYCRR 1215.1[b]), the agreement specifies that plaintiff's services "will include legal representation and advice with respect to specific matters that you refer to the Firm." Although defendants initially sought plaintiff to represent them in only one of the underlying actions, it is undisputed that they requested plaintiff's services with respect to the other action, shortly thereafter. Plaintiff's representation of defendants in the latter matter therefore falls within the ambit of the retainer.
The client did not challenge the invoices when rendered and could thus not attack the reasonableness of the fees. (Mike Frisch)
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)
Tuesday, October 15, 2013
The Tennessee Court of Appeals has reversed and remanded an order dismissing claims brought against a Washington, D.C. attorney by a Memphis law firm.
The D.C. attorney sought the assistance of the Memphis firm in connection with a lawsuit filed in Maryland. A contract was entered into for the attorney and the firm to serve as co-counsel.
The Memphis firm sued the attorney for not paying one-half of the expenses, as provided for in the contract.
The trial court dismissed for lack of personal jurisdiction. The court here disagreed and reinstated the suit. (Mike Frisch)
Tuesday, October 1, 2013
A former colleague at the Office of Bar Counsel brought a 2010 decision of the District of Columbia Court of Appeals to my attention.
The case - Bergman v. District of Columbia, et al. , - raises some interesting questions concerning the ethical obligations of attorneys who solicit clients in the District of Columbia.
Historically, enforcement of solicitation restrictions has been the lowest of priorities in D.C. The Court of Appeals did not adopt ABA Model Rules 7.2 through 7.4 and seeded in its Rule 7.1 a provision that permits in-person solicitations that do not involve false statements or undue influence.
As a result, prosecutions for improper client solicitation rarely, if ever, take place.
In one reciprocal case I handled, the court declined to impose any discipline on an attorney sanctioned in Maryland for approaching a potential client as he was leaving a courthouse. The case is In re Roger Gregory.
The Bergman case involved a suit by a D.C. Bar member challenging the validity of a City Council act that, among other thing, makes it unlawful for an attorney to solicit business from a potential motor vehicle accident client within 21 days of an accident.
In an opinion authored by Senior Judge Frank Schwelb, the court upheld the provision and rejected the contention that the act contravened the court's exclusive authority to regulate the legal profession. The court relied on United States Supreme Court jurisprudence in the area of attorney solicitation, primarily Ohralik v. Ohio and Florida Bar v. Went For It.
Rather, the power is inherent but not exclusive: "we believe that it would be an inappropriate exercise of judicial power to restrict the legislative authority of our elected representatives in the manner that Bergman suggests...we are dealing here with uninvited attempts to secure employment for renumeration - a classic example of a business transaction."
The court gave short shrift to the attorney's First Amendment claims: "this case...is not about the benign democratic ideal of opposing views competing for public acceptance. Rather, it is about practitioners aggressively seeking to secure potentially profitable employment."
So, as a result, in the District of Columbia, attorneys are forbidden by legislative act from a form of solicitation that is not in any manner in violation of the court's own ethical rules.
Are D.C. lawyers now subject to bar proceedings if they violate the statute but not the ethics rules?
Should the ethics rules be amended to harmonize with the now-governing law?
Will the City initiate criminal prosecutions of soliciting attorneys?
I will confess myself a bit surprised to see the court's embrace of Ohralik and Went For It given the state of its own disciplinary rules.
The opinion is linked here. (Mike Frisch)
Thursday, September 19, 2013
The District of Columbia Court of Appeals has affirmed an order to arbitrate a dispute between a former partner of K &L Gates and the firm.
The attorney had filed suit against the firm in California. The firm invoked arbitration and forum selection clauses in the firm partnership agreement, and moved in the D.C. Superior Court to compel arbitration.
The Superior Court ordered the parties to arbitrate the dispute. The attorney appealed the order.
The court here entertained the appeal and concluded that the dispute must be arbitrated.
The attorney had signed a supplement to the firm's partnership agreement when Kilpatrick & Lockhart merged with Preston, Gates & Ellis that bound him to the agreement "as amended."
The attorney (who was a partner at the Preston firm) agreed to the supplement when he chose to become a K &L Gates partner. The agreement provided for arbitration of disputes that arose between him and the firm and chose the District of Columbia as the forum.
The court rejected a host of contentions, including the suggestion that the firm engaged in fraud in having the agreement signed. The court held that the arbitration agreement broadly covered all issues in dispute between the attorney and the firm.
Associate Judge McLeese wrote the opinion. There are concurring opinion from Senior Judge Ferren, joined by Associate Judge Easterly.
The issue of the concurrences involved footnote four of the opinion. The concurring opinion proposes an alternate version.
Judge McLeese defended the footnote in a concurring opinion. (Mike Frisch)
Friday, August 16, 2013
The New Jersey Appellate Court has issued a 105 page opinion in a case involving former friends and business partners who "pursued their respective claims against each other with the same passion and zeal that once characterized their success in business."
The defendant and plaintiff met in 1997. At first, defendant was plaintiff's personal attorney. He later became the chief operating officer as well as general counsel to business entities of the plaintiff.
The court notes that he was also an entertainment lawyer who had represented Bette Midler, Rod Stewart, Neil Sedaka, Andrew Lloyd Webber and the Bee Gees.
The plaintiff has risen from a limited eduction to great success. The defendant (who is admitted in New York but not New Jersey) was alleged to have engaged in self-dealing as well as lavish personal spending on the company dime.
In particular, the court describes a three-night, all expenses paid (by the company) trip to Las Vegas.
While the lesser mortals stayed elsewhere, the defendant had a penthouse at the Bellagio Hotel. He brought the gang back from dinner (where he let the company pick up the tab), along with "three young ladies" that he introduced as his "friends."
At the penthouse, the friends performed with, as a witness testified, "nothing on, nude show, did things to each other, that sort of stuff..." The witness was particularly impressed by the fact that the penthouse had a grand piano.
The court affirmed the rescission of the defendant's ownership interests in three entities. Further, the court affirmed legal malpractice and civil fraud claims against the defendant as in-house and general counsel as well as personal attorney for the plaintiff. Awards of counsel fees and punitive damages to the plaintiff were reversed.
The court squarely rejected the defendant's contention that RPC 1.8(a) (the business transactions with clients rule) did not apply to him as an in-house counsel.
As a sidelight, the litigation also led to the censure of the first trial judge.
The censured judge had violated judicial ethics by attending court proceedings after his recusal, a situation that did not create an issue for the court:
...we are satisfied that Judge Nugent's role as fact-finder and legal arbiter was not compromized by [former] Judge Perskie's conduct. Although we have disagreed with some of the legal rulings he made in the case, Judge Nugent's integrity as a jurist is beyond reproach.
The court departed from its usual pratice of not identiying the trial judge by name and noted that the judge had already been named in publicity generated by the case. (Mike Frisch)
Wednesday, June 19, 2013
The Utah Supreme Court has ruled in favor of an attorney in a fee dispute with a client.
The attorney represented the client pursuant to a 1/3 contingency fee argeement for "all monies paid" in the case.
The representation spanned 13 years and resulted in a judgment in excess of $6 million. The client had retained another law firm to recover the attorneys fees.
The issue was whether the agreement allowed payment of the stated percentage of the award of attorneys fees as well as the judgment.
The court held that the ageement was "unambiguous" and complaint with the Rules of Professional Conduct. Thus, the attorney was entitled to his 1/3 cut of the attorneys fees. (Mike Frisch)
Wednesday, June 12, 2013
A non-attorney may file a claim on behalf of a business entity in probate court without running afoul of unauthorized practice restrictions, according to an opinion issued today by the South Carolina Supreme Court.
The process for an allowance of claim merely requires the filing of a single page standard form that can be found on a court web page. The form requires an attestation that the claim is valid, timely and unpaid.
None of these activities require the professional judgment of an attorney or entail specialized legal knowledge and ability.
Bravo. (Mike Frisch)
Monday, May 6, 2013
In a lawsuit involving a dispute between lawyers over the legal fees in a complex medical malpractice case, the Maryland Court of Special Appeals has held that
...we will apply the general rule that the termination of a contingency fee agreement terminates the fee-sharing agreement predicated on it. Because PGA [the law firm of Orioles owner Peter Angelos] is not entitled to a contingency fee, there is no contingency fee for Mr. Brault to share. Accordingly, to the extent the circuit court factored in the fee-sharing agreement, the circuit court's ruling must be vacated and remanded for further proceedings.
We stress that our decision in this case does not mean that Mr. Brault is not entitled to compensation for his work while the contingency arrangement was in effect. Like PGA, howver, his claim would be for the reasonable value of his services.
The case involved an attorney (Mr. Gately) who while with PGA undertook the representation of the client with assistance from other firm attorneys. Mr. Brault was brought in as co-counsel and a favorable verdict was obtained. The verdict was overturned on appeal.
Mr. Gately was then discharged from PGA. The client followed him and Mr. Brault. The case later settled for an undisclosed amount. PGA sued to enforce its lien. The disputed funds remained in escrow.
Mr. Gately acknowledged that no post-verdict effort had contributed to the settlement, which he attributed to an act of God.
The court here held that PGA had behaved ethically and was not deprived of it entitlement to fees.
The court also held that the discharged attorneys may properly sue successor counsel. (Mike Frisch)
Wednesday, May 1, 2013
From the web page of the Tennessee Supreme Court:
The Tennessee Supreme Court has sent a dispute between a Memphis law firm and a former partner and paralegal back to the trial court to determine whether arbitration is appropriate.
The law firm of Glassman, Edwards, Wyatt, Tuttle & Cox, P.C. filed a lawsuit against B.J. Wade, a former partner, and Shannon Crowe, a former paralegal, alleging fraud and breach of their duties to the firm. Mr. Wade and Ms. Crowe both asked the trial court to send their cases to arbitration, as required by agreements they maintain govern resolution of each case. The firm, however, asserts that none of the agreements require arbitration.
The trial court consolidated the cases and initially ordered the parties to proceed with limited discovery to determine whether the cases were subject to arbitration. When disagreement arose, however, the trial court expanded the scope of discovery to include “all necessary documents to conduct a meaningful attempt at resolution of this matter.” The trial court also ordered the parties to mediation in an attempt to resolve all of their disputes. The Tennessee Supreme Court granted the request of Mr. Wade and Ms. Crowe for an immediate appeal.
In a unanimous opinion issued today, the Supreme Court concluded that the trial court erred in ordering discovery without limiting the scope of discovery to the issue of the enforceability of the arbitration provisions and erred in ordering the parties to mediation in an effort to resolve all aspects of their disputes.
The Supreme Court ordered that the case be returned to the trial court to determine whether arbitration was required of any dispute between the parties under any of the agreements at issue. The Court also held that discovery must be limited to the issue of whether the arbitration clauses contained in the agreements are enforceable.
The court's opinion is linked here.
Wednesday, April 24, 2013
From the web page of the Ohio Supreme Court:
The Ohio Supreme Court Board of Commissioners on Grievances & Discipline no longer advises that a lawyer may not practice with more than one firm in Ohio at the same time, according to an advisory opinion.
Finding “substantial justification for a new perspective on practice in multiple firms” and considering “the context of current rules and modern practice,” the board concluded in Opinion 2013-1 that practice in multiple firms can occur in compliance with the Rules of Professional Conduct.
The board withdrew three previous advisory opinions on the issue. The reasoning behind the update includes, among other things, the fact that other jurisdictions have ruled that the practice is permissible, an expanded definition of “firm,” and financial considerations for lawyers in smaller communities who work more than one part-time job.
The opinion’s syllabus gives the following guidance.
“A lawyer who engages in simultaneous practice in multiple firms must recognize the potential ethical issues connected with such practice. The lawyer has to be diligent in avoiding conflicts of interest, and the imputation of conflicts will apply across all associated ‘firms.’ The lawyer is also required to scrupulously maintain client confidentiality and professional independence. As part of the lawyer’s duty to refrain from false, misleading, or nonverifiable communications about the lawyer or the lawyer’s services, the lawyer must inform his or her clients of all multiple firm associations."
Thursday, March 14, 2013
The New Jersey Supreme Court has issued an opinion that amends RPC 7.5 to allow the use of a law firm trade name "so long as [the name] describes the nature of the legal practice in terms that are accurate, descriptive, and informative, but not misleading, comparative, or suggestive of the ability to obtain results."
The court considered the trade name Alpha Center for Divorce Mediation, P.C. and concluded that all of the name was permissible save for the "Alpha." The rest of the name, along with the name of a managing New Jersey attorney, passes muster.
Alpha is impermissibly comparative, like (as the court had suggested) "Best Tax Lawyers" and "Tax Fixers" would be.
The court also directed that a committee be established to implement its new Rule.
The case had been remanded in 2009 and reargued twice after the remand.
Question: What if your last name is Best? What if I change my name to Mike Superlawyer? (Mike Frisch)
Thursday, February 21, 2013
The Rhode Island Supreme Court affirmed the grant of summary judgment to an attorney in a suit for fees against a former client.
The attorney had represented the client in actions against her late father's estate for a 15% contingency fee.
After the claim was reduced to settlement, the attorney collected his fees as payments were recovered. The client later discharged the attorney and claimed no obligation to continue to pay.
The court found that the attorney's rights under the contingent fee agreement had fully vested when the underlying claim was settled. Although the client was free to discharge the attorney, such action "does not alter his entitlement to fees already earned." (Mike Frisch)
Monday, June 18, 2012
A plaintiff's verdict in a legal malpractice case has been reversed by the Georgia Supreme Court.
The court found error in the admission of expert testimony on causation:
...the second jury in a malpractice action is not deciding what the first jury would have done in the underlying case had the attorney not been negligent, but only what a reasonable jury would have done had the underlying case been tried without the attorney negligence alleged by the plaintiff. The second jury does this by independently evaluating the evidence in the underlying case as it should have been presented to determine whether it belives that the plaintiff has a winning case, not by deciding whether some prior jury may or may not have believed that the plaintiff had a winning case...the Court of Appeals was incorrect in its conclusion that the jury in a malpractice case was tasked with deciding an issue that could not be resolved by the average lay person. Because the jury in the malpractice case was not being asked to decide what a prior jury would have done, it was merely being asked to do what any jury in a discrimination lawsuit would do, which is, evaluate the evidence in the case and decide the case on the merits. This is a task solely for the jury, and that is not properly the subject of expert testimony.
The inadmissible testimony on the ultimate issue resulted in reversal of the judgment. (Mike Frisch)