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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. Insurance Defense (posted July 23, 2024) APR Constr., Inc. v. Premier Claims Mgmt., LLC, 2024 WL 3464520 (Cal. App. 4th Dist. Unpub. July 19, 2024). APR, a construction company, did work for Housing Commission. Commission sued APR over that work. APR cross-claimed. The Commission claims were settled by APR's liability carrier ("InsCo"). InsCo had hired an independent insurance adjuster ("Adjuster") for that case. APR brought this suit claiming that, somehow, InsCo and Adjuster, in settling the Commission claims, had deprived APR of its cross-claims. Part of this suit is APR's claim that Adjuster had failed to disclose the fact that a lawyer ("Lawyer") in the law firm retained by InsCo to defend APR, was part owner of Adjuster. The trial court granted the Adjuster summary judgment on those claims. In this unpublished opinion the appellate court affirmed. In short, the court said that Adjuster's relationship was with InsCo, not with APR. Because Adjuster had not made any affirmative misstatements to APR about Lawyer's part ownership of Adjuster -- Adjuster said nothing about it -- APR had no claim. Class Action (posted July 18, 2024) Crews v. Rivian Auto., Inc., 2024 WL 3447988 (C.D. Cal. July 17, 2024). In this securities class action, the plaintiffs seek class certification. The only lawyer conflict-of-interest issue is class counsel's relationship with the lead plaintiff. In this opinion, certifying the class, the court saw no problem: "Class Counsel have simply represented [lead plaintiff] in several prior securities actions" (some, "ongoing"). Former Client (posted July 17, 2024) X Corp. v. Bright Data Ltd., 2024 WL 3408220 (N.D. Cal. July 12, 2024). In this case X Corp., a social media company owned by Elon Musk, is suing Bright Data for Bright Data's "data scraping" practices. Quinn Emanuel ("Quinn") is representing X Corp. Bright Data moved to disqualify Quinn in this case because Quinn earlier represented Bright Data. In this opinion the court granted the motion. Although the court referred to Quinn's duty of "loyalty" to its former client, Bright Data, the analysis was pure "substantial relationship," focussing on confidentiality. Quinn's engagement letter to Bright Data had advance waiver language. But, in it, Quinn agreed not to take on a future matter adverse to Bright Data if the future matter was "substantially related" to the engagement, mirroring Rule 1.9. Quinn's task in the earlier representation was to analyze Bright Data's ability to withstand attacks on it data scraping business model. In this case Quinn, on behalf of X Corp., is attacking Bright Data's data scraping practices. [Our note: We do not know enough about the parties' businesses, or about the technology, to know if the court's lengthy analysis holds water.] 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. Privilege (posted June 29, 2024) In re Kalahari Resorts,
No. 03-24-00271-CV (Tex. App. 3d Dist. June 26, 2024). Employee No. 1
was driving a vehicle while drunk and injured several people. No. 1 was
killed. No. 1 was a bartender at Kalahari's bar. No. 1 had been drinking
excessively at the bar just before the accident. Employee No. 2, also a
bartender for Kalahari, served a number of those drinks. The injured
persons sued Kalahari and No. 2, among others, for negligence and dram
shop violations. Law Firm began representing both Kalahari and No. 2.
Well into the case someone suggested to Law Firm that it might have a
conflict representing both. Law Firm withdrew, and separate law firms
appeared for those defendants. The injured parties sought additional
discovery regarding the cause of Law Firm's withdrawal. The trial court
ordered the additional discovery. Kalahari appealed (sought mandamus).
In this opinion the appellate court reversed (granted provisional
mandamus). The issues involved the application of lawyer-client
privilege and work product protections for the communications among the
parties, their lawyers, and, importantly, the liability carriers. The
analysis was Texas-centric and too lengthy to reward repeating here. The
central theme was that no new facts arose regarding the conflict. The
communications essentially were all law and strategy and, thus,
protected. [Note: These, too, will appear at the This and That pages.] Nothing current. APPEALABILITY (To read full article, click here.) Nothing current. ARBITRATION OF MALPRACTICE CLAIMS (To read the full article, click here. Nothing current. BANKRUPTCY (To read full article, click here.) (posted July 5, 2024) In re Enviva Inc., 2024 WL 2795274 (E.D.
Va. July 2, 2024). In May 2024 the bankruptcy judge denied Debtors'
application to employ Law Firm as "counsel for the Debtors in Possession
pursuant to 11 U.S.C § 327(a)." Law Firm's other representations raised
a number of issues, possibly the most difficult being Law Firm's
relationship with a "$14 million-dollar-a-year client." That client, and
its affiliates own 43% of Debtors' equity. Debtors moved for
reconsideration of the denial. In this opinion the bankruptcy judge
denied the motion. Law Firm proposed to set up a screen and alter the
compensation of certain of its lawyers. It also suggested that the
Debtor's board create a "Plan Evaluation Committee." The court poked
holes in each proposition and found that its earlier ruling was not a
"manifest injustice" under the rules governing reconsideration. 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 June 29, 2024) Braxton v. Clark County School Dist., No.
2:23-cv-00144-JAD-MDC (D. Nev. June 6, 2024). Plaintiff, represented by
Law Firm, has sued District because of alleged abuse of Plaintiff's
child. Law Firm has hired Lawyer, formerly an in-house lawyer for
District. District moved to disqualify Law Firm. While at District,
Lawyer had no involvement with Plaintiff's child, but did advise
District on laws and regulations involved in this case. In this opinion
the magistrate judge recommended that Law Firm be ordered to screen
Lawyer from this case but that Law Firm not be disqualified. CLASS ACTIONS (To read full article, click here.) (posted July 18, 2024) Crews v. Rivian Auto., Inc., 2024 WL
3447988 (C.D. Cal. July 17, 2024). In this securities class action, the
plaintiffs seek class certification. The only lawyer
conflict-of-interest issue is class counsel's relationship with the lead
plaintiff. In this opinion, certifying the class, the court saw no
problem: "Class Counsel have simply represented [lead plaintiff] in
several prior securities actions" (some "ongoing"). (posted June 26, 2024) Angel v. United States, 2024 WL 3154695
(U.S. Ct. Cl. June 25, 2024). Plaintiff brought this case based upon dividend rights
of shareholders of Fannie Mae and Freddie Mac. Plaintiff purports to act
as class representative and class counsel. In this opinion the court
granted Defendant's Rules 12(b)(1) and 12(b)(6) motion to dismiss. The
bases for the ruling included untimeliness, issue preclusion, and
implausibility, but not Plaintiff's conflict of interest. However,
Footnote 1 contains a useful summary of authorities on the impropriety
of acting as both class representative and class counsel. 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.) (posted July 4, 2024) Ross v. Ross, 2024 WL 3260033 (Tex. App.
14th Dist. July 2, 2024). Divorce. In deciding the division of the
estate, the trial court admitted the expert testimony of H's CPA on the
value of H's business. W claims that CPA has a conflict of interest
because, in one tax year, CPA had filed a joint tax return for both H
and W. In this opinion the appellate court affirmed the use of CPA.
During that tax year the couple's only income was H's. Thus, W had no
reason to share confidences with CPA. And, W made no other claim that
she had shared confidences with CPA. FORMER CLIENT (To read full article, click here.) (posted July 17, 2024) X Corp. v. Bright Data Ltd., 2024
WL 3408220 (N.D. Cal. July 12, 2024). In this case X Corp., a social
media company owned by Elon Musk, is suing Bright Data for Bright Data's
"data scraping" practices. Quinn Emanuel ("Quinn") is representing X
Corp. Bright Data moved to disqualify Quinn in this case because Quinn
earlier represented Bright Data. In this opinion the court granted the
motion. Although the court referred to Quinn's duty of "loyalty" to its
former client, Bright Data, the analysis was pure "substantial
relationship," focussing on confidentiality. Quinn's engagement letter
to Bright Data had advance waiver language. But, in it, Quinn agreed
not to take on a future matter adverse to Bright Data if the future
matter was "substantially related" to the engagement, mirroring Rule
1.9. Quinn's task in the earlier representation was to analyze Bright
Data's ability to withstand attacks on it data scraping business model.
In this case Quinn, on behalf of X Corp., is attacking Bright Data's
data scraping practices. [Our note: We do not know enough about the
parties' businesses, or about the technology, to know if the court's
lengthy analysis holds water.] (posted July 9, 2024) Veeva Sys. Inc. v. Tact.AI Techs., Inc.,
No. 23-1032 (D. Del. July 3, 2024). Patent Infringement case. Law Firm
represents Defendant. A Law Firm partner ("Lawyer") is a lawyer of
record for Defendant. Earlier, Lawyer, at another firm, represented
Plaintiff in patent matters. Plaintiff moved to disqualify Lawyer and
Law Firm in this case. In this opinion the court granted the motion.
First, the last point: Plaintiff offered to "walk away" (drop the
matter) if Law Firm would screen Lawyer from the case. Electing "to go
all-or-nothing," Law Firm refused to screen. The main issue is
substantial relationship under Rule 1.9. As in many substantial
relationship analyses the thing is in the eye of the beholder. Briefly,
both representations involved digital messaging software. After a
lengthy, fact-specific, discussion the court concluded that the
representations involved "the same [Plaintiff] technology," based upon a
"troubling technical overlap." 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.) (posted July 23, 2024) APR Constr., Inc. v. Premier Claims Mgmt., LLC,
2024 WL 3464520 (Cal. App. 4th Dist. Unpub. July 19, 2024). APR, a
construction company, did work for Housing Commission. Commission sued
APR over that work. APR cross-claimed. The Commission claims were
settled by APR's liability carrier ("InsCo"). InsCo had hired an
independent insurance adjuster ("Adjuster") for that case. APR brought
this suit claiming that, somehow, InsCo and Adjuster, in settling the
Commission claims, had deprived APR of its cross-claims. Part of this
suit is APR's claim that Adjuster had failed to disclose the fact that a
lawyer ("Lawyer") in the law firm retained by InsCo to defend APR, was
part owner of Adjuster. The trial court granted the Adjuster summary
judgment on those claims. In this unpublished opinion the appellate
court affirmed. In short, the court said that Adjuster's relationship
was with InsCo, not with APR. Because Adjuster had not made any
affirmative misstatements to APR about Lawyer's part ownership of
Adjuster -- Adjuster said nothing about it -- APR had no claim. 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.) Former Client (posted July 9, 2024) U.S. v. Ho, No.
24-1883 (9th Cir. July 2, 2024). In this criminal case Defendant is
charged with financial crimes. The Government has listed a witness, whom
Defendant's law firm ("Law Firm") had previously represented in this
case. The Government moved to disqualify Law Firm because of that
earlier representation. The trial court granted the motion. Defendant
sought mandamus. In this opinion the appellate court denied mandamus
(affirmed the disqualification). The court agreed with the trial court's
finding that there was a "serious potential" that Law Firm, would have
to violate the witness' confidences during cross, or pull their punches
during cross, harming Defendant. ZERO SUM GAMES (To read full article, click here.) Nothing current. Home/Table of Contents Website powered by Network Solutions® |
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