Justia Legal Ethics Opinion Summaries

Articles Posted in U.S. 3rd Circuit Court of Appeals

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Reifer suffered a worker’s compensation injury at IU-20 where she provided special education. Her injuries prevented her from returning to work. She retained Attorney Russo. Russo carried legal malpractice insurance with Westport in compliance with the Pennsylvania Rules of Professional Conduct. When IU-20 initiated disciplinary proceedings against Reifer, Russo failed to appear at the hearing. When IU-20 terminated her, Russo failed to appeal. Russo filed suit alleging violation of Reifer’s employment rights, which he lost for failure to exhaust state remedies. When Reifer sought alternate employment, Russo advised her to answer an application question as to whether she had ever been terminated in the negative. Reifer was terminated and disciplined for the false answer. Reifer commenced a malpractice claim against Russo. Russo’s “claims-made” policy only covered losses claimed during the policy period or within 60 days of the policy’s expiration. Russo failed to inform Westport of the action until several months after the policy lapsed and he failed to secure a replacement policy. Westport refused to defend Russo. Russo admitted liability. A jury awarded Reifer $4,251,516. Russo assigned to Reifer his rights under the Westport policy. Reifer sought a declaratory judgment that Westport was required to show it was prejudiced by Russo’s failure to notify and, failing to do so, owed a duty to defend and indemnify. The federal district court, sua sponte declined to exercise jurisdiction and remanded to state court. The Third Circuit affirmed. View "Reifer v. Westport Ins. Corp." on Justia Law

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The client was the target of a grand jury investigation into alleged violations of the Foreign Corrupt Practices Act. The grand jury served a subpoena on the client’s former attorney and the government moved to enforce this subpoena and compel testimony, under the crime-fraud exception to the attorney-client privilege. The client sought to quash the subpoena by asserting the attorney-client privilege and work product protection. After questioning the attorney in camera, the district court found that the crime-fraud exception applied and compelled testimony. The Third Circuit affirmed, holding that the district court applied the correct standard in determining whether to conduct an in camera examination of a witness, requiring a showing of a factual basis adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies. The court did not abuse its discretion in applying that standard, in determining procedures for the examination, or in ultimately finding that the crime-fraud exception applied. View "In Re: Grand Jury Subpoena" on Justia Law

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The Millers retained Ettinger in 2008 to represent them in a landlord/tenant dispute. Over 23 months, Ettinger billed $43,000. The dispute settled for $9,500. The Millers paid Ettinger $20,000, but even before the landlord-tenant matter settled, Ettinger sought relief in Pennsylvania state court to accelerate the speed at which he was paid. He petitioned to withdraw as a counsel, first based on alleged failure to pay and then due to professed “lack of cooperation.” Both petitions were rejected, though the Millers were ordered to make “good faith” payments. Despite their continued payments, Ettinger sued the Millers, who filed for Chapter 7 bankruptcy protection the following month. Ettinger filed an adversary proceeding in the Bankruptcy Court to prevent discharge of the Millers’ remaining debt to him, alleging fraud. The Bankruptcy Court rejected the complaint and imposed a $20,000 sanction against Ettinger jointly with his attorney. The district court vacated on the ground that the sanctions violated the “safe harbor” requirements of Fed. R. Bankr. P. 9011, which requires 21 days between serving and filing a sanctions motion, during which period the challenged conduct may be remedied, but refused to remand for further consideration. The Third Circuit remanded with instructions to permit the Bankruptcy Court to consider alternative avenues to impose sanctions. View "In re: Miller" on Justia Law

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From 1895 to 1954 the Jersey City chrome manufacturing plant deposited 1.5 million tons of industrial waste into wetlands along the Hackensack River. In 1954, Honeywell’s predecessor purchased the plant and ended the dumping. The contaminated area was not cleaned up. In 1995, ICO, represented by the Terris law firm, filed a citizen suit under the Resource Conservation and Recovery Act, 42 U.S.C. 6901. The district court entered judgment for ICO in 2003, awarded more than $4.5 million in fees and expenses, and required Honeywell to pay future fees and costs for monitoring cleanup. The Third Circuit vacated the fee award. In 2005, Terris sued Honeywell based on the same contamination but relating to different areas, on behalf of Riverkeeper. The parties entered into consent decrees; Honeywell agreed to pay $5 million for fees and costs already incurred and to pay “reasonable” fees and expenses for monitoring. In 2009, the parties failed to agree on monitoring fees. The district court substantially upheld the fee requests, allowing Terris to be paid Washington, D.C. rates, rejecting challenges to the reasonableness of the hours expended, and holding that Rule 68 offers of judgment cannot be made in RCRA citizen suits. The Third Circuit vacated with respect to Rule 68 offers, upheld with respect to the hourly rates, and remanded with respect to the number of hours claimed. View "Interfaith Cmty. Org, v. Honeywell Int'l, Inc, " on Justia Law

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Ciavarella and another state court judge, Conahan, received $2.8 million in three years from a commercial builder, Mericle, and an attorney and businessman, Powell, during the “Kids for Cash” scandal in Luzerne County, Pennsylvania . Ciavarella committed hundreds of juveniles to detention centers co-owned by Powell, including many who were not represented by counsel, without informing the juveniles or their families of his conflict of interest. The judges, aware that they were under investigation, met with Mericle and Powell to coordinate their stories in 2008. Powell was wearing a recording device, exposing the judges’ efforts to obstruct justice. The judges pled guilty to wire fraud and conspiracy in exchange for an agreed 87-month sentence. Noting that the stipulated sentences were significantly lower than the advisory Sentencing Guidelines for the offenses, the district court rejected the plea agreement; the judges withdrew their pleas. Ciavarella proceeded to trial, was convicted of racketeering, honest services mail fraud, money laundering conspiracy, filing false tax returns, and several other related crimes and was sentenced to 336 months’ imprisonment, restitution, forfeiture, and a special assessment. The Third Circuit remanded for modification of the special assessment for mail fraud, but otherwise affirmed, rejecting an argument that the trial judge was biased. View "United States v. Ciavarella" on Justia Law

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On May 25, 2011, Lassiter filed a complaint alleging Fourth Amendment violations for excessive force and false arrest. The complaint stated that the incident giving rise to Lassiter’s cause of action took place on May 22, 2009. On August 2, 2011, defendants filed an answer asserting six affirmative defenses, but did not raise the two-year statute of limitations as a defense. During a pretrial conference on September 20, 2011, without being prompted by either party, the district court observed that the statute of limitations appeared to have expired but that defendants failed to raise the issue in their answer. Defendants’ counsel acknowledged that they had missed this issue. The court suggested that defendants could amend their answer. On February 23, 2012, over Lassiter’s opposition, the court granted leave to amend the answer. On May 29, the court dismissed the complaint as time-barred. The Third Circuit affirmed, holding that the court had authority to raise the statute of limitations issue during the Rule 16 conference. View "Lassiter v. City of Philadelphia" on Justia Law

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Freeman worked at PPG until his firing in 2008; PGW subsequently assumed PPG’s liabilities. PPG maintains a 40 percent interest in PGW. After losing his job, Freeman, age 60, sued PGW under the Age Discrimination in Employment Act, 29 U.S.C. 621. The parties entered a binding arbitration agreement, listing three potential arbitrators. Lally-Green, a law school teacher, formerly a state judge, appeared at the top of both lists. Lally-Green acknowledged that she “knew some people at PPG” and had taught a seminar with a PPG attorney. The parties proceeded with Lally-Green as their arbitrator. The proceeding was fair and thorough. Lally-Green concluded that Freeman lost his job because he “had limited recent sales experience ... [and] received average performance ratings in a poorly performing region.” Three months later, Freeman moved to vacate the decision, claiming that Lally-Green had failed to disclose campaign contributions that she had received from PPG and its employees during her campaign for a seat on the state’s highest court. These contributions totaled $4,500. Lally-Green had raised $1.7 million during her unsuccessful campaign. The district court denied the motion. The Third Circuit affirmed, noting that the law firm representing Freeman had contributed $26,000 to Lally-Green’s campaign. View "Freeman v. Pittsburgh Glass Works, LLC" on Justia Law

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Plaintiff’s counsel failed to file a notice of appeal within 30 days of the judgment or order (Federal Rule of Appellate Procedure 4(a)(1)(A)). Defendant sought attorneys’ fees and costs under FRCP 68. The motion was withdrawn. Plaintiff then moved for issuance of an order pursuant to RCP 58(e), or, in the alternative, for an order granting an extension of time to file a notice of appeal, arguing that his attorney’s failure to file a timely notice of appeal was caused by excusable neglect as the result of a busy caseload. The court granted the extension. The Third Circuit vacated the extension as improvidently granted and dismissed plaintiff’s appeal. A ruling in favor of plaintiff “in the current circumstances could be read as condoning and even rewarding otherwise avoidable mistakes—and even outright incompetence—on the part of even experienced attorneys.” View "Ragguette v. Premier Wines & Spirits" on Justia Law

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Attorneys Post and Reid were retained to defend a medical malpractice action. At trial, plaintiffs introduced evidence suggesting that Post and Reid had engaged in discovery misconduct. Fearing that the jury believed that there had been a “cover-up” involving its lawyers, and concerned with the “substantial potential of uninsured punitive exposure,” the hospital, represented by new counsel, settled the case for $11 million, which represented the full extent of its medical malpractice policy limits. The settlement did not release Post, Reid, the law firm where they began representation of the hospital, or their new firm from liability. The hospital threatened Post with a malpractice suit and sought sanctions. Post eventually brought claims of bad faith and breach of contract against his legal malpractice insurer. The district court awarded $921,862.38 for breach of contract. The Third Circuit affirmed summary judgment in favor of the insurer on the bad faith claim and remanded for recalculation of the award, holding that, under the policy, the insurer is responsible for all costs incurred by Post in connection with the hospital’s malpractice claim from October 12, 2005 forward and for all costs incurred by Post to defend the sanctions proceedings from February 8, 2006 forward. View "Post v. St. Paul Travelers Ins. Co." on Justia Law

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In a recusal motion, Rohn alleged that the district judge’s personal animosity toward her was creating an appearance of bias and prejudice against her clients. Sun, a defendant in one of seven underlying cases, sought discovery. Sun subpoenaed Rohn, seeking production of documents and scheduling of a deposition. Rohn sought to have the order requiring her to appear for deposition vacated. The Third Circuit denied the petition, but directed that discovery be overseen by a magistrate, and not the district judge about whom the recusal motion was focused. According to defendants, Rohn appeared for her deposition, but did not produce documents. Defendants moved for contempt under FRCP 45(e). The magistrate held Rohn in contempt and awarded attorney’s fees. The district judge affirmed without holding a hearing. The Third Circuit held that it had jurisdiction, then remanded. Rohn’s actions occurred outside of the magistrate’s presence and not in a proceeding where the magistrate was presiding with the consent of the parties; the magistrate was overseeing pretrial proceedings and should have certified the facts of the alleged contempt to the district judge, who in turn should have held a hearing to determine those facts. View "Wallace v. Kmart Corp." on Justia Law