Defendant filed an interlocutory appeal challenging the district court's denial of defendant's motion to dismiss based on his assertion of Texas's attorney immunity. Plaintiff alleged that defendant conspired with two others to defraud her into purchasing a Texas company owned by one of the defendants, Paul Rembach. The district court concluded that Texas's attorney immunity was inapplicable because defendant's representation of Rembach occurred during a business transaction (a stock transfer) and was unrelated to litigation or an otherwise adversarial context. The Fifth Circuit held, however, that defendant took actions that constituted fraud independent of his duties as an attorney and would not qualify as "acts taken and communications made to facilitate the rendition of legal services" to the client. Defendant could not shield his own willful and premeditated fraudulent actions from liability simply on the ground that he was an agent of his client. The court explained that independently fraudulent conduct was foreign to the duties of an attorney and fell outside the scope of client representation. Because defendant failed to establish the scope of his representation of Rembach and that his alleged conduct fell within that scope, the court affirmed the district court's judgment on those alternative grounds. View "Kelly v. Nichamoff" on Justia Law

Circle, a family-owned general contractor, built 42 Army warehouses. Over a period of seven years, a subcontractor, Phase, paid two electricians about $9,900 less than the wages mandated by the Davis-Bacon Act, rendering false some compliance statements that Circle submitted to the government with its invoices. The government pursued Circle for nearly a decade of litigation, although Phase had paid $15,000 up front to settle the underpayment. The government sought $1.66 million, of which $554,000 was purportedly “actual damages” under a theory that all of Phase’s work was “tainted.” The Sixth Circuit rejected that theory, reversed an award of $763,000 to the government, and remanded for an award of $14,748, stating that “in all of these warehouses, the government turns on the lights every day.” Circle has paid its attorneys $468,704. The Equal Access to Justice Act provides that, if a court awards damages to the federal government, but the government’s original demand for damages was both “substantially in excess of the judgment finally obtained” and “unreasonable when compared with such judgment,” the court must “award to the [defendant] the fees and other expenses related to defending against the excessive demand,” 28 U.S.C. 2412(d)(1)(D). The Sixth Circuit held that Circle was entitled to an award unless it “committed a willful violation of law or otherwise acted in bad faith, or special circumstances make an award unjust.” The government did not establish either exception. View "Wall v. Circle C Construction, LLC" on Justia Law

The United States appealed the district court's order precluding the government from introducing at trial certain testimony by a co-defendant turned government witness on the basis of the common-interest rule of attorney-client privilege. The Second Circuit reversed the judgment of the district court, finding nothing in the circumstances in this case to support the application of the privilege. Here, the excluded statements were not made to, in the presence of, or within the hearing of an attorney for any of the common-interest parties; nor did the excluded statements seek the advice of, or communicate advice previously given by, an attorney for any of the common-interest parties; nor were the excluded statements made for the purpose of communicating with such an attorney. View "United States v. Krug" on Justia Law

In 1996, James Harper was to appear before Judge John H. Sheffield at the Lee County Justice Court on charges of driving under the influence and having an expired inspection sticker. But Harper failed to appear, and Judge Sheffield issued a warrant for his arrest. The trial went forward, and Judge Sheffield convicted Harper on both charges. Judge Sheffield then imposed a six-month suspended sentence and a $600 fine for the DUI and a $50 fine for the inspection sticker. That same day, Harper entered into a payment plan with the Lee County Justice Court for his $600 fine. Two days later, he paid $50, which was credited to the DUI case number. Harper appealed his DUI conviction. The conviction was upheld; and he satisfied the terms of his sentence. In 2013, Harper again was arrested for DUI in Lee County. At that point he was told he could not post bond until he resolved a matter with Judge Sheffield. The next day, Harper appeared before Judge Sheffield, who accused Harper of failing to pay the fines imposed for the 1996 justice-court convictions. Despite Harper’s protestation that he had appealed to county court, lost, and paid his fines, and despite the fact that Judge Sheffield had with him the justice-court case files for Harper’s earlier convictions, both of which contained Harper’s notice of appeal and the county-court notification, Judge Sheffield sentenced Harper to serve six months at the Lee County Work Center for the DUI conviction. Harper served four months in the work center before being released due to an infection requiring hospitalization. The Mississippi Supreme Court determined Judge Sheffield’s conduct was not due to an innocent mistake, it amounted to judicial misconduct. So the Court imposed a public reprimand, a 120-day suspension without pay, and a $3,000 fine, and assessed all costs of the proceedings to Judge Sheffield. View "Mississippi Comm'n on Judicial Performance v. Sheffield" on Justia Law

When plaintiff learned that the State Bar Association of North Dakota (SBAND) was using his compulsory fees to oppose a measure that he volunteered time and money to support, he filed suit seeking declaratory and injunctive relief. In Knox v. Service Employees International Union, Local 1000, 567 U.S. 298 (2012), a public-sector union provided an annual Hudson notice calculating germane expenses and permitting non-members to opt out of non-germane expenses by objecting within thirty days. The Eighth Circuit held that the opt-out issue debated by the Supreme Court in Knox was simply not implicated by SBAND's revised license fee statement. Accordingly, because Knox did not overrule prior cases holding that the First Amendment does not require an opt-in procedure, the court affirmed the district court's grant of summary judgment and dismissal of the case. View "Fleck v. Wetch" on Justia Law

In a class action against Sears concerning a defect in washing machines, the district court awarded class counsel $4.8 million, 1.75 times the fees counsel originally charged for their work on the case. The court reasoned that the case was unusually complex and had served the public interest and that the attorneys obtained an especially favorable settlement. The amount of damages that the class will receive has not yet been determined. The district court accepted Sears' estimate that the class members would receive no more than $900,000. The Seventh Circuit reversed, noting that the “case wasn’t very complex—it was just about whether or not Sears had sold defective washing machines.” A district court should compare attorney fees to what is actually recovered by the class and presume that fees that exceed the recovery to the class are unreasonable. The presumption is not irrebuttable, but in this case, class counsel failed to prove that a reasonable fee would exceed $2.7 million. View "Barnes v. Sears, Roebuck and Co." on Justia Law

Rumsey, a Department of Justice employee, protested grant-making decisions and ultimately went to the media and members of Congress and filed a complaint with the Inspector General, alleging fraud. Her efforts resulted in corrective action. Rumsey alleged that the agency subsequently gave her improperly low performance ratings, moved some of her job duties to other employees, and canceled her telework agreement. She prevailed in an individual right of action appeal with the Merit Systems Protection Board, alleging whistleblower reprisal. Rumsey sought attorney’s fees under 5 U.S.C. 1221(g)(1)(B). At the time of that request, Rumsey and Slavet, one of the three lawyers that represented Rumsey during the Board proceedings, were in fee dispute before the District of Columbia Bar, Attorney/Client Arbitration Board. Rumsey “distanced herself from Slavet,” who had been Rumsey’s principal lawyer before and during the initial hearing before the administrative judge. The AJ had previously awarded sanctions based on Slavet’s failure to respond to discovery requests. The Board affirmed the AJ’s refusal to award attorney’s fees for Slavet’s services. Slavet and Rumsey settled their fee dispute, agreeing that Rumsey would pay $120,000 of the $145,445 sought by Slavet. The Federal Circuit reversed. Rumsey carried her burden of showing entitlement to some award of attorney’s fees. View "Rumsey v. Department of Justice" on Justia Law

The U.S. Trustee alleged that Husain’s bankruptcy filings regularly failed to include debtors’ genuine signatures. Bankruptcy Judge Cox of the Northern District of Illinois made extensive findings, disbarred Husain, and ordered him to refund fees to 18 clients. When he did not do so, Judge Cox held him in contempt of court. The court’s Executive Committee affirmed the disbarment and dismissed the appeal from the order holding Husain in contempt but did not transfer the contempt appeal to a single judge, although 28 U.S.C. 158(a) entitles Husain to review by at least one district judge. The Seventh Circuit affirmed the disbarment and remanded the contempt appeal for decision by a single judge. The court noted extensive evidence that Husain submitted false signatures, documents that could not have been honest, and petitions on behalf of ineligible debtors; he omitted assets and lied on the stand during the hearing. The court noted that Husain’s appeal was handled under seal and stated that: There is no secrecy to maintain, no reason to depart from the strong norm that judicial proceedings are open to public view. View "In re: Husain" on Justia Law

In 2012, Koehn filed a pro se complaint against his former employers. A magistrate held a settlement conference and appointed counsel for Koehn. The parties did not settle. Koehn obtained new counsel. The court held a telephonic status hearing and inquired about settlement negotiations. Defense counsel explained that he was new to the case and that, based on conversations with Defendants’ prior counsel, he believed that Defendants’ insurer had proposed a settlement of about $150,000. Koehn’s counsel stated that she had never heard that figure and that, given that information, a settlement conference might be productive. Defense counsel agreed and the court scheduled a conference. At that conference, Defendants offered less than $75,000, which Koehn had rejected in 2015. Koehn rejected the offer again. When the conference ended, the court stated: “At the conclusion of the jury trial, counsel for the Plaintiff may submit a request for attorney’s fees and costs associated with the unnecessary settlement conference held based upon defense counsel’s representations.” Koehn lost at trial but requested $3,744 in fees and $552.85 in costs associated with the 2016 conference. The district court granted Koehn’s motion; FRCP 16 allows the imposition of sanctions where a party’s failure to timely and candidly communicate a change in settlement posture results in an unnecessary settlement conference. The Seventh Circuit affirmed. Defendants did not participate in the settlement conference in good faith. View "Koehn v. Tobias" on Justia Law

Attorney King approached Terry, a supposed drug dealer, at a strip club. King offered to help Terry launder drug money. Terry, actually a confidential informant, told the police, who arranged several meetings that Terry secretly recorded. Terry told King that he had drugs shipped in from Mexico but that he didn’t sell the product at the “street level.” None Terry's statements were true. King proposed to imitate what he had seen on Breaking Bad: One option was to use a “cash heavy” entertainment business. He also suggested funneling money through his IOLTA trust account used by attorneys to hold client money: King would provide fictitious legal services, deduct payments from the account, and return the remaining money to Terry. They agreed to the IOLTA account approach. Terry gave King $20,000. King promised to deposit it in his IOLTA account. King gave Terry a check for $2,000 in February and another for the same amount in March. King was convicted of two counts of money laundering and one count of attempted money laundering and was sentenced to 44 months in prison. The Sixth Circuit affirmed, rejecting arguments that the introduction of recorded conversations between him and the informant violated his Sixth Amendment right to confront witnesses and that the court improperly allowed the prosecution to ask him about his prior arrest for cocaine possession. View "United States v. King" on Justia Law