Justia Legal Ethics Opinion Summaries

Kennedy had decades of experience working for Schneider Electric and taught classes, part-time, in electrical and industrial safety at Prairie State community college. Schneider requires its employees to obtain advance approval before they teach classes or submit articles for publication. Without obtaining permission, Kennedy published articles about power-distribution equipment, identifying himself as a Prairie State instructor. When Schneider learned of these articles a manager contacted Prairie State to ask about Kennedy’s course materials, which she worried might contain proprietary information. Weeks later, while reviewing instructors' credentials, Prairie State realized that Kennedy did not possess the qualifications to teach and did not rehire Kennedy as an adjunct instructor. A year later, Kennedy sued Schneider, alleging defamation and malicious interference with an advantageous relationship. The court granted Schneider summary judgment, finding that Prairie State acted solely because Kennedy did not meet its credentialing requirements and not because of Schneider’s telephone call. More than a year later, Kennedy moved to set aside the judgment (Federal Rule of Civil Procedure 60(d)(3)), asserting that Schneider’s lawyers knowingly submitted perjured evidence. The court denied the motion, stating that the cited evidentiary discrepancies were known at the time of summary judgment, and granted Rule 11 sanctions against Kennedy’s lawyer for having to defend against the motion ($10,627.16). The Seventh Circuit affirmed. Kennedy could have challenged the same evidence on summary judgment. If the court made a mistake, Kennedy could have asked for reconsideration or appealed. View "Kennedy v. Schneider Electric" on Justia Law

Cathedral Buffet, an Ohio for-profit corporation, does not generate a profit. Its sole shareholder is Grace Cathedral, a 501(c)(3) non-profit religious organization, which subsidizes the restaurant. The restaurant separated its workers into “employees” and “volunteers.” Volunteers performed many of the same tasks as employees, who received an hourly wage. Reverend Angley recruited volunteers from the pulpit on Sundays, suggesting that members who repeatedly refused to volunteer were at risk an unforgivable sin. The Department of Labor (DOL) filed suit; the district court held that Buffet’s religious affiliation did not exempt it from Fair Labor Standards Act. The Sixth Circuit reversed. To be considered an employee under the FLSA, a worker must first expect to receive compensation; Buffet volunteers had no such expectation. Buffet then sought “prevailing party” costs and attorney’s fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. 2412, arguing that the DOL’s position throughout the litigation was not substantially justified. The Sixth Circuit declined to address the issue: “in the usual case in which fees are sought for the entire litigation, the determination of whether the government was ‘substantially justified’ . . . is for the district court” because that court “may have insights not conveyed by the record.” Buffet did not wish to argue before the district court, which adopted the DOL’s position, but that is not a legitimate reason to forgo judicial economy. The district court is better-equipped to determine the fees, if any, that should be awarded for work at that level. View "Acosta v. Cathedral Buffet, Inc." on Justia Law

This case arose from a series of transactions in which petitioners Rocky Mountain Exploration, Inc. and RMEI Bakken Joint Venture Group (collectively, “RMEI”) sold oil and gas assets to Lario Oil and Gas Company (“Lario”). In the transaction, Lario was acting as an agent for Tracker Resource Exploration ND, LLC and its affiliated entities (collectively, “Tracker”), which were represented by respondents Davis Graham & Stubbs LLP and Gregory Danielson (collectively, “DG&S”). Prior to RMEI’s sale to Lario, RMEI and Tracker had a business relationship related to the oil and gas assets that were ultimately the subject of the RMEI-Lario transaction. The RMEI-Tracker relationship ultimately soured; Tracker and Lario reached an understanding by which Lario would seek to purchase RMEI’s interests and then assign a majority of those interests to Tracker. Recognizing the history between Tracker and RMEI, however, Tracker and Lario agreed not to disclose Tracker’s involvement in the deal. DG&S represented Tracker throughout RMEI’s sale to Lario. In that capacity, DG&S drafted the final agreement between RMEI and Lario, worked with the escrow agent, and hosted the closing at its offices. No party disclosed to RMEI, however, that DG&S was representing Tracker, not Lario. After the sale from RMEI to Lario was finalized, Lario assigned a portion of the assets acquired to Tracker, and Tracker subsequently re-sold its purchased interests for a substantial profit. RMEI then learned of Tracker’s involvement in its sale to Lario and sued Tracker, Lario, and DG&S for breach of fiduciary duty, fraud, and civil conspiracy, among other claims. As pertinent here, the fiduciary breach claims were based on RMEI’s prior relationship with Tracker. The remaining claims were based on allegations that Tracker, Lario, and DG&S misrepresented Tracker’s involvement in the Lario deal, knowing that RMEI would not have dealt with Tracker because of the parties’ strained relationship. Based on these claims, RMEI sought to avoid its contract with Lario. Lario and Tracker eventually settled their claims with RMEI, and DG&S moved for summary judgment as to all of RMEI’s claims against it. The district court granted DG&S’s motion. The Colorado Supreme Court granted certiorari to consider whether: (1) Lario and DG&S created the false impression that Lario was not acting for an undisclosed principal (i.e., Tracker) with whom Lario and DG&S knew RMEI would not deal; (2) an assignment clause in the RMEI-Lario transaction agreements sufficiently notified RMEI that Lario acted on behalf of an undisclosed principal; (3) prior agreements between RMEI and Tracker negated all previous joint ventures and any fiduciary obligations between them; (4) RMEI stated a viable claim against DG&S for fraud; and (5) RMEI could avoid the Lario sale based on statements allegedly made after RMEI and Lario signed the sales agreement but prior to closing. The Supreme Court found no reversible error and affirmed. View "Rocky Mountain Exploration, Inc. and RMEI Bakken Joint Venture" on Justia Law

This appeal stemmed from an action alleging wrongful conduct by Nike against Havensight (the tortious interference action). The tortious interference action was filed after Havensight's prior action against Nike, alleging infringement upon a soccer brand owned by Havensight (the infringement action), was dismissed with prejudice. The Ninth Circuit dismissed Havensight's appeal as to the sanctions imposed under 28 U.S.C. 1927, the vexatious litigant order, the denial of plaintiff's motion to strike, and the denial of plaintiff's application for default because those matters were not included in the notice of appeal. The panel dismissed the amended complaint because the notice of appeal was untimely where plaintiff's premature filing of a post-judgment motion did not extend the otherwise applicable appeal period. Finally, the panel deferred to the district court's factual findings as to whether plaintiff's filings were sufficiently frivolous or abusive such that Rule 11 sanctions were appropriate, and affirmed the sanctions order because the findings were amply supported by the record. View "Havensight Capital LLC v. Nike, Inc." on Justia Law

Fryer and the Alliance for Water Efficiency collaborated on a study about drought. The Alliance worked on funding. Fryer circulated a draft of the report. The Alliance expressed concern with the methodology and sued Fryer under the Copyright Act, 17 U.S.C. 101. Under a settlement Fryer agreed to turn over his data from public utilities in exchange for $25,000. If any utility had disclosed data with a confidentiality agreement, the Alliance was required to secure a release. Each party could publish a report, but could not acknowledge the other’s involvement. The parties have litigated ever since. The district court concluded that the Alliance was entitled to specific data and that Fryer was bound by the settlement to refrain from acknowledging disputed organizations unless they contacted him first and asked to be recognized. The judge required the Alliance to provide those organizations with Fryer’s contact information. The Seventh Circuit reversed solely on the acknowledgment issue. Fryer returned to the district court, seeking restitution for injuries caused by the court’s erroneous injunction and attorney’s fees under section 505 of the Copyright Act for having prevailed in the first appeal. The Seventh Circuit affirmed denial of both motions. Fryer does not present genuine claims for restitution; he seeks to relitigate unrelated claims for breach of the settlement. He did not prevail on the Alliance’s copyright claim. View "Alliance for Water Efficiency v. Fryer" on Justia Law

The Supreme Judicial Court dismissed this interlocutory appeal brought by Defendants challenging the superior court’s denial of their motion to seal or strike, holding that Defendants did not demonstrate the irreparable harm necessary for appellate review of the court’s interlocutory order.Plaintiff, the respondent in an attorney discipline proceeding, filed a complaint against Judge Marian Woodman and Judge Nancy Carlson based on their actions and involvement in the disciplinary proceeding. Defendants filed motions to dismiss the complaint and sought imposition of sanctions. After Plaintiff filed a response to the motions the judges filed a motion to seal or strike certain paragraphs of Plaintiff’s response, in which Plaintiff made assertions about the judges and a family member of one of them. The superior court denied the motion. The judges appealed. The Supreme Judicial Court dismissed the appeal, holding that the appeal did not fall within an exception to the final judgment rule. View "Carey v. Maine Board of Overseers of the Bar" on Justia Law

JCI is a manufacturing company with its principal place of business in Illinois. The Shein Law Center is a law firm based in Pennsylvania. Simon Greenstone Panatier Bartlett is a law firm based in Texas, with offices in Texas and California; its partners and shareholders are residents of those states. The two firms sued JCI on behalf of their clients in Pennsylvania, California, and Texas state courts. JCI alleges these suits were part of a conspiracy to defraud JCI because the firms concealed information during discovery regarding their clients’ exposure to asbestos from other manufacturers’ products so that they could extract larger recoveries. The other manufacturers are bankrupt. After winning verdicts against JCI, the defendants allegedly filed claims against the bankrupt manufacturers’ trusts. JCI filed lawsuits against the law firms in the Northern District of Illinois alleging fraud, conspiracy, and violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961, The district court dismissed the cases for lack of personal jurisdiction. The Seventh Circuit affirmed. The law firms sent allegedly fraudulent communications to JCI through JCI’s local counsel in Texas, Pennsylvania, and California. Those communications were incidental to the litigation, which is the basis of JCI’s claims, so the communications were not enough to establish specific personal jurisdiction in Illinois. View "John Crane, Inc. v. Simon Greenstone Panatier Bartlett" on Justia Law

The Georgia Supreme Court granted a writ of certiorari in this case to decide whether, when a motion to recuse the trial judge is filed after the judge has orally held a party’s attorney in contempt, the recusal motion must be decided before the judge may properly proceed to enter a written contempt order. Michael O. Mondy, Esq. represented Moses Langford, the defendant in a breach of contract and trade secrets lawsuit brought in state court by Langford’s former employer, Magnolia Advanced Materials, Inc. Langford was also the plaintiff in an employment discrimination case against Magnolia brought in federal court in Georgia, and Magnolia was also the defendant in a trade secrets case brought by its competitor, Epoplex, in federal court in South Carolina. A few days after Epoplex issued a federal court subpoena to Langford requesting Magnolia documents, the trial judge in the state case entered an injunction prohibiting Mondy and Langford from directly or indirectly disclosing or permitting unauthorized access to Magnolia’s non-public information. Magnolia moved to quash the federal subpoena, and a federal magistrate judge entered an order staying compliance with the subpoena until further order. A few days later, Mondy filed an unsealed brief with 28 exhibits opposing the motion to quash. Because the brief was not sealed, Magnolia’s non-public information in the exhibits was made available not only to the general public but to Magnolia’s competitor Epoplex – to whom Mondy also directly sent a Dropbox link containing the brief and exhibits. Magnolia then filed a motion in the state case to hold Mondy and Langford in contempt of the injunction. Days later, Mondy moved the trial court to recuse the trial judge. The judge did not immediately rule on the recusal motion. Instead, the judge held Mondy in contempt, then voluntarily recused himself from further proceedings. Mondy appealed the contempt order. The Court of Appeals held that the trial judge could ignore the pending recusal motion and enter the contempt order. The Georgia Supreme Court disapproved that holding, concluding that under Uniform Rule of Superior Court 25.3, the entry of a written contempt order was an “act upon the merits” of the contempt proceeding that a trial judge whose impartiality has been formally called into question may not properly perform until the recusal motion has been decided. The Court concluded, however, that even assuming the motion to recuse in this case was not only filed with the clerk but also “presented” to the trial judge as Rule 25.3 required, the motion was legally insufficient on its face. Thus, if properly considered, the recusal motion would not have required the trial judge’s recusal, and the judge’s procedural error does not require the Supreme Court to vacate the contempt order that followed. Therefore, the Court ultimately affirmed the Court of Appeals. View "Mondy v. Magnolia Advanced Materials, Inc." on Justia Law

Three-and-a-half years ago, a Kentucky state court issued a judgment in plaintiffs’ favor against class-action plaintiffs’ attorney Chesley for $42 million. Since then, the plaintiffs have been trying to collect on that judgment. Chesley has successfully evaded them with the help of his confidantes. In the process, five lawyers have been disbarred; two have been put in jail. Chesley has managed to transfer most of his assets elsewhere, rendering himself judgment-proof and forcing the plaintiffs to file the fraudulent conveyance action underlying this appeal. While that fraudulent conveyance action was pending, Chesley initiated an Ohio state probate court action. He claims the action was started for legitimate purposes—to pay off his law firm’s creditors in a judicially-supervised forum. The district court disagreed. Sensing Chesley was using the probate action to continue to conceal his assets, it issued a preliminary injunction freezing those assets. In the time since the injunction was entered (and this appeal was filed), that probate action was dismissed and declared fraudulent. The Sixth Circuit affirmed the preliminary injunction, which is worded broadly enough to remain effective despite the probate action’s dismissal, and is still adequately supported by the record evidence and is still necessary. View "McGirr v. Rehme" on Justia Law

Lujan had a Chase credit card account, governed by an agreement with a provision stating “federal law and the law of Delaware” govern the agreement and a provision for attorney’s fees. When Lujan’s account had an unpaid balance in 2007, Chase assigned its claim to interim assignees. In 2011, PCC filed suit, alleging a debt of $8,831.90. PCC Vice President Shields verified the complaint. Lujan cross-complained against PCC, Shields, and interim assignees seeking damages under the Fair Debt Collection Practices Act, 15 U.S. C. 1692, and the Rosenthal Fair Debt Collection Practices. The court granted Lujan summary judgment as to PCC, applying Delaware’s three-year statute of limitations. On the cross-complaint, the court granted the other defendants summary judgment, finding that none met the statutory definition of a debt collector. The judgment is silent om statutory damages, leaving Lujan with only “attorney fees and costs" as provided by statute. The court awarded Lujan $140,550.51 in fees against PCC but denied the other defendants fees because the cross-complaint was not an action “on a contract” under Civil Code 1717. The appeals court affirmed Lujan’s summary judgment against PCC, Lujan’s award of attorney’s fees, and the interim assignees’ summary judgment and denial of fees. The court reversed summary judgment in favor of Shields and PCC’s attorney. View "Professional Collection Consultants v. Lujan" on Justia Law