Justia Legal Ethics Opinion Summaries

Appellants-attorneys Shawn Fitzpatrick and Timothy Flocos were sanctioned by the district court for certifying that their clients’ initial disclosures under Federal Rule of Civil Procedure 26(a)(1) were complete and correct even though the disclosures failed to mention evidence that Appellants later used during a deposition. Appellants appealed, asking the Fifth Circuit to reverse the district court’s decision and remit to them the monetary sanctions collected by the district court. Appellants argued that they used two recordings solely to impeach a witness' credibility; therefore, they were not required to disclose the recordings under Rule 26(a)(1). Appellants also argued that the district court failed to properly consider whether their decision to withhold the evidence at issue from the initial disclosures was substantially justified. Finding no reversible error in the district court's decision to sanction appellants, the Fifth Circuit affirmed. View "Olivarez v. GEO Group, Inc., et al" on Justia Law

Todd Hill, Roy Hill, Brian Hill, and Debra Hill Stewart were the children of Leroy Hill, who died testate in 2009. Deborah D. Hill, Leroy’s second wife, offered Leroy's will for probate. The Hill children hired attorneys Vincent Kilborn III and David McDonald to bring a breach-of-contract action against the estate and Deborah, alleging breach of an agreement between Leroy and the Hills' mother at the time Leroy divorced the Hills' mother in 1984 to make a will leaving the Hills a coffee company and a family ranch. The Hills and the attorneys entered into a retainer agreement, which required the Hills to pay the attorneys "40% of any recovery, in the event there is a recovery, with or without suit." According to the agreement, "recovery" included cash, real or personal property, stock in the Leroy Hill Coffee Company, and all or part ownership in the family ranch. After a trial, a judgment was entered for the Hills ordering specific performance of the contract, which required the conveyance of the coffee company and the ranch to the Hills. The Alabama Supreme Court affirmed the trial court's judgment, without an opinion. At issue before the Supreme Court involved the attorney fee. The Supreme Court found that the circuit court exceeded the scope of its discretion when it failed to order the payment of the attorney fee in accordance with the retainer agreement. The Hills petitioned for a writ of mandamus to direct the circuit court to vacate two order for lack of subject-matter jurisdiction. Specifically, they argued that the circuit court did not have jurisdiction to determine the 40% contingency fee owed the attorneys was an administrative expense of the estate and, consequently, that the circuit court did not have subject-matter jurisdiction when any subsequent order at issue in this case. The Supreme Court concluded the circuit court had jurisdiction over the administration of the estate, so the petition for a writ of mandamus (case no. 1150162) was denied; the orders pertaining to payment of the retainer were reversed (case no. 1150148) and the matter remanded for further proceedings. View "Hill v. Kruse" on Justia Law

Doctors replaced Dobbs’s hip with a DePuy ASR artificial hip, which was defective and caused Dobbs pain and other problems. Dobbs hired McLaughlin to represent him in the DePuy ASR Hip Implant Multidistrict Litigation for a 35 percent contingency fee. A year later, DePuy proposed a “Global Settlement,” offering represented parties $250,000 and unrepresented parties $165,000. McLaughlin advised Dobbs to accept the offer because going to trial would be expensive, time consuming, and risky. Dobbs stated that he wanted to register for the settlement but that he did not want to “waive any rights to a trial,” or “be forced to accept the present settlement offer.” Dobbs moved to remove McLaughlin. McLaughlin acknowledged that he no longer represented Dobbs and withdrew as counsel. Acting pro se, Dobbs accepted the settlement; because he was considered “represented,” Dobbs received $250,000. McLaughlin asserted a lien on the award and sought attorneys’ fees under a quantum meruit theory. The district court held that the full contingency fee was a reasonable award. The Seventh Circuit vacated. The court listed the factors relevant to quantum meruit under Illinois law, but did not consider evidence related to the factors. The only factor specifically addressed was that Dobbs “undoubtedly benefitted” from McLaughlin’s work. The court did not analyze: how many hours McLaughlin spent on Dobbs’s case; the difficulty of the underlying claim; the ordinary charge for such work; or McLaughlin’s skill and standing. View "Dobbs v. McLaughlin" on Justia Law

MOVA technology can capture an actor’s facial performance for use in motion picture special effects and video games; it is secured by trademarks, copyrights, and patents, and is reflected in hardware, source code, and physical assets. VGHL claims that Perlman, the head of Rearden, declined to acquire the MOVA assets from OL2 and proposed OL2 sell to a Rearden employee, LaSalle. Perlman introduced LaSalle to Rearden’s corporate attorney who helped LaSalle establish his own company, MO2, and negotiated with OL2. Perlman later demanded that LaSalle convey the MOVA assets to Rearden and terminated LaSalle’s employment when LaSalle refused. MO2 sold the MOVA assets to SHST, which hired LaSalle, and began selling the technology. The Rearden parties claimed that SHST never obtained ownership and that LaSalle was simply hired to handle the acquisition on Rearden’s behalf. SHST sued, alleging that Rearden had made “false or misleading representations ... concerning the ownership of the MOVA Assets ... to mislead the public and actual and prospective users and licensees” and had falsely recorded assignments of the MOVA patents. During discovery, SHST moved to compel Rearden to produce documents exchanged between MO2 and Rearden’s corporate attorney. The district court granted the request, concluding that Rearden had not shown entitlement to assert attorney-client privilege on behalf of MO2 and that LaSalle waived privilege when he shared documents. The Federal Circuit denied a petition for mandamus. Rearden's arguments failed to carry the high burden required on mandamus to overturn the court’s discovery determination. View "In re: Rearden, LLC" on Justia Law

This case involves a judgment in an interpleader action initiated by Southern California Gas Company against various defendants. After remand, the Gas Co., Andrea L. Murray, and Scott Tepper each filed a motion seeking payment from the interpleader funds on different grounds, and the trial court ultimately granted some portion of the funds sought by each party. Patrick J. Flannery and the Law Offices of Joseph Daneshrad appealed. The court concluded that the interpleader case satisfies the "separate, independent action" requirement for enforcement of an attorney fee lien. The court also concluded that the trial court's factual findings that Tepper withdrew involuntarily and for good cause did not violate due process. Accordingly, the court affirmed the judgment. View "Southern California Gas Co. v. Flannery" on Justia Law

Plaintiffs in this putative class action case, Stacey and Tyler Walker, appealed the trial court's order disqualifying their counsel, Hogue & Belong (the Firm), in this putative class action suit against their former employer, Apple, Inc. The trial court found automatic disqualification was required on the basis the Firm had a conflict of interest arising from its concurrent representation of the putative class in this case and the certified class in another wage-and-hour class action pending against Apple. Specifically, based on the parties' litigation strategies and evidence Apple submitted in support of its disqualification motion, the trial court concluded that to advance the interests of its clients in this case, the Firm would need to cross-examine a client in the Felczer class (the Walkers' store manager) in a manner adverse to that client. After review of plaintiffs' arguments on appeal, the Court of Appeals concluded that the trial court did not err in finding the Firm represented the store manager and that a disqualifying conflict existed between her interests and the Walkers' interests. View "Walker v. Apple, Inc." on Justia Law

In 2001, Millview County Water District began diverting substantial flows from the Russian River under a century-old water rights claim leased from Hill and Gomes. In 2009, Millview purchased the claim for $2.1 million, four months after the State Water Resources Control Board proposed a cease and desist order (CDO) to drastically restrict diversion under the claim. After the Board entered the CDO, Millview, Hill, and Gomes jointly prevailed in a mandate action challenging the CDO. After the court of appeal affirmed, they sought an award of attorney fees from the Board under Code of Civil Procedure section 1021.5, arguing they had conferred a substantial public benefit by obtaining a published appellate opinion addressing the issue of water rights forfeiture and that the action had constituted a “financial burden” to them because they stood to gain no money judgment. The trial court awarded plaintiffs attorney fees with respect to the appeal but declined to award fees incurred during the remainder of the legal proceedings. The court of appeal vacated the award and affirmed the trial court’s decision not to award additional fees, concluding plaintiffs failed to provide evidence that the cost of the litigation outweighed its potential financial benefits to them. View "Millview County Water District v. State Water Resources Control Board" on Justia Law

For some period of time before March 2015, the Agricultural Labor Relations Board had delegated plenary authority to seek injunctive relief under Labor Code section 1160.4 to general counsel. In March 2015, the board decided to change that delegation by requiring general counsel to obtain case-specific approval from the board for every request for injunctive relief. In May 2015, general counsel asked the board to approve a proceeding for injunctive relief against Gerawan Farming, Inc. (Gerawan). The board gave its conditional approval to that proceeding. When Gerawan asked the board to disclose the communications between the board and general counsel regarding the matter under the California Public Records Act, the board refused, claiming privilege. Gerawan brought a writ proceeding in Sacramento County Superior Court seeking to force the board to disclose the requested communications, and the court ordered disclosure. The board brought the present writ proceeding to the Court of Appeals to challenge the superior court’s ruling. After review, the Court of Appeals concluded the superior court erred in ordering disclosure of the communications between the board and general counsel relating to the decision to seek injunctive relief against Gerawan because those communications were indeed protected by the attorney-client privilege. "[E]ven if due process concerns with respect to the pending administrative proceeding against Gerawan are raised by the communications at issue, those concerns do not preclude the attorney-client privilege from attaching to those communications, and because the communications are privileged, they are exempt from disclosure under the Public Records Act." Accordingly, the Court directed that a writ of mandate issue ordering the superior court to vacate its order requiring disclosure of those communications and enter a new order denying Gerawan’s request for disclosure. View "Agricultural Labor etc. Bd. v. Super. Ct." on Justia Law

Hermitage challenges the district court's denial of its motion to disqualify counsel for Prevezon. The underlying litigation arises out of a 2013 civil forfeiture action brought by the United States alleging that Prevezon received the proceeds of a complex, sweeping scheme that defrauded the Russian treasury of roughly $230 million. The government alleges Prevezon laundered portions of the fraud proceeds in New York by buying various real estate holdings in Manhattan. Hermitage, an investment advisory firm, is a victim of the Russian Treasury Fraud. The court concluded that this case presents the “extraordinary circumstances” necessary to grant a writ of mandamus, as Hermitage is without other viable avenues for relief and the district court misapplied well‐settled law. The court explained that it is rare that a nonparty, nonwitness will face the risk of prosecution by a foreign government based on the potential disclosure of confidential information obtained during a prior representation. That real risk, however, coupled with the misapplication of the law by the district court, outweighs the delay and inconvenience to Prevezon of obtaining new counsel. The court found the remaining arguments raised by the parties to be without merit. Accordingly, the court granted the petition for a writ of mandamus and instructed the district court to enter an order disqualifying Moscow and BakerHostetler from representing Prevezon in this litigation. Prevezon’s motion for clarification is denied as moot. View "United States v. Prevezon Holdings, Ltd." on Justia Law

Defendants Eric Schrier, Frank Frederick, and Angela Martinez had been employed in various capacities by plaintiff SG Homecare, Inc. before abruptly leaving to start a competing firm, defendant Verio Healthcare, Inc. SG Homecare filed the underlying complaint, alleging the individual defendants breached their contractual and fiduciary duties, and misappropriated trade secrets. Schrier and his wife cross-complained against SG Homecare and its owner, Thomas Randall Rowley (together, the “SG parties”), alleging wrongful termination and intentional infliction of emotional distress. Defendant Verio Healthcare and the individual defendants were represented by Donald Wagner of the firm Buchalter Nemer, PLC. Shortly after the cross-complaint was filed, the SG Parties moved to disqualify Buchalter Nemer. The motion was based on an assertion that shortly before the individual defendants’ departure from SG Homecare, Buchalter Nemer executed a retainer agreement with SG Homecare and was either currently representing SG Homecare, or, alternatively, the present litigation was substantially related to Buchalter Nemer’s prior representation of SG Homecare (requiring disqualification in either event). Adding to mix: Wagner, as a member of the California State Assembly, relied on statutory entitlement to a continuance and extension of time of the entire litigation. The trial court denied the motion for a stay without explanation. Defendants petitioned the Court of Appeals court for a writ of mandate to order the trial court to grant the stay. The Appeals court summarily denied the petition, but the California Supreme Court granted review and remanded back to the Appeals court with instructions to issue an order to show cause. The Court of Appeals issued that order and denied the writ, namely because it found that the trial court acted within its discretion in its finding that the stay would "defeat or abridge the other party's" right to relief. View "Verio Healthcare v. Superior Court" on Justia Law