Justia Legal Ethics Opinion Summaries

VLM, a Montreal-based supplier, sold frozen potatoes to IT in Illinois. After nine successful transactions, IT encountered financial difficulty and failed to pay for the next nine shipments. Invoices sent after delivery included a provision purporting to make IT liable for collection-related attorney’s fees if it breached the contracts. VLM sued; the deadline for an answer passed. The court entered a default. On defendants' motion, the court vacated the default as to IT’s president only. All three defendants then filed answers, contesting liability for attorney’s fees. The judge applied the Illinois Uniform Commercial Code and found that the fee provision had been incorporated into the contract. The Seventh Circuit reversed, holding that the U.N. Convention on Contracts for the International Sale of Goods applied. On remand, the judge applied the Convention and held that the fee provision was not part of the contracts and that IT could benefit from this ruling, despite the prior entry of default. The Seventh Circuit affirmed. IT never expressly assented to the attorney’s fees provision in VLM’s trailing invoices, so under the Convention that term did not become a part of the contracts. VLM waived its right to rely on the default by failing to raise the issue until its reply brief on remand. View "VLM Food Trading Int'l, Inc. v. Ill. Trading Co." on Justia Law

FirstMerit Bank sued CFE Group in federal court to enforce a promissory note and guaranties. The district court dismissed without prejudice, with leave to amend. Rather than amend, FirstMerit filed a notice of voluntary dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). FirstMerit then filed a new complaint in an Illinois state court asserting the same claims. CFE moved to dismiss the new suit, arguing that the earlier federal dismissal meant that FirstMerit’s claims were barred by claim preclusion (res judicata). The state trial court denied the motion. CFE filed a new federal action, seeking to enjoin the state court under the relitigation exception to the federal Anti‐Injunction Act, 28 U.S.C. 2283. The district court refused, ruling that the dismissal of the first federal case was not a judgment on the merits and, therefore, did not preclude the state action. The Seventh Circuit affirmed, noting that CFE’s request for an injunction was also barred by the Full Faith and Credit Act, 28 U.S.C. 1738, and finding the appeal frivolous, so that sanctions on CFE are appropriate. View "CFE Group, LLC v. FirstMerit Bank, N.A." on Justia Law

In 2013, M’Guinness sued fellow shareholder, Johnson, for claims arising out of the operation of a small construction firm, TLC. M’Guinness also sought involuntary dissolution and appointment of a receiver. Johnson cross-complained against M’Guinness, TLC, and the third TLC shareholder. Johnson was represented by the Casas law firm. The other parties moved to disqualify the firm, claiming it had been retained by TLC as its counsel in 2006, TLC never discharged the firm; the firm never withdrew as counsel. The court denied the motion, finding the evidence insufficient to warrant automatic disqualification based upon a concurrent representation conflict and rejecting a claim of subsequent representation conflict of interest. The court of appeal reversed. The firm continued to represent TLC through the time the lawsuit was instituted. If a party moving to disqualify an attorney establishes concurrent representation, the court is required, “in all but a few instances,” to automatically disqualify the attorney without regard to whether the subject matter of the representation of one client relates to the representation of the second client. While disqualification is a drastic measure and motions to disqualify are sometimes brought for improper tactical reasons, disqualification is not “generally disfavored,” and, in this situation, was required. View "M'Guinness v. Johnson" on Justia Law

Goldstone and Lanz are Santa Rosa attorneys. Lanz represented Garcia-Bolio in a “Marvin” action and had a contingency fee agreement. The suit settled on the third day of trial. There was a dispute as to the value of the settlement and Lanz’s fee. Lanz sued Bolio, who failed to respond, and her default was taken. Goldstone became Bolio’s lawyer and, following relief from default, filed an answer and a cross-complaint, alleging breach of fiduciary duty, professional negligence, and several ethical violations by Lanz, including that he acted with “moral turpitude.” Lanz defeated Bolio’s cross-claims, leaving only Lanz’s claim against Bolio. Lanz obtained a complete victory at trial, in a decision highly critical of Bolio’s conduct. Lanz then sued Goldstone for malicious prosecution. Goldstone filed an anti-SLAPP (strategic lawsuit against public participation) motion to dismiss. The court of appeal affirmed denial, concluding that Lanz met his burden under prong two of the anti-SLAPP analysis, demonstrating a probability of success on all three elements of malicious prosecution. View "Lanz v. Goldstone" on Justia Law

Lawyer Spicer represented plaintiff Egan in a case that alleged sex discrimination and the creation of a hostile work environment. The complaint included allegations that Egan, at her deposition, emphatically denied. Spicer conceded that the allegations in the paragraph were false and claimed “proofreading error.” The case was ultimately dismissed for lack of personal jurisdiction. The district judge imposed a $5,000 sanction on Spicer for “bad faith” misconduct/ The Seventh Circuit affirmed, calling Spicer’s excuses “pathetic” and noting that it took six months for Spicer to correct the complaint. View "Egan v. Pineda" on Justia Law

Six years after a San Jose police officer testified falsely against plaintiff during a preliminary hearing, the city agreed to pay plaintiff $150,000 and not to oppose any motion plaintiff might bring for a declaration of factual innocence of the criminal charges brought against him. The parties agreed that plaintiff’s counsel could seek an award of costs incurred and reasonable attorney’s fees under the Civil Rights Attorney’s Fees Award Act, 42 U.S.C. 1988. Plaintiff sought $1,448,397 in attorney fees and $75,255 in costs, based on “2,419.9 compensable attorney hours … utilizing reasonable hourly billing rates roughly 20% below established market rates[,] i.e[.,] ranging from $425 to $650 per hour,” plus $102,998.75, added for “fees-on-fees work.” Plaintiff also requested a 1.5 multiplier to the lodestar amount “to account for the significant risk counsel has taken in litigating this hotly[ ]contested matter on a wholly contingent basis, with little prospect of settlement until the eve of trial.” The court awarded compensation of $436,807.50, declined to apply the 1.5 multiplier, and awarded costs of $23,935.07. The court of appeals remanded, finding the lower court’s reasoning inadequate. View "Kerkeles v. City of San Jose" on Justia Law

The District and the Police Department appealed from the district court's grant of preliminary injunction restraining enforcement of a “good reason” standard in the D.C. Code provision governing the issuance of licenses for the carrying of concealed weapons, D.C. Law 20-279, 3(b). The court noted that the controlling fact in this case is the identity of the judge who decided it in the district court – The Honorable Senior United States District Judge Frederick J. Scullin, Jr., of the Northern District of New York. Although Judge Scullin served under a properly issued designation, that designation was limited to specific and enumerated cases. The court concluded that the present litigation is not one of those cases. The court concluded that, like the designated judge in Frad v. Kelly, Judge Scullin had a limited designation that did not extend beyond the specifications of that designation. Accordingly, the court vacated the order based on jurisdictional grounds. View "Wrenn v. District of Columbia" on Justia Law

The issue presented in this case was one of first impression: to what extent do the confidentiality provisions of Oregon’s mediation statutes (ORS 36.100 to 36.238) prevent a client from offering evidence of communications made by his attorney and others in a subsequent malpractice action against that attorney? Plaintiff retained defendant, an attorney specializing in employment law, to pursue discrimination and retaliation claims against plaintiff’s former employer. In the course of that representation, defendant filed administrative complaints with the Oregon Bureau of Labor and Industries and thereafter a civil action against the former employer for damages on plaintiff’s behalf. After limited discovery, plaintiff, represented by defendant, and plaintiff’s former employer entered into mediation under the terms and conditions set forth in the mediation statutes. Before meeting with the mediator and plaintiff’s former employer, defendant advised plaintiff about the potential value of his claims and the amount for which he might settle the lawsuit. Plaintiff and his former employer, along with their respective lawyers and the mediator, attended a joint mediation session and attempted to resolve the dispute. However, no resolution was reached. After the session ended, the mediator proposed a settlement package to the parties. In the weeks that followed, defendant provided advice to plaintiff about the proposed settlement. At defendant’s urging, plaintiff accepted the proposed terms and signed a settlement agreement with his former employer. One of the terms to which plaintiff agreed was that the settlement agreement would be confidential. After the parties signed the agreement, defendant continued to counsel plaintiff and provide legal advice regarding the settlement. Some months after the mediation ended, plaintiff concluded that defendant’s legal representation had been deficient and negatively affected the outcome of his case. The trial court granted defendant’s motion to strike certain allegations in plaintiff’s complaint and then dismissed the complaint with prejudice under ORCP 21 A(8) for failure to state a claim. The Court of Appeals affirmed in part and reversed in part, holding that ORS 36.220 and 36.222 barred some, but not all, of plaintiff’s allegations, and that the trial court erred in dismissing the complaint with prejudice before a responsive pleading had been filed. The Supreme Court agreed that ORS 36.220 and 36.222 limited the subsequent disclosure of mediation settlement terms and certain communications that occur in the course of or in connection with mediation. The Court disagreed, however, as to the scope of communications that are confidential under those statutes. Furthermore, the Court disagreed with the Court of Appeals as to whether the trial court erred in dismissing plaintiff’s complaint with prejudice because no responsive pleading had been filed. The Court therefore affirmed in part, reversed in part and remanded for further proceedings. View "Alfieri v. Solomon" on Justia Law

Plaintiff appealed a judgment after the trial court's grant of defendants' motion for terminating sanctions. Chase moved for terminating sanctions based on its unsuccessful attempts to depose plaintiff's brother and plaintiff's threats of physical violence. The court held that courts have the inherent authority to dismiss a case as a sanction and the authority should be exercised only in extreme situations, such as where the conduct was clear and deliberate and no lesser sanction would remedy the situation. The court concluded that, based on plaintiff's conduct, this case required a terminating sanction. The court cited plaintiff's failure to pay sanctions, harassing behavior, highly contemptuous statements made to the court, brandishing pepper spray and use of a stun gun. The court rejected plaintiff's arguments and affirmed the judgment. View "Crawford v. JPMorgan Chase Bank, N.A." on Justia Law

Petitioners, a bipartisan group of citizens, requested that a three-judge court be convened to consider their claim that Maryland’s 2011 congressional redistricting plan burdens their First Amendment right of political association. The district court dismissed the action, concluding that no relief could be granted. The Fourth Circuit affirmed. The Court held that 28 U.S.C. 2284 entitles petitioners to make their case before a three-judge court because, under section 2284(a), the present suit is indisputably an action challenging the constitutionality of the apportionment of congressional districts. The Court further held that the subsequent provision of section 2284(b)(1), that the district judge shall commence the process for appointment of a three-judge panel “unless he determines that three judges are not required,” should be read not as a grant of discretion to the district judge to ignore section 2284(a), but as a compatible administrative detail. The Court went on to say that this conclusion is bolstered by section 2284(b)(3)’s explicit command that “[a] single judge shall not . . . enter judgment on the merits.” Finally, the Court held that respondents' alternative argument, that the District Judge should have dismissed petitioners' claim as "constitutionally insubstantial" under Goosby v. Osser, is unpersuasive. Accordingly, the Court reversed and remanded. View "Shapiro v. McManus" on Justia Law