Justia Legal Ethics Opinion Summaries

Wise Regional, a Texas municipal hospital authority, filed suit against Aetna, an insurance plan administrator, in state court over a dispute regarding medical insurance claims Wise Regional submitted on behalf of its patients. Aetna removed to federal court under 28 U.S.C. 1442, but the district court remanded to state court, awarding attorneys' fees. The court concluded that it had appellate jurisdiction over the remand order because Aetna relied upon the federal officer removal statute in its notice of removal; remand was proper because Aetna's notice of removal was untimely; and the district court did not abuse its discretion in awarding attorneys' fees where Aetna lacked an objectively reasonable basis for seeking removal of this action almost five months after expiration of the thirty-day deadline for removal. Accordingly, the court affirmed the judgment. View "Decatur Hospital Authority v. Aetna Health, Inc." on Justia Law

The court filed an order denying Appellant Blixseth's counsel's motion and amended motion for reconsideration of the Commissioner's orders awarding attorneys' fees and non-taxable costs; denying requests for recusal, appointment of a new panel, conversion of the matter to a criminal proceeding, transfer of the matter to the U.S. Attorney, and holding of the awards in abeyance; and denying counsel's suggestion for reconsideration. The court concluded that the Commissioner correctly declined to award attorneys' fees and non-taxable costs under Federal Rule of Appellate Procedure 38 against Blixseth and his attorney Michael J.Flynn for preparing appellees' statements regarding Blixseth's pro se response and Flynn's response to the court's order to show cause against Blixseth and Flynn ("fees-on-fees"), and correctly awarded fees and costs under 28 U.S.C. 1927 against Flynn for preparing the statements regarding Flynn's response. The court also concluded that Rule 38 is a damage provision authorizing award of "just damages;" the award of fees and costs under Rule 38 thus must be limited to appellees' direct fees and costs for defending against the frivolous appeal, and may not include the fees and costs incurred regarding the imposition of sanctions; and section 1927 is a fee-shifting provision allowing an award of fees-on-fees. View "Blixseth v. Yellowstone Mountain Club" on Justia Law

The Haegers sued Goodyear, alleging that the failure of a Goodyear G159 tire caused their motorhome to swerve and flip over. After years of contentious discovery, marked by Goodyear’s slow response to repeated requests for internal G159 test results, the parties settled. Months later, the Haegers’ lawyer learned that, in another lawsuit involving the G159, Goodyear had disclosed test results indicating that the tire got unusually hot at highway speeds. Goodyear conceded withholding the information. The district court exercised its inherent power to sanction bad-faith behavior to award the Haegers $2.7 million—their legal fees and costs since the moment, early in the litigation, of Goodyear’s first dishonest discovery response. The court held that in cases of egregious behavior, a court can award all attorney’s fees incurred in a case, without any need to find a causal link between the expenses and the sanctionable conduct. The court made a contingent award of $2 million, to take effect if the Ninth Circuit reversed the larger award, deducting fees related to other defendants and to proving medical damages. The Ninth Circuit affirmed the $2.7 million award. The Supreme Court reversed. When a federal court exercises its inherent authority to sanction bad-faith conduct by ordering a litigant to pay the other side’s legal fees, the award is limited to fees that the innocent party would not have incurred but for the bad faith. The sanction must be compensatory, not punitive. The Haegers did not show that this litigation would have settled as soon as Goodyear divulged the heat-test results and cannot demonstrate that Goodyear’s non-disclosure so permeated the suit as to make that misconduct a but-for cause of every subsequent legal expense. View "Goodyear Tire & Rubber Co. v. Haeger" on Justia Law

Wilfred I. Aka appealed the Tax Court's decision to disbar him and, alternatively, its failure to include in its disbarment order instructions for his reinstatement. The court held that it has jurisdiction to review Tax Court disbarment orders and that the court will review the Tax Court's factual findings for clear error. Nonetheless, the court considered de novo Aka's argument. On the merits, the court concluded that Aka offered no legal authority for his contention that the Tax Court violated his due-process rights, and neither procedural nor substantive due process provided a basis for reversing the Tax Court's order. Accordingly, the court affirmed the disbarment order and declined to order the Tax Court to propose additional steps for reinstatement. View "Aka v. United States Tax Court" on Justia Law

This case arose from a dispute over which California government entity would be responsible for funding the education of K.G. pursuant to the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400(d)(1)(A). The School District contended that the district court erred in granting K.G. relief from its original judgment denying attorneys' fees. The court concluded that the district court did not apply the incorrect legal rule in evaluating whether to grant relief pursuant to Rule 60(b)(1) where the district court's determination that K.G.'s delay in pursuing Rule 60(b) relief was understandable in light of the original attorney's poor mental and physical health; K.G. was the prevailing party entitled to attorney fees because K.G.'s prayer was answered in full when the ALJ designated the School District as the responsible agency and granted K.G.'s requested relief; K.G. qualified as a prevailing party under the IDEA, and this victory was not trivial or merely technical; but it was not clear from the district court's award that it took into account forgoing considerations in reducing the fees originally requested. Accordingly, the court affirmed in part, vacated in part, and remanded. View "Irvine Unified School District v. K.G." on Justia Law

Client entered into a written representation agreement with Attorney for legal services. An attorney-in-fact for Client later filed a confession of judgment against Client in the amount of $9,460.07, with interest at eighteen percent from a certain date. Attorney subsequently filed a garnishment suggestion against Client in an effort to enforce the judgment. Client moved the court to enter an order declaring the confessed judgment void nunc pro tunc because of failure to serve it on her as required by Va. Code 8.01-438. Attorney moved to suffer a voluntary nonsuit. The court (1) granted the nonsuit, (2) quashed the confessed judgment nunc pro tunc, (3) ordered payment to Client of all sums held by the clerk by reason of the garnishment, and (4) awarded sanctions to be paid by Attorney to Client as reasonable expenses she incurred by reason of the garnishment proceedings. Attorney appealed the order granting sanctions. The Supreme Court affirmed, holding that Attorney breached his duty imposed upon him by section 8.01-438, and that breach resulted in harm to Client, justifying sanctions. View "Westlake Legal Group v. Flynn" on Justia Law

Rachelle and Charles Black were married for nearly 20 years and had three sons. They raised their children in a conservative Christian church and sent them to private, Christian schools. In 2011, Rachelle told Charles that she was lesbian, and the parties divorces shortly thereafter. In the order of dissolution, the trial court designated Charles as the primary residential parent. The final parenting plan also awarded Charles sole decision-making authority regarding the children's education and religious upbringing. The record showed that the trial court considered Rachelle's sexual orientation as a factor when it fashioned the final parenting plan. Furthermore, the Supreme Court found improper bias influenced the proceedings. “This bias casts doubt on the trial court's entire ruling, and we are not confident the trial court ensured a fair proceeding by maintaining a neutral attitude regarding Rachelle's sexual orientation. Accordingly, we reverse.” View "In re Marriage of Black" on Justia Law

Karla Bailey, former court administrator to Hinds County Circuit Court Judge Jeffrey A. Weill Sr., filed a complaint against Judge Weill in his individual capacity, alleging that he had committed libel against her. Bailey’s complaint was based on language in a footnote contained in four orders entered by Judge Weill in separate criminal cases that were before him. The alleged libel in the orders provided that Bailey had been reprimanded by Judge Weill for engaging in improper ex parte communications while she was his court administrator and she had added a certain public defender as counsel of record in her current position as deputy clerk. Judge Weill filed a motion to dismiss Bailey’s complaint and amended complaint, raising several grounds for dismissal, including judicial immunity. The trial court denied the motion and ordered the parties to commence discovery. Judge Weill filed a petition for interlocutory appeal. After review, the Supreme Court held the trial court erred by failing to correctly apply the doctrine of judicial immunity to Bailey’s claim that Judge Weill libeled her via the underlying orders. Accordingly, the trial court’s order was reversed and the matter remanded for further proceedings. View "Weill v. Bailey" on Justia Law

While Kwasny was managing partner at a now-dissolved law firm, the firm established a 401(k) profit-sharing plan for its employees. Kwasny was named as a trustee and fiduciary of the plan. Between September 2007 and November 2009, the plan sustained losses of $40,416.302 because plan contributions withdrawn from employees’ paychecks were commingled with the firm’s assets and were not deposited into the plan. In 2011, the Secretary of Labor received a substantiated complaint from a plan member; investigated; and filed suit to recover the lost funds, remove Kwasny as trustee and fiduciary of the plan, and enjoin Kwasny from acting as a plan fiduciary in the future. The Third Circuit affirmed summary judgment in favor of the Secretary, remanding for determination of whether the judgment should be offset by a previous Pennsylvania state court default judgment entered against Kwasny for the same misdirected employee contributions. The court rejected arguments based on res judicata and on the statute of limitations. There is no genuine issue of disputed fact regarding Kwasny’s violation of the Employee Retirement and Income Security Act. View "Secretary United States Department of Labor v. Kwasny" on Justia Law

In 1983, the New Jersey Supreme Court affirmed a final consent judgment for a settlement agreement between the New Jersey State Bar Association and the New Jersey Association of Realtor Boards. The terms of the settlement provided that real estate brokers and salespersons may prepare contracts to sell or lease real property, so long as a standard form is used that includes a three-day period for attorney review. Plaintiffs Michael Conley, Jr., and Katie M. Maurer (Buyers) made an offer to purchase a condominium from defendant Mona Guerrero (Seller), and, a few days later, Seller signed and executed the contract. Before the three-day attorney-review period expired, Seller s attorney sent Buyers attorney and their realtor notice of disapproval by e-mail and fax, rather than by the methods approved under the 1983 holding and prescribed in the parties' contract (certified mail, telegram, or personal service). Buyers sued for specific performance, claiming the contract was enforceable because Seller s notification of disapproval was sent improperly. At issue before the Supreme Court was whether the attorney-review provision of a standard form real estate contract had to be strictly enforced, thereby nullifying Seller's notice of disapproval and requiring enforcement of the real estate contract. The Court concluded that, because Buyers received actual notice of disapproval within the three-day attorney-review period by a method of communication commonly used in the industry, the notice of disapproval was valid. The Court also exercised its constitutional authority over the practice of law and found that an attorney's notice of disapproval of a real estate contract could be transmitted by fax, e-mail, personal delivery, or overnight mail with proof of delivery. Notice by overnight mail will be effective upon mailing. The attorney-review period within which this notice must be sent remained three business days. View "Conley v. Guerrero" on Justia Law