Justia Legal Ethics Opinion Summaries

In these consolidated cases, plaintiffs sought attorneys' fees, including fees for work performed by a special education expert employed by their attorney, after prevailing in actions brought under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400 et seq. The district court denied plaintiffs' motion and plaintiffs appealed. The court concluded that the district court did not abuse its discretion in concluding that the special education expert is a highly experienced special education consultant and expert. Because the expert is not a paralegal, her fees were nonrecoverable as part of reasonable attorneys' fees. Accordingly, the court affirmed the judgment. View "McAllister v. District of Columbia" on Justia Law

Plaintiffs in this case alleged their former bankruptcy trustee breached professional duties due them because of conflicting obligations the trustee owed the bankruptcy estate. Plaintiffs sought recovery under state law. However, plaintiffs filed suit in federal court against the trustee alleging diversity jurisdiction and the right to have the case resolved in an Article III court. The trustee maintained the case should have been heard in an Article I bankruptcy court because the alleged-breached professional duties arose from the bankruptcy proceedings. The district court concluded the case should have been heard in the Article I court, and certified its decision for immediate appeal. The Tenth Circuit concluded that an Article III court had jurisdiction, and reversed the district court's order. View "Loveridge v. Hall" on Justia Law

Plaintiff-appellant James McKenzie appealed a trial court’s order awarding him only $28,350 of the nearly $48,000 in attorney fees he sought in this case, following the parties’ settlement of McKenzie’s claim under the automobile “lemon law” provisions of the Song-Beverly Consumer Warranty Act. The trial court refused to award McKenzie any of the attorney fees incurred in the wake of Ford’s initial offer because it viewed the compromise offer ultimately accepted by McKenzie as essentially identical to the offer he had initially rejected – distinguished only by his “demand that [he] be allowed to file [a fee] motion.” The court concluded McKenzie unreasonably delayed settlement for the sole purpose of ginning up his fee award. The Court of Appeal reversed. The Court found the trial court’s comparative assessment of Ford’s two settlement offers was erroneous as a matter of law. "Even Ford concedes its initial settlement offer incorporated numerous extraneous provisions – including broad releases of both Ford and nonparties, an illegal confidentiality clause characterized as 'material' to the settlement, and what amounted to an opt-out provision in Ford’s favor – all of which were excised from the offer McKenzie later accepted. These differences are significant, and thus McKenzie’s rejection of the initial offer was reasonable, requiring his counsel to continue working on the case." The Court held further that the trial court’s erroneous comparison of Ford’s initial compromise offer with the offer McKenzie later accepted fatally undermined its conclusion that the entire amount of hours billed by McKenzie’s counsel in the wake of that initial offer was unjustified. The court’s additional finding, that McKenzie’s two attorneys also engaged in instances of duplicative billing after Ford’s initial offer, did not support a complete denial of fees for that period. Consequently, the case was remanded back to the trial court with directions to reconsider the fee award. View "McKenzie v. Ford Motor Co." on Justia Law

Plaintiff filed suit against the District, alleging a violation of the Individuals with Disabilities Education Act (IDEA), 20 U.S.C.1400 et seq. After plaintiff prevailed, the district court awarded her $62,225 in attorneys' fees and costs for approximately one hundred hours of work. On appeal, the District argued that the district court abused its discretion when it adopted plaintiff's proposed fee matrix. The court concluded that the district court abused its discretion in relieving plaintiff of her burden of demonstrating the reasonableness of the rates. In this case, plaintiff's proposed fee matrix set the prevailing market rate for her lawyer’s services well beyond the next highest hourly rate used by district courts in IDEA litigation. Accordingly, the court vacated the fee award and remanded. View "Eley v. District of Columbia" on Justia Law

SFA’s patents relate to a computer sales system that includes multiple subsystems or components; each component corresponds to a different phase of the sales process. The patents disclose “an event manager” that detects “events” and automatically implements operation. SFA sued online retailers, including Newegg, alleging infringement. After other accused infringers settled, the district court held Markman hearings and rejected Newegg’s proposed constructions that limited the asserted claims to systems that assist a salesperson, or are used by a salesperson. Newegg also argued that claims were invalid as indefinite, because the system claims contained method step limitations, making it unclear when infringement occurs. The parties jointly sought extension of the case schedule. The court denied the motion as premature and denied summary judgment that the claims were indefinite. The next day, SFA moved to dismiss with prejudice and covenanted not to sue Newegg on the patents at issue. The court found that Newegg was the prevailing party and granted costs, but denied its 35 U.S.C. 285 motion for attorneys’ fees citing the Supreme Court’s standard in Octane (2014), finding that, “[e]ven under the new, lower standard for an exceptional case designation, Newegg has provided no evidence that this case ‘stands out from others with respect to the substantive strength of [SFA’s] litigating position.’” The Federal Circuit affirmed. View "SFA Sys., LLC v. Newegg, Inc." on Justia Law

Defendant in this criminal case was represented by an attorney who also represented Defendant’s codefendant. At issue on appeal was whether Defendant’s “waiver of the right to conflict-free trial counsel was invalid.” The district court of appeal reversed Defendant’s conviction, concluding that the trial court failed to conduct a sufficient inquiry when Defendant consented to his attorney representing both him and his codefendant and that the error was not harmless. The State appealed, arguing that a waiver of the right to conflict-free counsel is only required when there is an actual conflict of interest and that an attorney’s representation of two or more codefendants does not necessarily create an actual conflict of interest. The Supreme Court quashed the decision of the district court of appeal and remanded the case with directions that Defendant’s conviction be affirmed, holding (1) some adverse or detrimental effect on the representation is required in order to establish an actual conflict of interest; and (2) because there was no finding of an actual conflict of interest in this case, there was no need for a waiver. View "State v. Alexis" on Justia Law

"This is a case of egregious attorney misconduct." Because of the cumulative effect of the attorney's misconduct, the Court of Appeal felt compelled to reverse the judgment she obtained on behalf of her client, Caltrans. "While Judge Di Cesare showed the patience of Job – usually a virtue in a judge – that patience here had the effect of favoring one side over the other. He allowed [the attorney] to emphasize irrelevant and inflammatory points concerning the plaintiff's character so often that he effectively gave CalTrans an unfair advantage." View "Martinez v. Dept. of Transportation" on Justia Law

Bell established mutual funds, raised $2.5 billion, and invested in vehicles managed by Petters, who said that he was financing Costco’s electronics inventory. Instead he was running a Ponzi scheme, which collapsed in 2008. The scheme involved a claim that money lent to Petters entities was secured by Costco’s inventory and that repayment was ensured by a “lockbox” arrangement under which Costco would make payments into accounts that the Funds (not Petters) controlled. Petters insisted that the Funds not contact Costco, to avoid upsetting his favorable business relations. Bell and Petters went to prison for fraud. The Funds’ trustee in bankruptcy filed multiple suits. The district court dismissed a claim of legal malpractice. The Seventh Circuit reversed. Even if Bell was determined to do business with Petters, the Fund’s lawyers ould have explained how to structure the transactions in a less risky way, and if Petters refused to cooperate then Bell might have reconsidered lending the Funds’ money. The Trustee alleges that the firm did not offer any advice about how relative risks correspond to different legal devices, and its complaint states a legally recognized claim. Whether the law firm has a defense, and whether any neglect on its part caused injury, are subjects for the district court. View "Peterson v. Katten Muchin Rosenman LLP" on Justia Law

Choice Hotels sued SBQI, its managers, and investors, for breach of a franchise agreement. The defendants did not answer the complaint. The court entered a default. One defendant, Chawla, an Illinois attorney, had represented the others. Other defendants asked Chawla to find a new attorney. They claimed that they had been unaware that their signatures were on the franchise agreement and that the signatures are forgeries. Johnson agreed to try to vacate the default, negotiate a settlement, and defend against the demand for damages. Johnson filed an appearance and took some steps, but did not answer the complaint or move to vacate the default, engage in discovery concerning damages, or reply to a summary judgment motion on damages. In emails, Johnson insisted that he was trying to settle the litigation. He did not return phone calls. The court set damages at $430,286.75 and entered final judgment. A new attorney moved to set aside the judgment more than a year after its entry, under Fed. R. Civ. P. 60(b)(6), which covers “any other reason that justifies relief” and requires “extraordinary circumstances.” The Seventh Circuit affirmed. The defendants must bear the consequences of their inaction. They were able to monitor the proceedings, but did not follow through. View "Choice Hotels Int'l Inc. v. Grover" on Justia Law

Moje, playing minor league hockey, lost an eye during a game, and sued Oakley, which made his visor, and the League. Instead of notifying its insurer, the League hired LoFaro. Oakley’s attorney called the League’s President, to ask why it had not answered the complaint. LoFaro claimed that an answer had been filed, but the docket did not reflect any filing. Moje moved for default. LoFaro did not respond, nor did he respond after the court entered the default and permitted Moje to prove damages. The court entered a final judgment of $800,000 against the League. After the League learned of collection efforts, it notified its insurer. A lawyer hired by the insurer unsuccessfully moved, under Fed. R. Civ. P. 60(b)(1) to set aside the judgment within six months of its entry. Rule 60(b)(1), allows relief on account of “mistake, inadvertence, surprise, or excusable neglect.” The Seventh Circuit affirmed. Abandoned clients who take reasonable steps to protect themselves can expect to have judgments reopened under Rule 60(b)(1), but the League is not in that category. Its remedy is against LoFaro. View "Moje v. Federal Hockey League LLC" on Justia Law