Justia Legal Ethics Opinion Summaries

Plaintiff, a former shareholder of XTO, moved for an award of attorneys' fees and expenses following the stipulated dismissal of her derivative action, which was largely mooted by measures taken by XTO's Board shortly after plaintiff's complaint was served. In addition to XTO, the former members of XTO's Board were named as defendants. Plaintiff objected to the fact that the cash bonuses paid to XTO's CEO and four other officers were not tax-deductible because they did not meet the requirements of section 162(m) of the Internal Revenue Code. The court denied the motion because an arguably poor business judgment, without more, did not excuse demand on the Board in a derivative action. View "Freedman v. Adams, et al." on Justia Law

Plaintiffs filed a complaint and moved for a temporary restraining order and preliminary injunction, alleging section 16, article V, of the Iowa Constitution, as implemented by Iowa Code sections 46.2, 46.4-46.10, and 46.14, violated their Fourteenth Amendment right to equal protection under the laws. The court concluded that the State Judicial Nominating Commission was a "special limited purpose" entity for its sole function was to select the most qualified candidates for judicial appointments and forward the names of these candidates to the Governor for a final appointment. This narrow function had a disproportionate effect on a definable group of constituents - members of the Iowa Bar - over other voters in the state. Therefore, the election of the attorney members of the Commission was an election of special interest. Applying rational basis review, the court agreed that the district court's Iowa system of election for the Commission's attorney members by and from members of the Iowa Bar was rationally related to Iowa's legitimate interests. Therefore, Iowa's system did not violate plaintiffs' rights under the Equal Protection Clause. Accordingly, the court affirmed the judgment. View "Carlson, et al. v. Justice David Wiggins, et al." on Justia Law

This case involved a dispute over fees awarded to an ad litem appointed in connection with the proposed division of a personal injury settlement between an incapacitated plaintiff and his guardian. The court-appointed attorney requested fees on an unsworn invoice that specified numerous tasks performed, but did not specify when they were performed, who performed them, or the amount of time spent. The court held that the evidence was legally insufficient to support the full amount awarded to the guardian ad litem (GAL) as compensation, although it was sufficient to show that he necessarily spent some amount of time fulfilling his role as GAL. The court reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "Ford Motor Co. v. Garcia" on Justia Law

Arnold & Itkin, a Texas-based law firm, appealed from a judgment of the district court sanctioning it for its conduct in opposing the arbitration of a dispute between its clients. Arnold & Itkin challenged the determination that the conduct was sanctioned and the amount and form of the sanctions imposed. The court largely affirmed the judgment of the district court, except that the court remanded in part to permit the district court to consider whether it should impose certain limits on its requirements that Arnold & Itkin's attorneys attached the sanction order to all future applications for admission pro hac vice in the Southern District of New York. View "Prospect Capital Corp. v. Enmon" on Justia Law

This appeal arose from the dismissal of all claims alleged in a putative class action complaint filed pursuant to the Driver's Privacy Protection Act of 1994 (DPPA), 18 U.S.C. 2721-2725. Appellees (Lawyers) were South Carolina attorneys who in 2006 and 2007 instituted several "group action" lawsuits in South Carolina state court against numerous car dealerships under the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (Dealers Act), S.C. Code Ann. 56-15-10 et seq. Appellants (Buyers) were car buyers who received mailings from Lawyers regarding the Dealers Act litigation. Buyers sued Lawyers in this action alleging that Lawyers violated the DPPA when they obtained and used Buyers' personal information without their consent in connection with the Dealers Act litigation. The court held that the district court erred in its determination that the conduct of Lawyers did not constitute solicitation within the contemplation of the applicable DPPA prohibition. Nevertheless, the district court correctly ruled that Lawyers' conduct in respect to Buyers' personal information was undertaken in anticipation and in connection with litigation, a use permitted by the DPPA. View "Maracich v. Spear" on Justia Law

Defendant was convicted of corruptly endeavoring to obstruct the due administration of justice and one count of knowingly making a materially false statement to a governmental agency. Defendant's convictions stemmed from him falsely representing that he was a licensed attorney. The court held that the evidence adduced at trial supported the jury's verdict; the district court did not abuse its discretion in refusing to instruct the jury in accordance with defendant's definition of "corruptly"; and assuming the district court erred in applying one or more of the enhancements to defendant's offense level, thereby incorrectly calculating the advisory guidelines range, the Government, as proponent of the sentence, had discharged its burden to show that defendant's substantial rights were not affected by any error because the district court made detailed, alternative findings that it would have sentenced defendant to 65 months of imprisonment, notwithstanding whether any or some of the enhancements were applied to his offense level. View "United States v. Richardson, Jr." on Justia Law

This was an adversary proceeding arising out of a Chapter 11 bankruptcy of debtors. The trustee filed suit against A&R, the former debtors' counsel, seeking disgorgement of the attorney's fees awarded during the bankruptcy. The bankruptcy court ordered a sanction for A&R's failure to adequately disclose various connections it had to the debtors and creditors, but found that A&R did not have a disqualifying adverse interest. The trustee appealed, arguing that A&R was not disinterested and that all legal fees should have been disgorged. The court held that, under the totality of the circumstances, A&R did not have a disqualifying interest; given the bankruptcy court's factual findings were reasonable based on the record, the court concluded that the bankruptcy court did not commit clear error in ordering disgorgement of only a portion of the retainer; and the bankruptcy's court's decision to deny the amendment was not an abuse of discretion. Accordingly, the court affirmed the judgment. View "Waldron v. Adams & Reese, L.L.P." on Justia Law

Companion was authorized to license space in Wal-Mart stores to companies that sell durable medical equipment and entered into licensing agreements with defendants. In 2007, defendants shut down operations. Companion sued. Problems arose during discovery, including defense counsel motions to withdraw, allegations of inadequate responses to discovery requests, objections to the scope of discovery, refusal to attend depositions, motions to compel, multiple extensions, and claims of obstruction. After three years, the district judge imposed a default as to all counts, based on discovery violations by the defendants. The court eventually lifted the default except as to Companion's veil piercing claim, allowing the substantive claims to go to trial. A jury found for Companion and awarded more than $1 million in damages. Defendants, personally liable as a result of the default, appealed. The First Circuit vacated the default and remanded, "because the district court imposed such a severe sanction based on a very limited slice of the relevant facts." View "Companion Health Servs, v. Majors Mobility, Inc." on Justia Law

Plaintiff, a police department employee, made claims of sexual harassment and emotional abuse. The district court issued a scheduling order, closing discovery as of November 18, 2010. When defense counsel encountered an emergency, the court reset the date to January 28, 2011. In November, defendants served plaintiffs with interrogatories and requests for production of documents. The court extended discovery closure date to February 28, 2011. On February 24, plaintiffs moved to extend this deadline by 30 days, claiming that their lawyer had no time to devote to their case. The court extended the discovery closure date to March 25, but stated that plaintiffs must provide answers to outstanding interrogatories and requests for production of documents no later than February 28 and that failure to answer by that date would result in dismissal, with prejudice. On March 1, defendants informed the court that plaintiffs had not complied. The court extended the deadline by 10 days. On March 16, defendants informed the court that the interrogatories remained unanswered and that the documents had not been produced. The next day the court dismissed the action with prejudice. The First Circuit affirmed. View "Mulero-Abreu v. PR Police Dep't" on Justia Law

An employee crashed a Verizon truck and admitted to snorting heroin earlier that day. When his supervisor visited his home to have paperwork completed, the encounter became hostile. Verizon fired him. He filed a Massachusetts workers' compensation claim, based on injuries from the accident and alleged psychological harm based on-the-job harassment by the supervisor before the accident and the supervisor's visit to the house. An ALJ rejected the claims and the review board affirmed. A state court affirmed. Employee filed a second workers' compensation claim pertaining solely to the incident at the house. The claim was rejected by the ALJ as res judicata; the board and court affirmed, with an award of double costs against the employee for frivolous appeal. Employee then filed suit against Verizon and the supervisor, charging intentional infliction of emotional distress, negligent infliction of emotional distress, and trespass. The court dismissed, based on preemption provisions of the Labor Management Relations Act, 29 U.S.C. 185(a), and the exclusivity provision of the Compensation Act, Mass. Gen. L. ch. 152, 24. The court ordered plaintiff's attorney to pay $34,908.12 to reflect only defendants’ attorney fees incurred after the court's warning about the lawsuit's viability. The First Circuit affirmed. View "McCarty v. Verizon New England Inc." on Justia Law