Justia Legal Ethics Opinion Summaries

In 2008, West Bend filed a legal malpractice action based on the performance of attorney Schumacher and his firm, RLGZ, in a 2005-2006 workers’ compensation matter. The parties agreed to a dismissal of that claim and entered into a tolling agreement pending the resolution of related actions. After the resolution of those claims, West Bend filed a malpractice suit against Schumacher in 2013. The district court dismissed the first and an amended complaint, concluding that the allegations were too speculative or vague. The court stated that allegations about failure to depose a doctor, failure to contact witnesses prior to the hearing, the disclosure of certain facts to opposing counsel, and that Schumacher had represented that West Bend would accept liability, did not explain “how any of these alleged acts and omissions harmed its defense.” The Seventh Circuit affirmed. The complaint did not adequately plead a claim for legal malpractice under Illinois law; it fails to allege plausibly that the outcome of the underlying action would have been more favorable to West Bend, had it not been for Schumacher’s alleged litigation conduct View "West Bend Mutual Insurance Co v. Schumacher" on Justia Law

The City of Chicago obtained a default administrative judgment of $3,540 against Plaintiff (Manistee Apartments), based upon a finding of code violations. The city registered the judgment and imposed a lien against plaintiff’s real estate. Plaintiff contends that it first received actual notice of the lien during routine title insurance review while it was preparing to sell its properties. In response to plaintiff’s effort to settle the matter, the city demanded $5,655.16, reflecting $720.34 in statutory interest plus $1,394.82 in collection costs and attorneys’ fees. Plaintiff conveyed its property, paid $5,655.16 under protest, and filed a federal class action, alleging due process violations. The court dismissed, stating that the plaintiff failed to allege facts that plausibly supported the assertion that it paid the demand under duress; because its payment was voluntary, plaintiff was not deprived of a constitutionally-protected property interest under 42 U.S.C. 1983. The Seventh Circuit affirmed, stating that the claim was more appropriate for small claims court and questioning: why would such a small amount cause the plaintiff to exert so much time and effort? The court stated that it suspected that only lawyers stood to benefit. View "Manistee Apartments, LLC v. City of Chicago" on Justia Law

Foreman alleged that Rockford police officers came to his restaurant because the man living in an upstairs apartment accused Foreman of cutting off his electricity. Foreman refused to answer questions and was arrested. Prosecutor Leisten charged Foreman with obstructing a police officer. The charge was dismissed. The court ordered Foreman to show cause why claims against Leisten should not be dismissed; the prosecutor would have absolute immunity in her individual capacity and the Eleventh Amendment bars official capacity claims. In a previous case Foreman’s lawyer, Redmond, had raised similar claims against prosecutors that were dismissed, so the court ordered Redmond to show cause why he should not be sanctioned. The court granted Leisten judgment on the pleadings, noting that Foreman had not offered a basis for challenging the existing law of prosecutorial immunity and that the official capacity claim would not fall under the Eleventh Amendment's exception for injunctive relief because Foreman’s complaint did not allege an ongoing constitutional violation. The court censured Redmond, stating that he did not argue for a change in the law until after he was faced with a recommendation of censure. The court dismissed 42 U.S.C. 1983 claims against the officers, concluding that they had probable cause to arrest Foreman. The Seventh Circuit affirmed, citing Supreme Court precedent that state prosecutors enjoy absolute immunity from suits under section 1983 for activities that are “intimately associated with the judicial phase of the criminal process.” View "Foreman v. Wadsworth" on Justia Law

In 2004, Nelms retained Katz-Crank, a Michigan lawyer with a practice in cemetery management, to assist in his acquisition of cemeteries and funeral homes in Indiana, Michigan, and Ohio. Trust funds associated with these cemeteries were valued at about $22 million. In 2007 Katz‐Crank learned that Nelms was under investigation by the Indiana Secretary of State for misappropriating cemetery trust assets. Katz‐Crank called Haskett, an investigator in that office, to offer cooperation. Haskett did not return the call. In 2008, Nelms was indicted for embezzling $22 million, pleaded guilty, and agreed to testify against Katz‐Crank. Haskett called some of Katz‐Crank’s clients and stated that Katz‐Crank was under criminal investigation. The Secretary of State and the Marion County prosecutor’s office issued press releases publicizing Katz-Crank’s arrest. A jury acquitted Katz‐Crank. Two years later Katz‐Crank sued Marion County and officials who were involved in her investigation and prosecution, under 42 U.S.C. 1983, for malicious prosecution, abuse of process, and violation of the Fourth and Fourteenth Amendments, with three federal conspiracy claims and state‐law claims for malicious prosecution, abuse of process, and intentional infliction of emotional distress. The district judge rejected all claims. The Seventh Circuit affirmed. Most of Katz‐Crank’s claims were barred by the Eleventh Amendment or prosecutorial immunity; the rest were properly dismissed for failure to state a plausible claim. View "Katz-Crank v. Haskett" 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

Attorney Goodson received an email from “Fumiko Anderson,” stating that she wanted to hire Goodson to recover money that she was owed in a divorce. Fumiko later stated that her ex-husband had agreed to settle and would mail a check to cover Goodson’s fee plus the settlement amount. The check was drawn on the First American account of an Illinois manufacturer. Goodson deposited the $486,750.33 check in his Citizens Bank client trust account. Fumiko told Goodson she needed the money immediately. Goodson directed the bank to transfer it to a Japanese entity that he believed to be Fumiko. It actually was an Internet-based fraudulent scheme: the “Fumiko Bandit.” When the fraud was discovered First American reimbursed its depositor and sought recovery from Citizens Bank, Goodson, and the Federal Reserve Bank. The Seventh Circuit affirmed judgment for the defendants, rejecting a breach of warranty argument. First American had received a “truncated” electronic image from the Federal Reserve but could have demanded a “substitute check” or could have refused to honor the check. First American was the victim of a mistake, but Illinois law provides no remedy for such a victim against “a person who took the instrument in good faith and for value.” The lawyer and the banks reasonably believed that they were engaged in the commonplace activity of forwarding a check; they did not fall below “reasonable commercial standards of fair dealing.” There was no “negligent spoliation of evidence” in Citizens Bank’s destruction of the original paper check. Goodson owed no professional duty to First American. View "First American Bank v. Federal Reserve Bank of Atlanta" on Justia Law

A year after Harrington, a drug dealer, was sentenced, by Judge St. Eve, to 264 months in prison (subsequently reduced to 212 months by a change in the sentencing guidelines) the government asked for his cooperation in its investigation of his attorney Brindley. Brindley was accused of encouraging his clients to lie on the witness stand. Despite Brindley’s acquittal after a bench trial (Judge Leinenweber presiding) the government moved under FRCP 35(b)(2)(C) asking Judge St. Eve to reduce Harrington’s sentence by 25 percent for his substantial assistance. The judge granted only a 14 percent reduction, reasoning that Harrington’s testimony did not convict Brindley; that Harrington “lied to this Court during his trial,” in addition to the underlying drug crime: and that Harrington got the benefit of the doubt during his original sentencing and did not receive enhancements requested by the prosecution. The Seventh Circuit vacated. There is no indication that Harrington lied at Brindley’s trial or had any incentive to see Brindley acquitted and cannot be blamed for Brindley’s acquittal. His previous lies could be the basis of a prosecution for perjury, but there was no such prosecution. The lack of clarity in explaining the ruling requires reconsideration. View "United States v. Harrington" on Justia Law

In 2012 Walgreens acquired a 45 percent equity stake in Alliance, plus an option to acquire the rest of Alliance’s equity for a mixture of cash and Walgreens stock. Walgreens later announced its intent to purchase the remainder of Alliance and engineer a reorganization whereby Walgreens would become a wholly-owned subsidiary of a new corporation, Walgreens Boots Alliance. Within two weeks after Walgreens filed a proxy statement seeking shareholder approval, a class action was filed; 18 days later, less than a week before the shareholder vote, the parties agreed to settle. The settlement required Walgreens to issue several requested disclosures and authorized class counsel to request $370,000 in attorneys’ fees, without opposition from Walgreens. The Seventh Circuit reversed approval of the settlement, calling the supplemental disclosures “a trivial addition to the extensive disclosures already made in the proxy statement.” “The oddity of this case is the absence of any indication that members of the class have an interest in challenging the reorganization.... The only concrete interest suggested … is an interest in attorneys’ fees.... Certainly class counsel, if one may judge from their performance in this litigation, can’t be trusted to represent the interests of the class.” View "Hays v. Berlau" on Justia Law

The Seventh Circuit held, in 2012, that the plaintiffs, injured by a 2007 flood in Bagley, Wisconsin, had forfeited an argument concerning Wis. Stat. 88.87, which concerns liability for negligent design and maintenance of a railroad grade that causes an obstruction to a waterway. Plaintiffs’ counsel identified new plaintiffs and refiled the same litigation in Arkansas state court to pursue that argument. The new suit was removed to the Western District of Wisconsin, which dismissed. The defendant asked the court to sanction plaintiffs’ counsel under FRCP 11 or 28 U.S.C. 1927 for pursuing frivolous claims and engaging in abusive litigation tactics. The court denied that request, reasoning that although the claims were all but foreclosed by the 2012 decision, they were not frivolous. The Seventh Circuit affirmed the dismissal, but reversed the denial of sanctions. The record indicated that counsel unreasonably and vexatiously multiplied the proceedings by filing suit in Arkansas, which had no connection to the case. On rehearing, the Seventh Circuit noted its inherent authority to sanction willful abuse of the judicial process. Stombaugh long had notice of the conduct on which BNSF sought sanctions, and had multiple opportunities make his case against the award of sanctions. View "Boyer v. BNSF Ry. Co." on Justia Law

Fowler pleaded guilty in Indiana to unlawful possession of a firearm by a “serious violent felon” who was also a habitual offender. The judge sentenced him to 15 years’ imprisonment for the possession offense and 15 extra based on his criminal history. While his case was on appeal, the Supreme Court of Indiana held (Mills) that a prior conviction used to establish “serious violent felon” status cannot also be used to establish habitual offender status. Fowler’s appellate lawyer did not raise Mills before the appellate court, which affirmed his sentence. On collateral review, the same court held that Fowler’s plea bargain waived reliance on the approach that Mills adopted. Fowler then sought federal relief under 28 U.S.C. 2254, claiming ineffective assistance of counsel. The district court denied this petition, relying on the state judiciary’s conclusion that Fowler had waived the benefit of Mills. The Seventh Circuit vacated, noting that Judge Magnus-Stinson, who denied Fowler’s federal collateral attack, had also sentenced Fowler during her time on the state’s bench; 28 U.S.C. 455(a) requires the case to be heard by a different federal judge. Section 2254 is designed to ensure that a fresh pair of eyes looks at the matter, from a different perspective. View "Robertson v. Butts" on Justia Law