Justia Legal Ethics Opinion Summaries

Carlson was co-lead counsel representing the plaintiffs in the CBNV litigation. He began working on the case while an associate with the SSEM firm and continued working on it after he left the firm. He entered into agreements with SSEM regarding how fees recovered in CBNV and other cases would be allocated. After the final order approving the CBNV class settlement and fee award, SSEM filed a state court breach of contract action against Carlson, alleging that he owed the firm part of his CBNV fees. Carlson moved the federal district court, which had handled the CNBV litigation, to stay the state case and confirm his fee award. That court exercised ancillary jurisdiction to stay the state case and granted Carlson’s motion, concluding that SSEM was not entitled to any portion of the Carlson's fee because a condition precedent had not occurred. The Third Circuit reversed. The district court erred in exercising ancillary jurisdiction over the state contract dispute because it did not retain jurisdiction over disputes arising from the allocation of fees, the state law contract claim is factually distinct from the federal CBNV claims, exercising ancillary jurisdiction was not necessary to resolve matters properly before it, and the court had no control over the funds SSEM seeks. View "In Re: Community Bank of Northern Virginia Mortgage Lending Practices Litigation" on Justia Law

Pollick represented students in civil rights claims against a school district and a teacher. After the first trial, the jury returned a verdict for Pollick’s clients. The Third Circuit affirmed an order requiring a new trial based upon Pollick’s misconduct. The second trial, only against the school district, resulted in a complete defense verdict. Before a third trial, the teacher tendered a Rule 68 offer of judgment for $25,000, which Pollick’s clients accepted; it allowed for “reasonable attorneys’ fees and costs as to the claims against [the teacher] only.” Pollick submitted a petition requesting $733,002 in fees and costs incurred while representing her clients against both the district and the teacher, including fees and costs for the second trial in which Pollick’s clients were not the prevailing party. The court ordered Pollick to show cause why she should not be sanctioned for seeking “fees and costs for portions of the litigation that were necessitated by her own vexatious conduct, as against defendants that she ultimately did not prevail, for certain expenses previously held unrecoverable ... and relative to the total settlement of $25,000[.]” Pollick proffered the “utterly ridiculous argument” that it was the job of opposing counsel and the court to ferret out entries that were invalid. Noting that the fee petition was single-spaced, in 6- or 8-point font that consumed 44 pages and included hundreds of inappropriate, unethical entries, the court denied Pollick’s petition in its entirety, issued concurrent $25,000 sanctions (FRCP 11; 28 U.S.C. 1927), and referred Pollick to the Pennsylvania Supreme Court’s Disciplinary Board. The Third Circuit affirmed, concluding that the “drastic” measures were justified. View "Young v. Smith" on Justia Law

Dissatisfied with NYCM’s handling of his insurance claim related to a serious car accident, Clemens filed suit, asserting a contractual underinsured motorist (UIM) claim and a claim under the Bad Faith Statute, 42 Pa. Cons. Stat. 8371. After NYCM removed the case to federal court, the parties settled the UIM claim for $25,000. The bad faith claim proceeded to trial. A jury awarded Clemens $100,000 in punitive damages. As the prevailing party under the Bad Faith Statute, Clemens then sought $946,526.43 in attorneys’ fees and costs. The district court reviewed every time entry submitted, performed a traditional lodestar analysis, and concluded that 87 percent of the hours billed had to be disallowed as vague, duplicative, unnecessary, or inadequately supported by documentary evidence. In light of that substantial reduction, the court deemed Clemens’s request “outrageously excessive” and exercised its discretion to award no fee. Represented by new counsel, Clemens appealed. The Third Circuit affirmed, formally endorsing a view adopted by several other circuits: where a fee-shifting statute provides a court discretion to award attorney’s fees, such discretion includes the ability to deny a fee request altogether when, under the circumstances, the amount requested is “outrageously excessive.” View "Clemens v. New York Central Mutual Fire Insurance Co." on Justia Law

Before trial on a 77-count indictment that charged Appellants with operating a ticket-fixing scheme in the Philadelphia Traffic Court, the district court denied a motion to dismiss charges of conspiracy (18 U.S.C. 1349), mail fraud (18 U.S.C. 1341), and wire fraud (18 U.S.C. 1343). A private citizen and the Traffic Court administrator subsequently pleaded guilty to all counts, then appealed whether the indictment properly alleged mail fraud and wire fraud. Three Traffic Court Judges proceeded to a joint trial and were acquitted of fraud and conspiracy but convicted of perjury for statements they made before the Grand Jury. They disputed the sufficiency of the evidence, arguing that the prosecutor’s questions were vague and that their answers were literally true; claimed that the jury was prejudiced by evidence on the fraud and conspiracy counts; and argued that the court erred by ruling that certain evidence was inadmissible. The Third Circuit affirmed the convictions. The Indictment sufficiently alleged that the defendants engaged in a scheme to defraud the Commonwealth and the city of money in costs and fees; it explicitly states that the scheme deprived the city and the Commonwealth of money, and describes the object of the scheme as obviating judgments of guilt that imposed the fines and costs. View "United States v. Hird" on Justia Law

Philadelphia police officers shot and killed Purnell, who died intestate. Purnell’s minor daughter is the sole beneficiary of the estate. Murray, Purnell’s mother, hired an attorney and obtained letters of administration to act on behalf of her son’s estate. Murray filed a lawsuit on behalf of the estate alleging excessive force against the city and the officers under 42 U.S.C. 1983. The district court granted the city summary judgment but allowed her claims against the officers to proceed to a jury trial. The officers' defense was that they had used deadly force in self-defense. The jury returned verdicts in favor of the officers. Murray filed a pro se notice of appeal. The Third Circuit ordered the pro bono appointment of amicus curiae to address whether Murray may proceed pro se on behalf of Purnell’s estate. Under 28 U.S.C. 1654, “parties may plead and conduct their own cases personally or by counsel” in the federal courts. Although an individual may represent herself pro se, a non-attorney may not represent other parties in federal court. The Third Circuit then dismissed Murray’s appeal: a non-attorney who is not a beneficiary of the estate may not conduct a case pro se on behalf of the estate. View "Murray v. City of Philadelphia" on Justia Law

Relator claimed (False Claims Act, 31 U.S.C. 3729-3733) that C&D manufactured and shipped 349 defective batteries to the U.S. government for use in intercontinental ballistic missile launch controls. The matter settled for $1.7 million, about six percent of the amount demanded in a Second Amended Complaint, entitling Relator to reasonable attorneys’ fees and costs. The parties were unable to agree on attorneys’ fees. The district court concluded that both parties’ counsel were uncooperative and did not act in good faith. Relator eventually increased his fee demand to $3,278,115.99, “almost $1 million more than the fees [he] sought a year ago and almost twice the dollar amount of the settlement [he] reached.” Relator used hourly rates that he “extrapolated” from actual Community Legal Services rates, which were higher than those that he originally used to calculate his demand. The court reduced Relator’s recoverable attorney hours for depositions, document review, summary judgment motions, a motion for reconsideration, Daubert motions, and travel time expenses, and applied a 10 percent reduction for lack of success on the merits. The parties agreed that for the purposes of the fee award, the court could use $1,794,427.27 for fees and $164,585.49 for costs. The Third Circuit remanded for consideration of “fees on fees” but otherwise affirmed. View "Palmer v. C & D Technologies, Inc" on Justia Law

Firefighters alleged that they suffered hearing losses caused by the loud noise emitted by a manufacturer’s fire sirens. A perfunctory investigation conducted by the manufacturer during discovery revealed the firefighters’ lawsuit to be clearly time-barred, and also revealed that one firefighter had not even suffered hearing loss attributable to noise exposure. Eventually, Plaintiffs requested the district court to dismiss the case with prejudice (Federal Rule of Civil Procedure 41(a)(2)). In doing so, the court awarded attorneys’ fees and costs in favor of the manufacturer, making an explicit reference to plaintiffs’ counsel’s practice of repeatedly suing the fire siren manufacturer in jurisdictions throughout the country in a virtually identical fashion. The Third Circuit affirmed. Although attorneys’ fees and costs are typically not awarded when a matter is voluntarily dismissed with prejudice, such an award is appropriate when exceptional circumstances exist. Exceptional circumstances include a litigant’s failure to perform a meaningful pre-suit investigation, as well as a repeated practice of bringing meritless claims and then dismissing them with prejudice after both the opposing party and the judicial system have incurred substantial costs. Such exceptional circumstances are present in this case. View "Carroll v. E One Inc." on Justia Law

Under the Individuals with Disabilities Education Act (IDEA), an administrative due process complaint about a child's educational placement can result in an administrative hearing. At least 10 days before the hearing, the school district can extend a “10-day” settlement offer, 20 U.S.C. 1415(i)(3)(D)(i)(I)-(III). That offer limits a parent’s eligibility for attorney’s fees to only those fees accrued before the offer. If a parent rejects the offer, the parent may only receive attorney’s fees for work done after the offer if the hearing leads to more favorable relief than the offer included, or the parent was substantially justified in rejecting the offer. Rena filed a complaint against the Colonial School District to determine an appropriate placement for her daughter. Colonial extended and Rena rejected a 10-day offer. After a hearing, an administrative officer ordered a private school placement for the student. The district court awarded Rena attorney’s fees only for work performed before the offer. The Third Circuit reversed, holding that Rena was substantially justified in rejecting Colonial’s offer. Colonial made a valid offer of settlement and Rena did not receive more favorable relief in the administrative order but she was substantially justified in rejecting the offer because it did not address attorney’s fees. View "Rena C. v. Colonial School District" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law