Justia Legal Ethics Opinion Summaries

Represented by Folkenflik, Plaintiffs, victims of Bressman’s manipulation of stock prices, brought civil securities fraud and RICO claims against Bressman and others. Bressman filed for Chapter 11 bankruptcy. Plaintiffs then filed the adversary complaint. The civil securities fraud and RICO claims continued against Bressman’s co-defendants. In 1998, some of those claims were settled for $6,250,000. Folkenflik received the funds. The approved Settlement Agreement included a confidentiality order. Months later, Plaintiffs sought a default judgment against Bressman. Folkenflik submitted an affidavit that indicated that the damages totaled $5,195,081, provided a comprehensive account of the underlying proceedings, but did not mention the settlement. The bankruptcy court entered a default judgment against Bressman. Plaintiffs later sought RICO damages and attorneys’ fees, again not mentioning the settlement. The bankruptcy court entered a RICO judgment for treble damages: $15,585,243 plus $910,855.93 in attorneys’ fees. More than 10 years later, Folkenflik learned that Bressman might receive $10 million, and filed ex parte applications on behalf of Plaintiffs to appoint a receiver to search for and seize Bressman’s assets. Searches and seizures were executed. Flolkenflik did not disclose the settlement and made misleading representations to the courts and Bressman’s attorney. When the courts learned about the settlement, the orders were vacated and the seized materials returned. The bankruptcy court found that Folkenflik’s conduct constituted fraud on the court, vacated the default judgment, and dismissed the adversary complaint with prejudice. The Third Circuit affirmed. Bressman’s motion was not barred by laches. Folkenflik’s failure to disclose the settlement constituted intentional fraud. Even if he believed that the confidentiality order prohibited him from disclosing the existence of the Agreement, he could have so stated in his affidavit and asked the courts for guidance. View "In re: Bressman" on Justia Law

Plaintiffs are parents of children with disabilities who were enrolled at the Charter School, which did not consistently satisfy its Individuals with Disabilities Education Act (IDEA) obligations to provide the children with a “free appropriate public education,” 20 U.S.C. 1412(a)(1)(A). In 2014, the School entered with Plaintiffs into settlement agreements. The School was to fund compensatory education for each child and contribute toward Plaintiffs’ attorneys’ fees. The School permanently closed in December 2014 and never met its obligations under the agreements. Plaintiffs filed administrative due process complaints with the Pennsylvania Department of Education, alleging that the Department should provide compensatory education. The hearing officer dismissed the complaints. Plaintiffs then sued the School and the Department, seeking reversal of the administrative decisions dismissing their claims, remand, and attorneys' fees and costs. Aside from the requested award of fees and costs, Plaintiffs obtained all of the relief they sought. On remand, Plaintiffs and the Department agreed on the number of hours of compensatory education. Plaintiffs unsuccessfully sought attorneys’ fees. The Third Circuit reversed, rejecting the district court’s reasoning that the Plaintiffs received only interlocutory procedural relief and were not prevailing parties. Success on a claim for procedural relief can constitute “a victory ‘on the merits’ that confer[s] ‘prevailing party’ status.” View "H. E. v. Walter D. Palmer Leadership Learning Partners Charter School" on Justia Law

Plaintiffs were among a class of individuals working in two separate part-time capacities for Lackawanna County. The County apparently tracked and paid these employees for each of their individual jobs, but in 2011 became aware that it had failed to aggregate the hours in both jobs, resulting in a failure to pay the overtime rate for hours beyond 40 hours per pay period. Lackawanna County conceded basic overtime violations under the Fair Labor Standards Act, 29 U.S.C. 207(a)(1). At trial, the plaintiffs presented inadequate evidence on “willfulness,” so that the court entered a directed verdict on that issue. A finding of willfulness expands the limitations period for claims under the Act, in effect permitting a plaintiff to receive a larger award. The Third Circuit affirmed. The evidence did not suggest the County was subjectively aware of the FLSA problem at the time of the violations, at least with respect to the plaintiffs. A lack of evidence going to good faith is not the same as evidence in support of intentionality. The court also affirmed an award of attorneys’ fees at an hourly rate of $250. View "Souryavong v. County of Lackawanna" on Justia Law

E.R.'s parents and Ridley School District disputed Ridley’s obligations under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400-1482, “individualized education program” (IEP) requirement. An IEP may require the child to be placed in a private school with reimbursement from the school district. E.R.’s parents enrolled her in a private school and sought reimbursement. The hearing officer agreed with E.R.’s parents, rendering E.R.’s private-school placement her “then-current educational placement.” The Third Circuit reversed the hearing officer. E.R.’s parents did not pursue their IEP-related claims but asked Ridley to reimburse them for their private-school expenses between the 2009 administrative decision and the 2012 conclusion of the appeal Ridley declined. E.R.’s parents sued under the IDEA’s “stay put” provision, 20 U.S.C. 1415(j), seeking reimbursement through final resolution of the dispute. The Third Circuit affirmed the district court’s reimbursement order. Ridley’s certiorari petition to the Supreme Court was denied in 2015; Ridley then reimbursed E.R.’s parents. They sought attorneys’ fees under 20 U.S.C. 1415(i)(3)(B)(i). The Third Circuit reversed denial of the motion. A fee award is available to parents who, after unsuccessfully challenging a school district’s proposed educational placement for their child, later obtain a court order requiring the district to reimburse them for the costs of the child’s “stay put” placement—the “then-current educational placement” in which the Act permitted the child to remain while administrative and judicial proceedings were pending. View "M. R. v. Ridley School District" on Justia Law

In 2004, Trzaska became the head of L’Oréal ’s regional patent team. Rules of Professional Conduct (RPC) bar attorneys from filing frivolous or bad-faith patent applications. L’Oréal established quotas for patent applications. Management stated that, if the team failed to meet that quota, “there would be consequences which would negatively impact their careers and/or continued employment.” L’Oréal also adopted an initiative that resulted in fewer invention disclosures submitted to the team for vetting. With competing policies—one requiring a minimum of applications and one effectively reducing the invention disclosures being evaluated— Trzaska’s team did not believe it could meet the quota without filing applications for products that it did not in good faith believe were patentable. Trzaska told management that his team would not do so. L’Oréal offered Trzaska severance packages, with the alternative of “get back to work.” After he rejected both severance packages, L’Oréal fired Trzaska. Trzaska sued for wrongful retaliatory discharge under the Conscientious Employee Protection Act, N.J. Stat. 34:19-1, which protects an employee from retaliatory termination following his refusal to participate in illegal activity at the employer's request, including practices that the employee believes contravene public policy. The district court dismissed. The Third Circuit reversed, stating that the allegations were not “skin deep.” The basis of the claim is not L’Oréal’s violation of the RPCs; it is the instruction that would result in the employees' disregard of their RPC duties and violate a public policy mandate. View "Trzaska v. LOreal USA Inc." on Justia Law