Justia Legal Ethics Opinion Summaries

Schlumberger hired Rutherford in 2006. She was promoted to Director of Intellectual Property and later to Deputy General Counsel for Intellectual Property. Rutherford managed a copyright lawsuit and evaluated legal risks involving Petrel, Schlumberger’s software platform for three-dimensional modeling of oil wells. One competitor’s product analyzed during this project was Austin’s RECON software (the 319 patent). After seven years, Rutherford left Schlumberger. She began working as Senior Vice President and Associate General Counsel at Acacia, which began discussions to acquire the 319 patent. Petrel was discussed as a potential target of patent infringement litigation. Rutherford participated in the decision to hire CEP as outside counsel for all 319-patent-related litigation. Dynamic was formed to hold the 319 patent. Dynamic filed several lawsuits, including one accusing Petrel of infringement. On Schlumberger’s motion, the court disqualified Rutherford, other Acacia in-house counsel, and CEP from representing Dynamic in the case. Schlumberger also sued Rutherford in Texas state court, presenting evidence that she retained confidential, privileged information to provide to Acacia. The Texas court dismissed all but a breach-of-contract claim and sanctioned Schlumberger for bringing the suit. The federal district court found that Rutherford’s work at Schlumberger was substantially related to her work at Acacia; that the evidence of her involvement created an irrebuttable presumption that she acquired confidential information requiring her disqualification; that the acquired knowledge should be imputed to all Acacia attorneys for purposes of Dynamic’s suit; and that disqualification extended to CEP. Because the pleadings were drafted by disqualified counsel, the court dismissed Dynamic’s claims without prejudice. The Federal Circuit affirmed, citing the ABA Model Rules and the Texas Disciplinary Rules. View "Dynamic 3D Geosolutions LLC v. Schlumberger Ltd." on Justia Law

In 2004, buyers contracted to buy an island off of St. Thomas and a St. Thomas launch for $21,000,000 and $2,500,000. The sellers’ attorney, D’Amour, also owned the escrow company involved in the transaction. The buyers deposited $1,000,000. They later paid another $500,000 to extend the closing date. The deposits were nonrefundable. After another extension, the buyers had not paid the purchase price; the sellers had not conveyed marketable title. D’Amour sent the buyers a notice of default; they demanded refunds. The buyers sued; the sellers filed counterclaims. The district court granted summary judgment to the buyers on a conversion claim against D’Amour for $500,000. A jury awarded one buyer, Taylor, $1,500,000 in contract damages from the sellers and $46,000 for fraudulent misrepresentation by D’Amour. The jury awarded the sellers $339,516.76 from the other buyers for misrepresenting their ability to purchase the properties; the court granted judgment as a matter of law, finding the tort claims barred by the gist of the action doctrine. The court reduced Taylor’s contract damages award to $0, but upheld the fraudulent misrepresentation verdict against D’Amour The Third Circuit concluded that all parties failed to perform under the contracts and denied all damages, but concluded that Taylor was entitled to restitution from the sellers ($1,500,000). On remand, the district court awarded prejudgment interest at rates of three and six percent; declined to award attorney’s fees to Taylor, citing Taylor’s “role in breaching the contract” and the complexity of the case; and concluded that D’Amour was not entitled to attorney’s fees . The Third Circuit affirmed, except the award of prejudgment interest at a rate other than the statutorily provided 9 percent. View "Addie v. Kjaer" on Justia Law

MLTF substantially prevailed in a Freedom of Information Act (FOIA), 5 U.S.C. 552, action filed against the Government. MLTF filed a motion for attorney fees pursuant to 5 U.S.C. 552(a)(4)(E), requesting that the court award it fees consistent with the current billing rates for its attorneys. The district court (Ware, C.J.) granted the motion in part, awarding MLTF attorney fees calculated at $200 an hour, which was well below the current billing rates for its attorneys. The district court (Rogers, J.), upon the Government’s motion to consider the issue de novo, determined that the first judge had not erred in awarding only $200 an hour. The court concluded that notwithstanding MLTF’s failure to designate for appeal Judge Ware’s underlying fee order, MLTF’s intent to appeal the underlying fee award is apparent from both the factual circumstances and MLTF’s extensive briefing on the issue; the Government also cannot demonstrate prejudice; and thus the court chose to exercise its discretion and consider the appeal on the merits of Judge Ware's underlying fee award. On the merits, the court concluded that, consistent with its burden, MLTF provided substantial evidence of the prevailing market rate for the applicable periods. Accordingly, the court vacated the district court's fee award and remanded for a recalculation of the appropriate rate. Finally, the court concluded that MLTF falls within the class of litigants entitled to attorney fees on appeal, and MLTF may request attorney fees on appeal in accordance with Ninth Circuit Rule 39-1.6. Accordingly, the court vacated and remanded. View "Hiken v. Dep't of Defense" on Justia Law

Riding in a non-competitive charity bicycling event, Minick fell while descending a hill in Petaluma. Erwin, riding behind Minick, saw him lose control of his bicycle after hitting a large pothole. Minick exhausted his administrative remedies, and then, represented by Watson, brought suit under Government Code section 835. The city moved for summary judgment, arguing that Minick, who had no recollection of the accident, had no proof of any dangerous condition on public property. Watson opposed the motion, attaching grainy, low-resolution black-and-white photographs of the alleged site, a copy of a police report containing Erwin's statement that he saw a pothole where Minick fell; and an engineer's expert declaration that a defect in the street caused the fall. The court issued a tentative ruling denying the motion. At the hearing, Watson appeared, but showed signs of physical distress and was taken to a hospital by ambulance. The day before a continued hearing, the court again tentatively denied the motion. After hearing arguments, the court granted the motion, referring to Watson’s arguments as “ludicrous.” The court later granted relief under Code of Civil Procedure section 473(b), accepting Watson’s explanation that he had been suffering from a serious illness for which he was under heavy medication. The court of appeal affirmed., When a court finds a wholesale disintegration of the attorney’s professional capacity because of a medical crisis, the availability of relief for excusable neglect is within the court’s sound discretion. View "Minick v. City of Petaluma" on Justia Law

A common-benefit trust fund was established to compensate attorneys leading the MDL concerning Bayer’s LibertyLink LL601 genetically modified rice. On appeal, Bayer and Riceland challenge the district court's order requiring Bayer to cause the deposit of a portion of a settlement between Bayer and Riceland into the fund. Bayer and Riceland argue that because their settlement was the product of negotiations following a state-court judgment, the district court lacked jurisdiction to order Bayer to cause a percentage of the settlement to be deposited into the fund. The court concluded that the district court properly ordered Bayer to hold back a portion of the Bayer-Riceland settlement. In this case, application of the Common Benefit Order was a comparable collateral matter that the district court had jurisdiction to resolve in light of the settlement; the district court properly applied the Common Benefit Order to the settlement and required a percentage of the entire settlement to be redirected to the common-benefit fund; and the district court did not plainly err in assigning to Bayer the duty of causing a deposit of the funds due under the Common Benefit Order. Accordingly, the court affirmed the judgment. View "Riceland Foods v. Bayer Cropscience US" on Justia Law

One sitting judge and two aspiring Kentucky judges challenged the Commonwealth’s Code of Judicial Conduct clauses prohibiting “campaign[ing] as a member of a political organization,” “endors[ing] . . . a candidate for public office,” “mak[ing] a contribution to a political organization,” making any “commitments” with respect to “cases, controversies, or issues” likely to come before the court, making “false” or “misleading” statements. The sitting judge, previously appointed, made statements regarding being “re-elected,” and concerning penalties for heroin use. A candidate for the judiciary referred to himself as a Republic and his opponents as Democrats. The Third plaintiff wanted to publicly participate in Republican Party functions. The district court struck some of these provisions and upheld others. The Sixth Circuit found contributions, leadership, false statements and endorsement clauses valid. The campaigning, speeches, clauses are unconstitutional. The misleading statements prohibition is valid on its face, but may be unconstitutional as applied to one of the plaintiffs. View "Winter v. Wolnitzek" on Justia Law

This attorneys’ fees dispute arises out of an underlying lease dispute between HDRE and RARE. HDRE appealed the district court's award of attorneys’ fees for RARE under an attorneys’ fees provision in a lease agreement between the parties that was subsequently novated by another agreement. The court held that the novation of the Lease extinguished the parties’ rights under that agreement to prevailing-party attorneys’ fees and that the district court consequently abused its discretion in awarding fees to RARE. The court disagreed with the district court’s conclusion that several provisions of the Lease evince the parties’ intent for the attorneys’ fees provision to survive a future novation. Accordingly, the court reversed the district court's judgment. View "HDRE Bus. Partners Ltd. Grp. v. RARE Hosp. Int'l" on Justia Law

Plaintiffs filed suit alleging that 21 Budget rental car businesses willfully violated the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g)(1), by issuing receipts that contained more than five digits of customers’ credit card numbers. The parties subsequently mediated and agreed on a proposed settlement. The settlement provided that each class member would receive a certificate worth $10 off any car rental or $30 off a rental over $150, with no holiday blackout days. Applying the Class Action Fairness Act (CAFA), 28 U.S.C. 1712(a)-(c), the district court awarded $23,137.46 in attorneys’ fees and costs, and a $1,000 class representative incentive fee. Plaintiffs appealed. The court concluded that the district court erred by following the In re HP Inkjet Printer Litig. mandatory approach in applying section 1712(a)-(c) without explicitly stating that the award was based on an exercise of the district court’s discretion to determine a reasonable attorney’s fee. But plaintiffs do not argue the award was a breach of the district court’s discretion, and if the court remanded, it would be for an explicit exercise of that discretion, applying the principles of section 1712(a)-(c). The court determined that any award greater than $17,438.45 would be unreasonable in light of class counsel’s limited success in obtaining value for the class. Accordingly, the court concluded that any error was harmless and affirmed the judgment. View "Galloway v. The Kansas City Landsmen, LLC" 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

Seed Company Limited, a Japanese company, is led by Shigeru Tamai. Tamai invented a dispenser of correctional tape enabling users to correct printed documents by rolling white tape over errors. Seed and Tamai applied for patents but the application was denied because of legal counsel’s noncompliance with Patent Office regulations when filing a motion related to the application. As a result of the error, another inventor obtained the patent for the same invention. Seed and Tamai filed a legal malpractice suit against counsel. The district court subsequently granted summary judgment for defendants. The court concluded that the statute of limitations had elapsed with respect to the malpractice claims against one group of defendants - those who ceased working on behalf of Seed and Tamai when the law firm engaged in the representation split into two firms. With regard to the remaining defendants - those who continued to represent Seed and Tamai after the breakup of the firm - the court found that the statute of limitations poses no bar to the malpractice action. On the merits of the claims against those defendants, the court concluded that there is a genuine dispute of material fact about whether the alleged error is one of professional judgment, and whether defendants exercised reasonable care in making the judgment. Accordingly, the court reversed and remanded as to this issue. View "Seed Co. Ltd. v. Westerman" on Justia Law