Justia Legal Ethics Opinion Summaries

After years of litigation over royalties and rights related to musical compositions, the trial court determined that Currency is entitled to the royalties and the rights to one set of musical compositions, that it has a security interest in the other musical compositions, and that Structured has no rights.Currency appealed from the denial of its motion to recover the attorney fees it incurred litigating consolidated appeals resolved in 2019. Structured appealed from the denial of its motion for sanctions (Code of Civil Procedure section 128.7.1) in which it argued that Currency’s motion for attorney fees was frivolous.The court of appeal affirmed. The law of the case doctrine barred Currency’s motion. A party is not entitled to section 128.7 sanctions unless the target of the motion has had 21 days to withdraw the allegedly offending paper, claim, defense, contention, allegation, or denial. When calculating the earliest possible day that a motion for sanctions can be filed, the day the motion was served is excluded and the last day is included. The trial court properly denied Structured's motion for sanctions because it resolved the attorney fees motion on the 21st day after service of the motion for sanctions, the last day of the safe harbor period. View "Broadcast Music, Inc. v. Structured Asset Sales LLC" on Justia Law

In a lawsuit against his former clients and their new attorneys, attorney Pech alleged that the new attorneys interfered with his fee agreement by advising the clients not to file a complaint that Pech drafted. The new attorneys moved to strike all of Pech’s claims against them under Code of Civil Procedure section 425.16 (anti-SLAPP “Strategic Lawsuit Against Public Participation” statute). Pech argued the anti-SLAPP motion should have been denied because the new attorneys failed to identify specific allegations of protected conduct to be stricken and the new attorneys’ interference with the fee agreement was not a protected activity under the anti-SLAPP statute, or if it was protected, he established a probability of prevailing on the merits.The trial court granted the motion in part, striking the claim for interference with contract. The court of appeal affirmed. The new attorneys identified the conduct supporting the claim for interference with contract that they asserted was protected under the anti-SLAPP statute: advice about proposed litigation against a third party, including the clients’ rights and obligations under a fee agreement with another attorney. Pech did not demonstrate a probability of prevailing on the merits, because his claim is barred by the litigation privilege contained in Civil Code section 47(b). View "Pech v. Doniger" on Justia Law

The Housing Authority of New Orleans (HANO) agreed to pay Parkcrest $11 million to build affordable housing. Liberty was Parkcrest’s surety. HANO terminated Parkcrest before the project was done. Parkcrest sued, alleging breach of contract. Liberty and HANO executed a “Takeover Agreement,” incorporating the original contract; Liberty stepped into Parkcrest’s shoes to finish the project. Liberty hired Parkcrest as its completion contractor. HANO claimed that Liberty had forfeited any right to continue working on the project and requested that it relinquish control of the site. Liberty claimed the termination was wrongful. Rather than following the contract’s dispute resolution procedures, Liberty filed a complaint-in-intervention in the HANO-Parkcrest litigation.The district court concluded that HANO had breached the Takeover Agreement and the underlying HANO Contract by terminating Liberty for convenience after Liberty had substantially completed the project, awarded Liberty and Parkcrest damages, and held HANO liable to Liberty for attorney’s fees, but left those fees unquantified. The Fifth Circut affirmed but concluded it lacked jurisdiction to consider the fee award because a fee award is not a final judgment under 28 U.S.C. 1291 until reduced to a sum certain. The district court then awarded Liberty $526,192.25 in fees. The Fifth Circuit reversed. Liberty’s claim for fees arises from the contract, which authorizes fee-shifting “upon the receipt by [HANO] of a properly presented claim.” Liberty breached the contract’s dispute-resolution procedures, this breach was unexcused, so Liberty is entitled to nothing. View "Liberty Mutual Insurance Co. v. Housing Authority of New Orleans" on Justia Law

The Michigan Judicial Tenure Commission (JTC) filed a formal three-count complaint against Third Circuit Court Judge Bruce Morrow, arising from comments he made to two female prosecutors during a murder trial. The JTC issued a decision and recommendation for discipline on June 14, 2021, in which it largely agreed with a special master’s findings of fact and conclusions of law, but found that respondent had also violated Canon 2(B) by his conduct in Count III. After determining that the majority of the factors set forth in In re Brown, 461 Mich. 1291 (2000), weighed in favor of a more serious sanction, the JTC unanimously recommended that respondent be sanctioned with a public censure and a 12-month suspension without pay. Respondent petitioned the Michigan Supreme Court, requesting that the Court reject or modify the JTC’s recommendation. The Supreme Court found the JTC correctly found that respondent committed misconduct in office and that public censure and suspension were appropriate. However, the Court determined a 6-month rather than the JTC’s recommended 12-month suspension was proportionate. View "In Re Morrow " on Justia Law

The Commission on Judicial Conduct (Commission) ruled that Judge David Keenan, a King County Superior Court judge, violated the Code of Judicial Conduct (CJC or Code) when he approved a bus advertisement for North Seattle College. The ad pictured him and stated, in part, “A Superior Court Judge, David Keenan got into law in part to advocate for marginalized communities.” North Seattle College was a nonprofit community college where Judge Keenan received both his high school and his associate’s degrees. The ad ran for three weeks as part of North Seattle College’s fall enrollment campaign. The Washington Supreme Court concluded Judge Keenan’s conduct did not violate Rules 1.1, 1.2, or 1.3 of the Code. He did not violate his duty to be, and to appear, impartial, and he did not abuse the prestige of his office. The Court therefore reversed the Commission’s decision and dismissed the charges. View "In re Keenan" on Justia Law

In this appeal arising from the post-settlement process of apportioning a $300 million recovery between a class and its lawyers the First Circuit affirmed the district court's Fed. R. Crim. P. 11(b) sanction of Leiff Cabraser Heimann & Bernstein LLP (Lieff) and otherwise dismissed as unappealable Lieff's challenges to the district court's criticisms of Lieff's actions, holding that there was no error.Lieff served as one of the principal law firms representing a class of investors in a successful challenge to charges imposed by State Street Bank and Trust Company on foreign exchange products. The district court awarded a $60 million fee to the lawyers representing the class but formally sanctioned Lieff for engaging in misconduct without imposing any monetary penalty. The First Circuit affirmed in part and dismissed in part, holding (1) the district court did not err in sanctioning Lieff; and (2) the remainder of Lieff's allegations of error were unappealable. View "Lieff Cabraser Heimann & Berns v. Labaton Sucharow LLP" on Justia Law

Okada, “a titan of the gambling industry,” hired Bartlit to represent him in a multi-billion-dollar lawsuit against Wynn Resorts. The litigation settled in Okada’s favor for $2.6 billion. Okada refused to pay the $50 million contingent fee specified in the parties’ engagement agreement, which included an arbitration clause. Bartlit initiated arbitration before CPR in Chicago, the agreed-upon forum. Okada participated in the arbitration for over a year.Less than 72 hours before the evidentiary hearing, Okada informed the arbitrators that he would not be attending. The Panel stated that it would proceed without him and that his nonattendance could subject him to default. Okada replied that he rejected the validity of the engagement agreement and was unable to make the journey from Japan to Chicago for undisclosed medical reasons. Okada announced that he would not authorize his attorneys to participate in the arbitration, and canceled all witnesses, reservations, and services. The Panel held him to be in default and found that Okada owed the firm $54.6 million, including a $963,032 sanction for the costs and fees of the proceeding.Okada moved to vacate the award, arguing that he had been deprived of a fundamentally fair proceeding when the Panel decided the case without his participation or his evidence. The district court and Seventh Circuit rejected his argument. The Panel had several reasonable bases for proceeding without him and there was nothing unfair about the proceeding. View "Bartlit Beck, LLP v. Okada" on Justia Law

The Seventh Circuit upheld the bankruptcy court's ruling that the costs of plaintiff's attorney disciplinary proceedings imposed by the Wisconsin Supreme Court were not dischargeable under a provision of the Bankruptcy Code, 11 U.S.C. 523(a)(7). The court explained that, although there are several types of proceedings in which the Wisconsin Supreme Court may order costs, see Wis. S.C.R. 22.24(1), attorney discipline uniquely requires a "finding of misconduct" as a precondition for doing so. The court stated that the structure of Rule 22.24(1m) unambiguously singles out attorney discipline as a penal endeavor, and that conclusion has a statutory consequence under section 523(a)(7). Furthermore, the cost order amounts to compensation for actual pecuniary loss under section 523(a)(7). Finally, the court's conclusion that plaintiff's disciplinary costs are nondischaregable under section 523(a)(7) finds firm support in Supreme Court precedent and the court's own case law. View "Osicka v. Office of Lawyer Regulation" on Justia Law

Hardwick helped found a law firm, MHS. MHS later sold part of its foreclosure operation. Hardwick received $14-$15 million in compensation. Hardwick lost the money and owed millions in loans, many for gambling debts. When a bank and a casino sued him, Hardwick lied to a different bank in a line-of-credit application. In addition, in 2011-2014, Hardwick siphoned off about $26.5 million from MHS; $19 million came from trust accounts. Hardwick relied heavily on Maurya, who initially worked as an MHS controller. Hardwick promoted Maurya to CFO, giving her broad authority over the trust accounts. At Hardwick’s request, she repeatedly sent money from MHS to Hardwick or his creditors and significantly underreported the distributions. After a 2014 internal audit, Hardwick was convicted of wire fraud, conspiracy to commit wire fraud, and making false statements to a federally insured financial institution and was sentenced to 180 months’ imprisonment—an upward variance from the Guidelines range of 108-135 months. Maurya received a sentence of 84 months. A restitution order required Maurya and Hardwick to pay, jointly and severally, $40,307,431.00.The Eleventh Circuit vacated the restitution order as not supported by the reasoning required by law; affirmed Hardwick’s convictions and sentence; and vacated Maurya’s sentence. The district court violated the Ex Post Facto Clause by applying the 2018 Guidelines, which included a two-level substantial financial hardship enhancement added in 2015, after Maurya’s offense. View "United States v. Maurya" on Justia Law

An agreement between the Director of the Judicial Qualifications Commission (“JQC”) and Cary Hays III, Chief Magistrate of Crawford County, Georgia, was filed with the Georgia Supreme Court. The agreement was to resolve formal charges brought against Judge Hays arising from a physical altercation with a defendant that appeared before him. The agreement called for Judge Hays to serve an unpaid, 30-day suspension to be followed by a public reprimand. Pursuant to JQC Rule 23, the agreement was submitted to the JQC’s Hearing Panel, which voted 2-1 to accept it, and then filed it with the Supreme Court. Because the record and the limited relevant precedent the Court had found supported the proposed discipline, it accept the agreement and ordered that Judge Hays be suspended for 30 days without pay and be publicly reprimanded for his violations of the Georgia Code of Judicial Conduct. View "Inquiry Concerning Judge Cary Hays, III" on Justia Law