Tuesday, September 28, 2010

Conflict Disqualifies Law Firm from $1 Billion Case

Following last week's roundup of recent law firm conflicts and ethical screening snafus in the news, Winston & Strawn has just been disqualified from defending Pfizer in a $1 billion lawsuit connected with the drug Celebrex. As reported by the National Law Journal, a Winston partner previously represented Brigham Young University, which brought a patent suit against Pfizer:
  • "The magistrate judge found that Schaerr's relationship with the school created a conflict that infected the rest of Winston & Strawn. That firm, she said, appeared to 'abandon' BYU in favor of a more lucrative matter."
Interestingly, both Winston and Strawn, and Sidley Austin, where the partner in question previously worked, both represented BYU, and both had obtained advanced waivers to clients adverse to the university. But dispute arose over the wording of the Winston waiver, which implied only parties represented by the firm at the time it was executed were covered. (The firm subsequently took on Pfizer as a client.)

Furthermore, rather than screening the conflicted lawyer in question, the partner became directly involved in the Pfizer matter, in some ways that created problems for both his previous client and the court:
  • "Schaerr offered to help broker a settlement between BYU and Pfizer by acting as a 'go between' to bring the parties to the table... Soon after the phone call, Schaerr sent an e-mail to Orme saying that he regretted 'the difficult position' his firm's 'potential involvement' in the Pfizer litigation had created for the school. 'Yet I also have a fiduciary duty to my partners, and (especially in turbulent economic times) a moral duty to our employees, not to stand in the way, unnecessarily, of new opportunities that come to other partners,' he added. Wells wrote that she found Schaerr's attitude 'troubling': 'In essence, it appears that Mr. Schaerr is willing to leave his loyalty for a current client behind if a more lucrative offer comes along.'"

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