Tuesday, December 13, 2011

With Swift Ethical Screen, Quinn Emanuel Survives Disqualification from $10 Billion Lawsuit

We first highlighted this case in October, when a Bank of America moved to disqualify Quinn Emanuel, counsel for AIG in a $10 billion lawsuit because of alleged conflicts stemming from the move of  lateral partner. [h/t to Bill Frievogel for noting the recent update.]

The lawyer worked 5.8 hours on the matter at Quinn, starting in July, 2011, before Quinn became aware of the potential conflict after opposing counsel wrote them in September. Quinn argued that the matters were unrelated, that no sharing of confidential information had taken place and that the firm erected an ethical screen immediately upon discovering the situation.

Given the stakes, in order to avoid the impression or potential of future disclosure, the lawyer voluntarily left the firm in October, 2011.

When the motion was first filed, a legal ethics expert agreed the situation would likely not warrant disqualification, but opined that “…it could prove 'problematic' if presiding judge Barbara Jones decided Becker was not screened fast enough, but that an effective screen could address this issue.”

Last week, the judge agreed that disqualification was unwarranted [see: American Int'l Group, Inc. v. Bank of Am. Corp., 11 Civ. 6212 (BSJ) (S.D.N.Y. Dec. 6, 2011)]
  • The decision noted that: “…screens erected immediately upon discovery of the conflict weigh against disqualification.”
  • However: “Quinn’s screening procedure was imperfect, without question.”
  • But she ruled that the firm successfully rebutted the presumption that confidences were shared. For one, the lawyer brought no client files to the new firm. Furthermore, three years had passed since the lawyer worked on the original matter. Quinn also conducted extensive interviews of all significantly involved members of the matter team, securing affidavits that no confidences were sought or received.
  • Physical separation (the lawyer was based in London), the size of the firm (500+ lawyers) and the firm’s long client relationship also influenced the judge’s ruling.
This is yet another recent example where IT plays a critical role in disqualification defense. In this case, IT conducted an electronic audit of firm’s document system to support the firm’s arguments. (In this case, the audit showed the lawyer accessed two documents related to the matter. But that was insufficient to warrant disqualification, given the facts and factors in play in this case.)

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