Thursday, March 5, 2015

Disqualification News (and New Risks)


"DQ Risk: Representing Lawyers and Receiving Confidential Information About Their Clients" --
  • "The law firm at issue, AlvaradoSmith, decided to represent another law firm, Floyd & Buss, in a lawyer-client fee dispute against the Floyd firm’s former client, Shared Memory Graphics.  In the course of that dispute, the Floyd firm legitimately shared with AlvaradoSmith, and AlvaradoSmith legitimately received, Shared Memory Graphics’ confidential and privileged information (because this information was at issue in the fee dispute and the disclosure fell within exceptions to confidentiality and privilege)."
  • "When AlvaradoSmith later began representing an expert witness against Shared Memory Graphics in a fee dispute arising from the same underlying litigation, Shared Memory Graphics moved to disqualify AlvaradoSmith."
  • "Thus, Shared Memory Graphics was attempting to disqualify AlvaradoSmith even though the firm had properly received the confidential information and even though the firm was aligned against Shared Memory Graphics in both disputes.  Shared Memory Graphics was nevertheless successful in having AlvaradoSmith disqualified."
  • "With respect to fee disputes in particular, the court noted that the information from the former representation will not invariably be substantially related to the present matter."
  • "Some authority and logic suggest that, should the firm screen the lawyers who receive the nonclient’s confidential information, the firm might later avoid disqualification."
"Panel Reverses Law Firm's Disqualification" --
  • "A disqualification ruling in a Commercial Division case has been overruled by the Appellate Division, First Department. In Becker v. Perla, 651575/13, the unanimous panel Thursday upset Justice Shirley Kornreich's disqualification of Saul Feder and his firm, Regosin, Edwards, Stone & Feder, who was counsel to lead plaintiff, Ronny Becker."
  • "It was uncontested that Feder had represented defendant Daniel Perla in a prior matter, and that Becker was adverse to Perla in the current case."
  • "But the panel said that 'the present and prior matters are not substantially related, and [Feder] did not obtain confidential information from the defendants during the prior matter.'"

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