Monday, March 30, 2015

Engagements Matter (Conflicts, Disqualifications & "Hot Potatoes")


Interesting disqualification story including a bit of debate about engagement letters, a topic we've touched on repeatedly recently: "Greenberg Traurig Is Disqualified in 2 TitleMax Suits" --
  • "Greenberg Traurig and Atlanta partner Mark Trigg are fighting two judges' orders disqualifying them from defending auto title loan company TitleMax against lawsuits by competitors accusing it of unfair business practices."
  • "Watstein said there is no dispute that Greenberg Traurig represented Select Management Resources (SMR), an affiliate of the plaintiff companies (but not among the named plaintiffs). The sides also agree that last year SMR's general counsel specifically refused to waive Greenberg Traurig's conflict when the firm entered an appearance on behalf of TitleMax, the plaintiff companies' biggest competitor, Watstein said."
  • "There is also ample evidence that Greenberg provided substantial advice to some of the other plaintiff companies as part of its SMR duties, even though it did not have a written agreement with those entities, Watstein added."
  • "Greenberg Traurig has argued that it provided only sporadic representation to SMR. Over the course of eight years, its filings said, the firm billed for less than 34 hours involving five discrete issues handled by partners in its offices in Washington, D.C., and Houston. The firm added that no 'implied' attorney-client relationship existed between it and SMR's affiliates."
  • "Greenberg Traurig also has pointed to a 2006 engagement letter with SMR stating that it would serve as 'limited engagement-legal counsel' for 'matters that may be assigned to [the firm] from time to time.' No other entity is mentioned in that letter."
  • "Watstein responded that Greenberg Traurig "places a lot of emphasis on that initial engagement letter. But they subsequently provided substantial legal advice, which is the standard for proving an attorney-client relationship. I can't provide you a ton of legal advice, then claim, 'Sorry, I didn't represent you because we didn't have a signed letter identifying you as our client.'"
  • "Watstein said Greenberg's effort to dump SMR in order to take on TitleMax as a client violates the 'hot potato doctrine,' which bars any effort to avoid a conflict of interest by dropping one client to take on a more lucrative one."

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