Thursday, August 20, 2015

Risk News: Threats & Waivers Edition



A few interesting updates to share. First, from Hinshaw: "Future Conflict Waiver Allows Firm to Representation Adverse to Former Client" [GEM Holdco, LLC v. Changing World Technologies, L.P., 46 Misc. 3d 1207(A), 7 N.Y.S.3d 242 (Sup. Ct. New York County Jan. 9, 2015), aff'd, 2015 WL 4112529 (1st Dep't 2015)] --
  • "A law firm represented two sets of codefendants who later became adversaries; the firm then continued to represent one of the sets of defendants against the former clients. The New York Supreme Court, Appellate Division, First Department, held that because the defendants had specifically waived any conflicts that might arise from the joint defense arrangement, the firm would not be disqualified from its representation of the defendants."
  • "Accordingly, Danzik signed a "retainer letter" with Schalm Stone. The letter expressly contemplated future conflicts between the CWT Defendants and the Ridgeline Defendants."
  • "New York courts have recognized that where a valid waiver exists, the traditional concerns about confidential information are inapposite. The Ridgeline Defendants argued that the confidential information shared with an attorney in a joint representation inherently gives rise to the unfair advantages that Rule 1.9 seeks to prohibit, and warranted disqualification. But the court concluded that if the transmission of confidential information vitiated the validity of a conflict waiver notwithstanding the retainer letter's disclaimers to the contrary, virtually all conflict waivers would be ineffectual."
  • "The court upheld the waiver of future conflicts of interest, and allowed the continued representation of one client against the former client, even if information obtained during the joint representation from the former client could result in an advantage for the continuing client."
And then from Karen Rubin at Thomson Hine's blog comes an update (it might be a shame not to read, if some sort of accident should happen, that is...): "Threat to file disciplinary complaint can backfire" --
  • "We’ve all been there. Opposing counsel has acted like a jerk throughout your case.  But now, counsel has crossed the line with conduct that you think is not merely uncooperative or dilatory, but also unethical."
  • "Thinking of telling your opponent that you’re going to file a complaint with disciplinary authorities about that unethical conduct?  You should probably take some deep breaths and think again about that threat.  As a recent ethics opinion from the Association of the Bar of the City of New York (ABCNY) points out, making that threat may be unethical conduct on your part, if:
    • 'you are ethically required to actually report another lawyer’s misconduct, and you instead, threaten a disciplinary complaint to gain some advantage or concession from the lawyer; or'
    • 'you lack a good faith belief that the other lawyer is engaged in conduct that has violated or will violate an ethical rule; or'
    • 'your threat of disciplinary charges has no substantial purpose other than to embarrass or harm; or'
    • 'your threat of disciplinary charges violates other substantive laws, such as criminal statutes that prohibit extortion.'

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