Sunday, March 5, 2017

Conflicts Corrected, Conflicts Protested, Conflicts Clearance is Requested

Here's an update to a long running story we and others have had an eye on for several years: "Covington Pays to End 3M Conflicts Row. The deal puts an end to an unusually high-profile clash between a Fortune 100 client and its onetime law firm." --
  • "Ending a long-running conflict of interest dispute, Covington & Burling has agreed to settle claims that it betrayed its obligations to onetime client 3M Co...The unusual clash between a Fortune 100 company and its well-known former law firm had drawn attention from specialty law publications and legal ethics blogs, as well as more mainstream outlets such as the Minnesota Star Tribune and The Washington Post."
  • "Lead 3M lawyer William Brewer III of Brewer, Attorneys & Counselors said in a statement that Covington or the firm's insurer would provide some sort of payment to 3M as part of the settlement. Further details were not publicly available."
  • "The dispute began taking shape in 2010, when Covington, representing Minnesota on a contingency basis, sued 3M for allegedly polluting state waterways by its handling of fluorochemicals once used in such products as 3M's Scotchgard stain repellant."
  • "More than a year later, 3M's lawyers sought to have Covington disqualified from the case. The company maintained that in the years before the 2010 water pollution suit, Covington had advised 3M on regulatory issues related to fluorochemicals. Lawyers for 3M later filed a separate lawsuit, accusing Covington of 'side-switching' and breaching the firm's contractual and fiduciary duties to the company."
  • "Following multiple rulings and appeals, a Minnesota state judge determined in February 2016 that Covington could continue representing the state in the environmental suit. But the judge also found that Covington had violated its ethical duty to 3M."
Next an update to an item we noted last month: "Holland & Knight Protests DQ Bid To Judge’s ‘Dismay’" --
  • "A New York federal judge scolded Holland & Knight LLP for a letter it submitted in a case pitting First NBC Bank against ethanol distributor Murex LLC, saying the unsolicited filing contesting a bid to disqualify the firm did not reflect well on it and that its attorneys had 'abused the court's courtesy.'"
  • " Given that the current case is one of first impression, the letter goes on to say, 'there is ample risk that Murex's motion [to disqualify Holland & Knight] and the circumstances giving rise to it are tactically motivated.' Murex contends that Holland & Knight used confidential information obtained from consulting work performed by one of the firm's senior policy advisors to achieve an unfair advantage in a suit brought by FNBC."
  • "The judge told the firm at a Feb. 13 hearing that he found it likely that Holland & Knight had represented both sides. However, he said he would give the firm and its client some time to decide their next move. He was "not inviting substantive briefing" on the matter, but asked them to inform him of their "bottom-line determination.""
  • "On Tuesday, Judge Engelmayer said the firm abused the courtesy he had extended, and that he was "constrained to express dismay" at the tactic. 'While the court appreciates the strength of counsel’s views on the pending disqualification motion, HK’s resort to such a fait accompli, in support of its own self-interest, does not reflect well on the firm,' Judge Engelmayer said."

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