Tuesday, August 8, 2017

Risk News: Alleged, Costly Conflicts

"Hollywood Docket: 'Straight Outta Compton'" --
  • "A federal judge is allowing Greenberg Traurig to continue to represent Universal in former N.W.A manager Jerry Heller's defamation lawsuit over Straight Outta Compton."
    "After Heller died last year, his heirs brought a motion to disqualify Greenberg Traurig because one of its partners, Joel Katz, once advised Heller upon the release of Ice Cube's 'No Vaseline.'"
  • "Greenberg Traurig responded that any conversation by a transactional attorney a quarter century ago was not substantially related to Heller's claims of being defamed by the N.W.A biopic. The law firm further argued that nothing exchanged was confidential, that the disqualification motion came after substantial delay and that Greenberg Traurig had implemented an ethics wall to ensure that Katz would be screened from the ongoing litigation."
"Morgan Lewis Facing $30M Client Conflict Suit In Pa. Court" --
  • "An ex-Morgan Lewis & Bockius LLP client filed suit in Pennsylvania state court on Friday to disgorge some $30 million in fees it paid to the firm while attorneys allegedly worked against its interests and helped build a case against it on behalf of a Wisconsin-based hospital system."
  • "Towers Watson Delaware Inc. alleges that Morgan Lewis, after having represented the company for at least a year, agreed to defend Meriter Health Services Inc. in a class action over an allegedly flawed retirement plan Towers Watson’s predecessor company had designed, and went on to assist a second firm in putting together an eventual lawsuit against the company over the plan."
  • "Despite prior retainer agreements with Towers and its predecessor, Towers Perrin, requiring it to be informed of any potential conflicts between its interests and the interests of other Morgan Lewis clients, the company said it was never informed of the situation."
  • "On top of simply representing Meriter in the class action, the complaint said that Morgan Lewis actively assisted a second law firm, unidentified in the complaint, that Meriter brought on board to pursue potential third-party claims against Towers over purported deficiencies in the retirement plan at issue in the litigation."
  • "While the complaint pointed to emails from Morgan Lewis attorneys saying they could not comment or participate on any issues related to Towers, the company said that the attorneys 'regularly communicated with Meriter and [the second firm] to develop Meriter’s claims against Towers.'"
  • "Both an attorney for Towers Watson and a representative for Morgan Lewis declined to comment on the case when contacted on Monday."
"Reed Smith Battles Rival Firms Over Fees, Conflicts in SAC Capital Case" --
  • "Two plaintiffs firms are urging New York judges to deny Reed Smith's claim to $6.75 million in attorney fees for its work as co-counsel in a securities class action, claiming the traditionally defense-side firm misled them in stating it was free from conflicts."
  • "Wohl & Fruchter, a four-attorney firm that was class counsel with Pomerantz, contends Reed Smith should not be allowed any portion of a $27 million attorney fee award obtained in May in the class action against SAC Capital Advisors and other defendants."
  • "The fee dispute became heated in June when Reed Smith filed a lawsuit in Manhattan Supreme Court against Wohl & Fruchter and name partner Ethan Wohl, alleging tortious inference with a contract and unjust enrichment."
  • "Reed Smith claims that Wohl & Fruchter, when looking for co-counsel, realized that it was a small firm 'overmatched by the resources available to the SAC defendants,' represented by Paul, Weiss, Rifkind, Wharton & Garrison, Willkie Farr & Gallagher, Goodwin Procter and Bracewell."
  • "But Reed Smith asserts that when counsel for the SAC defendants at Paul Weiss mused about a possible conflict involving Reed Smith before Southern District Judge John Koeltl, the Wohl firm saw an opportunity to eliminate Reed Smith. '[Wohl] intentionally exploited Paul Weiss' statements in order to malign Reed Smith and to induce the lead plaintiffs to terminate the engagement agreement,' Reed Smith said. Wohl and his firm deliberately blocked and excluded Reed Smith from any interactions with the lead plaintiffs or opposing counsel in the SAC case, Reed Smith claims."
  • "But class counsel said McCarroll did not disclose that Reed Smith 'had in fact been aware for several months that a litigation associate,' Andrew Pfau, has previously represented the SAC defendants in a related government investigation."

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