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January 31st, 2012
The US District Court for the District of Massachusetts clarified appropriate content for a motion to dismiss in Cold Spring Harbor Laboratory v. Ropes & Gray, LLC. Plaintiff Cold Spring Harbor Laboratory (CSHL), a biomedical research institution, filed suit against Ropes & Gray (R&G) and former R&G attorney Michael Vincent, alleging legal malpractice in executing patent applications. CSHL alleged Vincent copied material verbatim from prior patent applications of a competitor to describe CSHL inventions. The Patent and Trademark Office subsequently rejected CSHL’s pending claims for similarities with the copied application.
CSHL met with R&G and Vincent upon learning of the copying. R&G refused to assist CSHL in bringing the copying to the Patent and Trademark Office’s attention unless CSHL signed a waiver releasing R&G from any potential liability. CSHL refused, and filed claims of legal malpractice, breach of fiduciary duty, fraud and fraudulent concealment and negligence. The defendants moved to dismiss pursuant to Rule 12(b)(6).
R&G argued Vincent’s conduct did not breach the duty of care offered that copying is an accepted practice in patent application, citing to a book titled “Patent it Yourself.” The Court described R&G’s citation to a popular how-to reference book to support its causation argument as “dubious at best, and at worst, an insult to the professional standards of the patent bar.”
Defendants’ other explanations and arguments did not fare much better. In denying the motion, the Court explained “factual arguments regarding the extent to which the alleged malpractice was the but-for cause of delays and denials by the PTO are improper on a Rule 12(b)(6) motion to dismiss.” The Court emphasized proximate cause is a question of fact for proof at trial, and not a proper basis for a motion to dismiss.
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December 12th, 2011
The American Bar Association Standing Committee on Ethics and Professional Responsibility recently issued an opinion offering “that, without violating [Model] Rules 4.2 or 8.4(a), a lawyer may give substantial assistance to a client regarding a substantive communication with a represented adversary.”
ABA Model Rule 4.2 (mirrored in Rule 4.2 of both the New Hampshire and Massachusetts Rules of Professional Conduct) prohibits a lawyer from communication about subjects regarding a client’s representation with a person the lawyer knows to be represented by counsel in the matter. An exception applies where the lawyer has the consent of the person’s attorney or is authorized to communicate with the person by law or court order. Model Rule 8.4(a) prohibits a lawyer from violating the rules through the acts of another.
Substantial assistance may include reviewing and redrafting a letter by the client intended for communication with the adversary, or suggesting direct communication to reach agreements or settlement. The Committee cautions, however, against overreaching by the lawyer. Examples of overreaching include assisting the client in securing an enforceable obligation, admission against interest or confidential information from the represented party.
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November 21st, 2011
The United States District Court for the Northern District of New York found unconstitutional a state Judiciary Law provision requiring that nonresident attorneys maintain an in-state law office to practice law in New York.
New York’s Judiciary Law Section 470 (“Section 470”) requires all attorneys who appear before New York courts to maintaining an office in New York. A Princeton, New Jersey attorney licensed to practice in New Jersey, New York and California challenged Section 470 under the Privileges and Immunities Clause of the U.S. Constitution. The Court found that Section 470 infringes on the right to practice law in New York on the basis of residency, by imposing additional threshold costs on nonresident attorneys wishing to practice in the state. The defendants, which included a number of state and judicial officers and agencies, argued that the state had a substantial interest advanced by the provision, such as facilitating in-state service of process and communications. The Court rejected this argument and declared Section 470 unconstitutional.
Tags: constitutional law, New York Law, residency requirement
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October 31st, 2011
The UK began this month to allow groups other than lawyers to own and control law practices, and it’s possible the U.S. could follow suit.
Current rules of professional conduct dictate that non-lawyers may share legal fees only under narrow circumstances. The professional conduct rules also prohibit lawyers from forming partnerships to practice law with non-lawyers, and that lawyers shall not practice law in for-profit corporations if non-lawyers act as owners, directors or officers. The purpose of these rules is to protect the independent professional judgment of lawyers in rendering legal services.
According to an article published in the October 28, 2011 edition of the New York Times, the ABA Ethics 20/20 Commission is expected shortly to propose an amendment to Rule 5.4 that would permit other professional service providers, such as accountants, economists, and social workers, to partner with lawyers and own up to 25% of law firms.
Proponents of the move believe it could result in more accessible and affordable legal services, and would provide law firms access to capital required to invest in technology. Opponents worry that nonlawyer professionals may not adhere to the same ethical rules imposed upon attorneys, and that the attorney-client privilege could be compromised.
The potential outcomes of such a development are varied. Some experts argue that few firms will take advantage of such an arrangement, and those will mostly be small firms with less access to capital. Others suggest that legal services could soon be offered by chain establishments or in retail stores.
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Tags: law firms, law news, legal ethics, legal services, professional conduct
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October 31st, 2011
In its first case involving legal blogging, the Virginia State Bar ruled that Richmond attorney Horace Hunter must add a disclaimer to his blog clarifying that is advertising. Attorney Hunter argued that his blog, which included information about cases he’s worked on and criminal justice issues, is protected under the First Amendment as news and commentary. The State Bar ruled against him, finding that his blog violated attorney advertising rules because it did not “put case results in a context that is not misleading.” The bar also ordered Attorney Hunter to remove information about clients, even though he claims he obtained consent before posting information about their cases.
Tags: advertising, blog, disclaimer, law blog, legal ethics, rules of professional conduct, virginia bar
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October 6th, 2011
The New Hampshire Supreme Court recently held that a jury could apportion fault to a plaintiff’s non-party immune employer in a personal injury case, and that the fault of the named defendant and the immune employer should be aggregated for purpose of determining whether the plaintiff was entitled to some recovery.
Plaintiff Alfred Ocasio was severely injured while working for the United States Postal Service (USPS). Ocasio received approximately $80,000 under the Federal Employees’ Compensation Act, which barred him from suing the USPS, and provided that the USPS was entitled to be made whole from any sums he obtained from other tortfeasors.
Ocasio then sued FedEx. He filed a motion in limine to preclude the jury from apportioning fault to the USPS, as any recovery would already be reduced by the amount of his workers’ compensation. He argued that he was unfairly subject to a double reduction – first on account of the workers’ compensation bar, and again on account of the allocation of fault permitted under the DeBenedetto case.
The trial court (Barry, J.) denied the motion and required the jury to consider whether the USPS was legally at fault to any degree. The jury found Ocasio 6% at fault, FedEx 4% percent at fault, and the USPS ninety percent at fault. The jury determined Ocasio’s damages to be approximately $1.5 million but, because his percentage of fault was greater than FedEx’s, the trial court ruled he was entitled to no recovery.
The Court held that there is no relationship between the workers’ compensation bar and the application of DeBenedetto to produce the “double reduction” the plaintiff asserted. The Court noted that the legislature had considered, and rejected, changes to the New Hampshire comparative fault statutes that would have produced the result the plaintiff sought. The Court held that its rejection of the ”double reduction” argument negated the plaintiff’s claims that the application of DeBenedetto in the context of his claim violated due process or equal protection.
The Court reversed, however, the trial court’s determination that the Plaintiff was entitled to no recovery. The Court held that the fault of both the USPS and FedEx should be aggregated to determine whether the plaintiff was entitled to recover. As the plaintiff’s comparative fault was less than the aggregate fault of the USPS and FedEx, the plaintiff was entitled to recover 4% of the jury’s award, plus interest and taxable costs.
Retired Chief Justice Brock wrote a forceful dissenting opinion arguing that DeBenedetto violated substantive due process and should be reversed.
The opinion may be viewed at http://www.courts.state.nh.us/supreme/opinions/2011/2011096ocasio.pdf
Tags: Aggregate fault, Allocation of Fault, DeBenedetto, Nonparty Liability, professional liability, Workers' Compensation
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September 21st, 2011
The New Hampshire Supreme Court held that the spouse of an attorney stated claims for fraudulent misrepresentation, negligent infliction of emotional distress, and respondeat superior liability against a lawyer and law firm that allegedly induced her to sign a settlement agreement on promises to forego reporting her husband for criminal prosecution and professional discipline.
The full text of the opinion may be found at: http://www.courts.state.nh.us/supreme/opinions/2011/2011084tessier.pdf
Tags: new hampshire supreme court, professional liability
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June 17th, 2011
The Kentucky Bar Association recently voted to disbar “legend” Stanley Chesley of Cincinnati, who rose to fame after representing the families of those who died in the 1977 Beverly Supper Club Fire in Southgate, Kentucky. Chesley was investigated by the bar for violating nine ethics rules in connection with a $200 million settlement with the company that made the diet drug Fen-phen.
Chesley was accused of urging the judge to alter the existing fee arrangement, and boost the attorneys’ fees to 49% of the overall settlement, without informing the clients of the new arrangement. The judge who approved the settlement later resigned and testified that he would not have approved of the arrangement had he known there was a previous lower fee agreement. The investigating commissioner found Chesley’s acts “shocking and reprehensible” and recommended that Chesley both lose his license and be forced to return $7.6 million of the $20 million fee he took from the settlement.
Click here for a full article from the Wall Street Journal on this matter.
Tags: Disbarred, Stanley Chesley, Beverly Supper Club Fire, Unreasonable Fees.
Tags: Beverly Supper Club Fire, Disbarred, Stanley Chesley, Unreasonable Fees
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May 27th, 2011
The Massachusetts Supreme Judicial Court recently approved the adoption of a pilot program requiring the filing of a docket statement for all cases appealed or cross-appealed to the Massachusetts Appeals Court. Each docket statement must include a short statement of the anticipated issue on appeal, but failure to include such a description will not preclude the party from raising the issue in its brief. All docketing statements must be filed within 14 days after the Massachusetts Appeals Court enters a Notice of Entry in the case. The pilot program is currently scheduled to run for 6 months starting on June 1, 2011.
Tags: Docketing Statement, Massachusetts Appeals Court, Massachusetts Supreme Judicial Court
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May 23rd, 2011
Willful Blindness Insufficient to Establish ‘Aiding and Abetting’ Liability of a Law Firm
The Massachusetts Court of Appeals recently held that a law firm may only be held liable for aiding and abetting the wrongdoing of a partner if the firm has actual knowledge of that wrongdoing.
In Go Best Assets Ltd v. Citizens Bank of Massachusetts, a former client sued a law firm for aiding and abetting an alleged Ponzi scheme. The alleged acts were committed by a former, now disbarred, partner. The plaintiff produced evidence that the partner was allowed to maintain his own client trust account, and these accounts were not subject to the same oversight procedures as the rest of the firm’s accounts. Additionally, at one point the partner withdrew $200,000 from the firm’s IOLTA account without following the firm’s protocol or indicating the reason for the withdrawal, or the money’s destination.
The Court held that, despite the evidence produced, the firm could not be held liable for aiding and abetting the partner. Aiding and abetting liability in the civil context requires actual knowledge by the defendant of the principal’s wrongdoing. Willful blindness, or a conscious course of deliberate ignorance, will not alone demonstrate knowledge. Accordingly, the Court found that the mere inference of knowledge that the partner had once misappropriated funds from the firm’s IOLTA account was not sufficient to establish actual knowledge of a pattern of overdrafts, such that the partnership could be deemed aware of the partner’s fraudulent scheme.
Tags: Aiding and Abetting Liability, Go Best Assets Ltd v. Citizens Bank, IOLTA Account, Willful Blindness
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