The Am Law Daily found plenty of fodder when compiling our latest round-up of litigation involving law firms as either plaintiffs or defendants.
Some of the cases have already earned coverage in one of our many sibling publications, including King & Spalding being sued in California state court by an expert witness who claims the firm blamed a bankrupt former client for its failure to pay invoices related to a massive International Trade Commission case; the actor who played a childhood bully in “A Christmas Story” suing McCarter & English over royalties from a calendar based on the movie; a malpractice complaint against SNR Denton in Los Angeles federal court over an allegedly botched Securities and Exchange Commission filing; and HSBC Bank’s allegations in New York state court that it lost $75 million to a now-imprisoned investment banker because Troutman Sanders failed to properly investigate a loan transaction that led to the theft.
Meanwhile, a host of other firms have gone on the offensive, suing former clients over what, in some instances, are allegedly unpaid bills of relatively modest amounts. Cozen O’Connor, for instance, filed a complaint in New York state court seeking to enforce a $66,815 arbitration award related to fees it is owed by Hamiltonian Corporation. Elsewhere, DLA Piper sued former client David Thurman in Los Angeles state court over $189,372 in bills dating back to 2010 that the firm claims have not been paid; Epstein Becker & Green sued Heritage Management Company, which it represented in trademark and corporate matters, in New York state court over $67,000 in allegedly unpaid bills; Kasowitz Benson Torres & Friedman filed a complaint, also in New York state court, seeking $241,804 it claims it is owed for its work on behalf of a bankrupt Chicago shopping center owner; Quinn Emanuel Urquhart & Sullivan sued Yoshio Nakano and his company, the International Poker Players Association, in state court in Los Angeles over $14,670 in allegedly unpaid bills stemming from trademark-related work; and Wilson, Elser, Moskowitz, Edelman & Dicker sued former client Neighborhood Solutions, also in Los Angeles state court, to recover what it claims are unpaid bills totaling $56,419.
On a somewhat larger scale, Law360 reports, Gordon & Rees has sued aquatic conservatory Ocean Embassy in Florida over $577,161 the firm says it is owed by its former client.
Finally, as sibling publication The Recorder has reported, Pillsbury Winthrop Shaw Pittman and Orrick, Herrington & Sutcliffe are among the law firms to file suit against the City of San Francisco over what the plaintiffs have alleged are unfair voter-approved payroll taxes on partner profits.
Other law firms to find themselves tangled in litigation lately include:
Allen Matkins Leck Gamble Mallory & Natsis: More than a dozen plaintiffs that invested in a batch of Southern California real estate holdings sued Allen Matkins on August 15 in Los Angeles state court over the firm’s alleged failure to structure a real estate sale so that the investors would not have to pay capital gains taxes. The plaintiffs—a group that included Marina Del Rey Country Club Apartments, Oakwood LaSalle, and JMKP Property—say they hired the firm and its lawyers because they “[hold] themselves out as experts in structuring tax efficient real estate transactions.” The suit claims breach of fiduciary duty and professional negligence. A spokesman for Allen Matkins said the firm does not comment on pending litigation.
Alston & Bird: A construction company that says it was denied a $1.4 million fee it earned for its work renovating a Hermosa Beach, California, shopping mall sued Alston and two of its partners September 5 in Los Angeles state court. Howard S. Wright Construction, which accuses the defendants of breach of contract and professional negligence, claims the firm’s incompetence contributed to the fee not being paid. Alston and its lawyers, the plaintiff argues, could have done more to collect on a mechanic’s lien against the now-bankrupt owner of the California mall in question, Shook Development Corporation. The company’s suit seeks $2.2 million in damages, as well as the return of $1.5 million in legal fees the builder has paid since the engagement began in 2005. (Howard S. Wright originally hired Weston Benshoof Rochefort Rubalcava & MacCuish, which merged with Alston in 2008.) In a statement, Alston said, “The firm and its lawyers deny liability on the claims in the suit and intend to defend those claims vigorously.”
Barnes & Thornburg: Dozens of investors in a group of troubled investment funds that are the subject of a lawsuit and ongoing investigation brought by the Securities and Exchange Commission have sued Barnes & Thornburg and Chicago partner Leslie Weiss, who was named court-appointed receiver of the so-called Nutmeg funds in August 2009. The suit, filed in Illinois federal court on September 14, includes claims of breach of fiduciary duty, legal malpractice, and negligence against the firm, Weiss, and the Nutmeg funds. In their 131-page complaint, the plaintiffs claim the funds—which held mostly what are known as private investment in public equity assets—saw their total value plummet from $13.3 million in 2009 (before the SEC sued the funds for fraud) to just a few thousand dollars today. The complaint blames the losses in part on Weiss, whom the plaintiffs allege is “decidedly unqualified” to oversee the funds. The complaint says Barnes has made $500,000 so far on the engagement. In a statement, Barnes’s deputy general counsel Donald Lundberg said, “The claims are meritless, and we will vigorously assert a strong defense in response to the complaint.”
Cleary Gottlieb Steen & Hamilton: Construction at Cleary’s headquarters office at One Liberty Plaza in lower Manhattan is at the heart of two personal injury lawsuits filed in New York state court that name the firm as a defendant. Both of the actions were brought by individuals who claim they were hurt while working at the site. The first complaint, filed July 2 by George Latorre and his wife, claims substandard safety conditions caused Latorre to fall off a ladder while working on the building’s 39th floor. Latorre and his wife say the accident left him with “severe and permanent personal injuries” that required surgery and have impaired his ability to earn a living. In the second suit, which was filed August 15 and amended a week later, John McEvoy alleges that he suffered “serious and severe injuries” while doing electrical work at the Cleary offices when he slipped on “dirt, debris, loose pencil rods, and door bucks.” In addition to the firm, both suits also name the general contractor and others involved in the construction as defendants. In a court filing made in response to Latorre’s suit, Cleary denies the allegations and demands that the plaintiff produce detailed information about his alleged injuries. A spokeswoman for Cleary had no comment.
Edwards Wildman Palmer: Reuters has recently reported on two suits involving the firm. In late August, a New York state court judge ruled that a claim brought by former partner Stephen Connoni that he was improperly fired can proceed to trial. At the same time, the judge decided that Connoni has no grounds to claim he should be paid $625,000 allegedly promised to him when he joined the firm. The guarantee depended on Connoni bringing in roughly $1.9 million in new business in 2008, which the judge said in the ruling he failed to do. Separately, a class action against Edwards Wildman and its client John Hancock Life Insurance Company will proceed following a Cincinnati federal appeals court’s September 19 decision. The the firm and the insurer are accused of racketeering under the Racketeer Influenced and Corrupt Organization Act for their alleged role in marketing a tax shelter. Edwards Wildman spokesman John Tuerck told Reuters the firm looks “forward to the opportunity to show in the district court that there is no basis for the plaintiffs’ claims against the firm.”
Haynes and Boone: A four-week trial in a negligence suit brought against Haynes and Boone in Texas state court by former firm client RX.com ended in a confidential settlement September 10, sibling publication Texas Lawyer reports. Austin-based RX.com sued Haynes and Boone and partner Patrick Hughes over what the company claimed was the firm’s failure to file antitrust suits on its behalf in 2003 and 2004 before certain statutes of limitations expired. In a statement given to Texas Lawyer, Haynes and Boone general counsel and partner Stacy Brainin said they are pleased that the two sides decided it was “in their respective best interests” to settle the dispute.
Holland & Knight: Florida-based firm Holland & Knight agreed to pay $25 million to settle claims that it committed malpractice and aided in a Ponzi scheme perpetuated by now-deceased Arthur Nadel, sibling publication Daily Business Review reported August 30. The settlement, which is awaiting final approval, would resolve three years of litigation in Florida state court initiated by investors in Nadel’s corrupt hedge fund, according to DBR. The firm represented Nadel from 2002 until his business collapsed in 2009. In a statement given to DBR, Holland & Knight general counsel and partner Michael Chapman said the settlement represents a compromise made in part because of “the substantial costs and investment of firm resources required to continue the litigation involving the funds.”
Morgan, Lewis & Bockius: A former technology consultant found guilty of conspiracy and securities fraud has decided to blame her court-appointed attorney from Morgan Lewis, among others, for her conviction, The Wall Street Journal reported. Winifred Jiau, who was sentenced in 2011 to four years in prison, filed a motion in New York federal court September 18 asking a judge to vacate her sentence because of what she claims was wrongdoing by Morgan Lewis partner Joanna Hendon, the prosecutors, and the judge. Jiau’s 58-page motion, filed pro se, alleges that Morgan Lewis’s representation of a hedge fund in the Galleon insider trading investigation created a conflict and “resulted in a serious investigation oversight in this case.” Jiau also contends that Hendon ignored her request to seek a settlement. A Morgan Lewis spokeswoman said in a statement provided to the Journal that the allegations are “categorically false,” that “the decision to proceed to trial was Ms. Jiau’s,” and that Morgan Lewis was publicly recognized by federal prosecutors as providing the “Cadillac” of defenses in the case.
Ropes & Gray: Ropes has succeeded in keeping confidential certain filings made in a year-old discrimination lawsuit brought by former associate John Ray III, who alleges he was treated as a “token black associate” and discriminated and retaliated against while at the firm because of his race. Both sides agreed in mid-September that the firm can file under seal its responses to new allegations raised by Ray. Sibling publication The National Law Journal reported in August that a judge had decided to allow Ray to add claims of defamation and invasion of privacy to his suit based on what the former Ropes attorney alleges was a leak of confidential Equal Employment Opportunity Commission documents to legal blog Above the Law. Ropes’s lawyers at Foley Hoag have so far received approval to file under seal a motion “for a Protective Order Regarding Testimony of Irrelevant Consensual Romantic and Sexual Relationships and exhibits,” a motion to dismiss several counts asserted by Ray, and other documents following a judge’s August 1 order outlining what kinds of documents can be deemed “confidential” and “for attorneys’ eyes only.”
Stroock & Stroock & Lavan: On Wednesday, the Daily Journal reports, a Los Angeles judge dismissed a $100 million lawsuit brought against Stroock and the law firm Levene, Neale, Bender, Yoo & Brill by film financier David Bergstein. The two firms had filed a motion to dismiss under California’s anti-SLAPP statute, arguing that Bergstein had sued them for filing lawsuits, an act that should be protected by the First Amendment. Bergstein tried to blame the law firms for helping push his company into bankruptcy. Lawyers for Bergstein told the Daily Journal they plan to appeal the decision.