Irell & Manella settles $150M claim alleging malpractice
February 12, 2009
LOS ANGELES – Irell & Manella has settled a $150 million legal malpractice lawsuit with one of its largest clients, Charter Communications Inc., according to a Feb. 10 filing in the case.
The settlement was reached following two months of mediation, according to court documents. Charter Communications Inc. v. Irell & Manella LLP, No. 07-cv-00402 (C.D. Calif.). No details of the settlement, including the dollar amount, were provided.
Irell, based in Los Angeles, had represented Charter and its chairman, Paul Allen, while both were looking to acquire cable systems to build a nationwide cable television company. In 2000, while working on an acquisition dubbed "the Bresnan Transaction," an unnamed Irell associate deleted two important paragraphs of the contract, giving Allen an unintended type of stock. No one noticed the mistake until 2002, after which Charter was forced to negotiate with Allen over millions of dollars to rectify the deal.
Charter then sued Irell for legal malpractice, breach of fiduciary duty, breach of contract and other claims.
In October, U.S. District Judge Andrew Guilford, of the Central District of California, refused to grant Irell's motion to dismiss the suit. The firm had argued that it could not mount a full defense without revealing privileged information relating to Allen, who is not a party to the suit. Guilford, while acknowledging California's case law stating law firms could dismiss claims that forced them to reveal information that is privileged under an attorney-client relationship, was not convinced that Irell could not mount a defense without certain accommodations, such as sealing and protective orders.
Charter's attorney, Glen E. Summers, a partner in the Denver office of Chicago's Bartlit Beck Herman Palenchar & Scott, confirmed that the parties had settled but declined to give details.
"As you know, this was a very troubling case for Irell, and I'm sure they're pleased to have it behind them," he said.
Irell's attorney, Paul G. Gaffney, a partner at Washington's Williams & Connolly, declined to comment.
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