The California Supreme Court on Thursday found that a waiver Sheppard, Mullin, Richter & Hampton client J-M Manufacturing signed was not effective because the firm failed to disclose a known conflict with a current client.

The company, a PVC pipe manufacturer, refused to pay Sheppard Mullin over $1 million in legal fees in a whistleblower case after it came to light that the firm also represented a plaintiff in that action—albeit in unrelated employment matters—and that the firm failed to disclose it. Sheppard Mullin was forced to step aside from the litigation after the former client, the city of South Tahoe, raised the issue with the court.

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