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Morgan Lewis & Bockius vowed to “vigorously” defend itself against two businessmen who sued the firm for legal malpractice and conflict of interest, calling the allegations that the firm gave erroneous legal advice about their company’s trade with Cuba “grossly inaccurate” and “meritless.” The plaintiffs, brothers Stefan & Don Brodie, claim in the suit filed in Philadelphia Common Pleas Court late Wednesday afternoon that they were criminally prosecuted for following the firm’s advice that their company, Bro-Tech Corp., was free to trade with Cuba despite the American embargo on such actions. It also alleged that Assistant U.S. Attorney Kristin Hayes, wife of Morgan Lewis managing partner of operations Thomas Sharbaugh, volunteered to participate in the prosecution despite an appearance of conflict of interest. Plaintiff attorneys are Clifford Haines of Haines & Associates and Marc Kasowitz and Aaron Marks of Kasowitz Benson Torres & Friedman. Morgan Lewis announced that Conrad O’Brien Gellman & Rohn would be representing the firm. Morgan Lewis officials were particularly riled by accusations levied against Edward Dennis, who retired as a partner in the white-collar criminal defense practice group in 2002 after a distinguished career. The suit claims that even after the U.S. Customs Service launched an investigation in 1997 into the company’s trade with Cuba, Dennis reiterated earlier advice from other Morgan Lewis attorneys that the Foreign Sovereign Compulsion Doctrine — which provides that conduct compelled by a foreign country is immune from liability in the U.S. in certain circumstances — would be a viable defense to any charges that the company violated Cuban embargo violations and would apply to future transactions as well. The suit states that Dennis went on to advise the Brodies that not only was trading with Cuba through the use of the company’s foreign subsidiaries legal and proper, it could not be stopped so as to not violate the laws of the countries where the subsidiaries are based. The complaint states that Dennis knew or should have known that the doctrine would not protect the Brodies from prosecution because his partner at the time, Joseph Griffin, wrote an article on that subject that surmised that true compulsion, such as a specific threat of sanctions, by a foreign government is required for the doctrine to be applicable. The complaint also stated that article said that the U.S. Department of Justice historically has taken a “wary stance” with regard to the doctrine, seeking to limit its application. Morgan Lewis, though, defended the firm’s advice and Dennis in its brief statement to the media Thursday. “The advice given to our former client throughout our representation, the substance of which is misrepresented in the complaint, was correct in all respects,” Morgan Lewis officials said in a statement released Thursday afternoon. “The accusations against our former partner, Ed Dennis, are particularly offensive and unfounded. Mr. Dennis has been for many years a substantial contributor to the bar and the Philadelphia community, a pioneer among African-American lawyers, and one of the most respected criminal lawyers in the nation. His representation of our former client was outstanding.” The Brodie brothers’ firm, which traded as the Purolite Co., makes resins used in water purification. They were prosecuted and convicted in 2002 in U.S. District Court in Philadelphia for violating an American trade embargo with Cuba that dates to the early 1960s. After the jury verdict, Judge Mary A. McLaughlin reversed the conviction of Stefan Brodie, Bro-Tech’s chief executive officer, saying there was not enough evidence to prove he conspired to violate the embargo. And just last year, McLaughlin ordered a new trial for Don Brodie, Bro-Tech’s executive vice president, saying prosecutors made improper comments to the jury. A second trial has not been held, though the Brodies claim to have spent more than $8 million on their defense. The suit said that problems began in 1993 in response to an audit of Bro-Tech by Deloitte & Touche, in which concerns were raised about a British branch of the company, Purolite International, carrying on trade with Cuba. When Stefan Brodie sought advice from Morgan Lewis about whether the company should cut off trade with Cuba, Morgan Lewis partner Joseph Griffin “counseled Brodie against directing the company’s foreign affiliates to discontinue Cuban trade, reasoning that the United Kingdom and Canada had enacted ‘blocking statutes’ that purportedly prohibited discontinuing trade with Cuba based on another country’s embargo,” according to the complaint. “Griffin further advised Brodie that since there was no intent by any United States person at Purolite to break the United States blockade, there had been no violation of U.S. law. Griffin further advised Brodie that future transactions with Cuba should be conducted with ‘no U.S. involvement,’ meaning that no United States citizen was to be involved, no United States raw materials were to be used in the manufacture and no United States-owned transportation was to be used.” From 1993 to 1997, the suit claims that the company followed this policy, which it formally implemented at the advice of Griffin — who no longer works at the firm. After following the advice of Morgan Lewis attorneys such as Griffin and Dennis, the Brodies were indicted in October 2000 and tried to have the case dismissed on the basis of the aforementioned doctrine. But McLaughlin denied that motion and that defense strategy at trial, claiming that there was no proof of actual compulsion by a foreign government to trade with Cuba — a necessary element to invoke the defense, according to the complaint. In addition to claiming that Morgan Lewis did not do proper research concerning the doctrine, the Brodies allege that there was a conflict of interest with Hayes working on the prosecution team despite being married to Sharbaugh, whose responsibilities include overseeing client billing matters. The complaint says that Hayes contacted Morgan Lewis after volunteering for the case to inquire as to whether her role would pose a conflict. The complaint says that Sharbaugh made initial inquiries and business and finance department chairman Howard Shecter asked Stefan Brodie about the subject. Brodie expressed his objection but the complaint says that Sharbaugh communicated to Hayes that the firm would not seek to have her disqualified from the case. “In refusing to object to Sharbaugh’s wife’s participation in the case, [Morgan Lewis] acted in blatant disregard of and contrary to plaintiffs’ best interests and stated objections,” the complaint states. The complaint alleges that Morgan Lewis violated attorney-client privilege (Section 1.6 of the Pennsylvania Model Rules of Professional Conduct). Fox Rothschild partner Scott Vernick, who has expertise in legal ethics, said that in cases with a fact pattern such as this, plaintiffs either argue a violation of Rule 1.6 or Rule 1.7b, which deals with material limitations on a lawyer’s ability to proceed on a case. The Brodies terminated Morgan Lewis several days before the criminal trial began in 2002. The complaint accuses Morgan Lewis of legal malpractice, breach of fiduciary duties and breach of contract.

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