Photo: Diego M. Radzinschi/ALM

Facing claims that its affiliate in Brazil jeopardized a client’s $3.18 billion settlement from that country’s “Operation Car Wash” corruption scandal, Baker McKenzie is asserting that American firms have no legal obligation to probe the status of another firm’s attorneys.

John Villa of Williams & Connolly, renowned for his defense of law firms, has showed his cards for the first time in the case, which was filed in the Superior Court of the District of Columbia by an investment entity controlled by two billionaire brothers.

While Baker McKenzie has a “cooperation” agreement with Brazil’s Trench Rossi e Watanabe, Villa’s filing this week emphasized the gap between the two.

“We are unaware of any case, in any U.S. jurisdiction, in which a U.S. law firm was held to have a duty to investigate the bar or employment status of an attorney in another firm, let alone a foreign attorney working at a separately retained law firm in a separate country,” Villa said in a Sept. 10 motion to dismiss. “There is no jurisprudence even close—and there is no basis for this case to be the first.”

In the April lawsuit, plaintiff J&F Investimentos said that Trench Rossi’s move to bring on board senior prosecutor Marcello Miller as a partner ultimately prompted the Brazilian government to try to rescind a 10.3 billion real ($3.18 billion) ”leniency agreement” with the company. J&F controls agribusiness giant JBS, parent company to Brazil’s largest producer of meat and poultry. JBS also has operations in Australia and the U.S., where it owns poultry purveyor Pilgrim’s Pride.

In the complaint, Quinn Emanuel Urquhart & Sullivan partner Michael Carlinsky contended that brothers Joesley and Wesley Batista, who control J&F, and two other officers of the company face the prospect of prison if the government succeeds in voiding the deal.

It also said that Miller participated for several weeks in strategy sessions with Trench Rossi and Baker McKenzie attorneys representing  J&F while he was still employed as a prosecutor. A day after he left public service, he was in Washington, D.C., alongside lawyers from both firms, delivering a presentation to U.S. Department of Justice officials.

The complaint took pains to draw a direct line between Baker McKenzie and Trench Rossi, pointing to the engagement letter with J&F, which purportedly states that the firm operates on a “global scale” and would be “working in cooperation with” Baker McKenzie attorneys, who would be available as part of J&F’s legal “team.”

But in the Monday filing, Baker McKenzie drew out the distinctions between the firms, noting that J&F acknowledged that Miller was not employed by Baker McKenzie in the United States but instead was solely employed as a partner at TRW in Brazil.

“Just like Baker would have no obligation to vet co-counsel at another U.S. law firm, Baker had no obligation to conduct any sort of background check on Miller or to ascertain the appropriate start-date for him under Brazilian law,” the firm argued.

In a footnote, Baker McKenzie noted J&F’s allegation that TRW attorneys at one point had “@bakermckenzie” email addresses, a point that would bolster the suggestion that the two firms were in fact unified. But it said that J&F made no claims that the firms were indeed the same legal entity, or even that TRW used the Baker email addresses during the representation.

Baker McKenzie also argued that the allegedly problematic timing of Miller’s move from the prosecutor’s office to TRW was not the reason that Brazilian authorities are looking to rescind the leniency agreement against the J&F executives, pointing to details in Brazilian pleadings that indicated the Batista brothers continued their illegal conduct and did not cooperate truthfully.

The firm pushed the court to consider an August civil complaint—alongside other Brazilian documents—that alleges the brothers were behind a scheme to bring Miller aboard specifically because he was a prosecutor, rather than being the “unwitting victims of a lawyer’s mistake.”

Additionally, the firm said the civil complaint alleged that Joesley Batista failed to disclose that he bribed a Brazilian senator in exchange for a vote against the successful impeachment of former President Dilma Roussef and that Wesley Batista made illegal trades in advance of the public announcement of the leniency agreements.

“The evidence cited in that complaint confirms our position that the allegations within J&F’s lawsuit against Baker McKenzie are completely contrary to the actual facts of this case,” Baker McKenzie said in a statement. “The J&F lawsuit is both legally and factually baseless and should never have been filed.”

It may take some time for D.C. Superior Court Judge Robert Rigsby to address the substance of the firm’s defenses. J&F is still in the process of serving the complaint on TRW in Brazil. And while Baker McKenzie is seeking to exit the case even before TRW is brought in, at a hearing Friday, the judge said he would not entertain the motion to dismiss until Feb. 15, 2019.

“The court has agreed with our position to adjourn the motion until the first quarter of next year to allow service to be affected on defendant Trench Rossi,” Carlinsky said. 

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