Big news. Good decision. Details at WSJ Law Blog. (Disclaimer: I offered an expert declaration in the matter, against the unfinished business doctrine.)
Excerpt from WSJ:
In a decision likely to influence future litigation over failed law firms, a federal judge in San Francisco ruled that defunct law firm Heller Ehrman LLP has no right to profits from unfinished legal work its ex-partners brought to their new employers.
U.S. District Judge Charles Breyer on Wednesday rejected the theory behind those claims–which bankruptcy trustees have used to recover millions on behalf of creditors left in the lurch when law firms fail–and dismissed the Heller trustee’s lawsuits against law firms Davis Wright Tremaine LLP, Jones Day, Foley & Lardner LLP and Orrick, Herrington & Sutcliffe LLP.
“Heller ceased to be able to represent its clients, leaving them with no choice but to seek representation elsewhere,” Judge Breyer wrote in his order. “Defendants came to the rescue of these clients and provided them with legal services on ongoing matters. . . Defendants did the work that generated the fees at issue here. With the Defendants those fees should stay.”