Judge Colleen McMahon (SDNY) has ordered Boies Schiller (“BSF”) to pay the legal fees of a former client (“Host”) that it sued. She held that the law firm had failed to detect a disqualifying conflict, causing Host to incur fees to prepare a disqualification motion. The firm withdrew before the motion was filed, following a meeting with Host’s current counsel, but not until two months after Host asserted the conflict.
In a Reuters arrticle by Alison Frankel, Boies Schller is quoted as saying that McMahon "ignored crucial, undisputed facts." The firm also stressed that there was no evidentiary hearing. And it decried the court's "intemperate language" and anticipated an appeal.
The opinion is a painstaking (and for some painful) walk through the conflicts that Judge McMahon says the firm failed to discover or for a time even acknowledge. And it is quite critical not only of the firm but also of the outside ethics lawyer, Michael Ross, whom the firm hired to advise it after Host asserted the conflict. McMahon's characterizations of Ross's work should be instructive for lawyers asked to advise law firms.
For example, McMahon criticizes the fact that "Ross [and his colleague, James Liss] did not even read [BSF's] draft complaint until after they had interviewed Baxter [the BSF lawyer who had done the earlier work that was the basis for the conflict] and delivered [his] ‘tentative conclusion'. [This last quote is italicized.] I confess that I do not see how anyone could have asked Baxter an intelligent question about the scope of the prior representation without reading [the] draft complaint" that purportedly created the conflict.
"A clearer conflict of interest cannot be imagined,” McMahon concluded. "A first year law student on day one of an ethics course should be able to spot it." Of course, first year law students don’t take ethics classes most places.
Proskauer, through its professional responsibility counsel, Charles Mokriski, represented Host in the challenge to BSF's complaint adverse to Host.
The case is Madison 92nd Street Assoc. LLC v. Marriott International, Inc., decided 10-31. Alison Frankel's Reuters story was posted 11-1, and worth a read. The opinion is at:
http://blogs.reuters.com/alison-frankel/files/2013/11/boiessanctionsruling.pdf