Everyone loves the hot new lateral partner — until one of his past clients causes a conflict that gets your law firm unceremoniously booted from a big ol’ case.
Just last Friday, SF Federal Judge Phyllis Hamilton kicked D.C.-based Crowell & Moring off a DRAM price fixing case for that very reason. Crowell lawyers from its Washington, D.C., office were representing All American Semiconductor, Edge Electronics, Jaco Electronics and Unisys in a civil antitrust case against Infineon. Problem was that John Vandevelde — who joined Crowell when it acquired his small L.A. firm, Lightfoot Vandevelde, in the fall — had represented an Infineon exec in a criminal probe into the same price-fixing matter a few years ago.
Crowell argued that Vandevelde wasn’t working on the civil case and had gotten an advance conflict waiver from Infineon. After Infenion wrote Crowell a letter about the conflict, Crowell also erected an “ethics wall” to keep Vandevelde and his colleagues in L.A. from talking with the other Crowell lawyers about the case.
But it wasn’t enough to convince Judge Hamilton that confidential information wouldn’t end up in the wrong hands.
“The fairness and the integrity of the judicial process and Infinion’s legitimate interest in litigating this action free from the risk that confidential information may be unfairly used against it outweighs the plaintiffs’ interest in being represented by Crowell,” she wrote (.pdf).
Legal Pad checked in with legal ethics expert Diane Karpman of Karpman & Associates. She told us that the case highlights how advance waivers aren’t being upheld in court. That’s a problem for client-laden big law firms, which are increasingly asking for broad advance waivers up front from new clients.
Karpman said the ruling on the whole was not a shocker, given the case law out there.
“It’s pretty unsurprising,” Karpman told us. “But it’s conservative and the mood in the profession now is that we need a little more maneuverabity as lawyers.”
Karpman did have one question for the Crowell: “Didn’t they do a conflicts check before the merger?”
— Zusha Elinson
Perhaps this will prevent future consolidation in the legal industry. Bigger isn't necessarily better, as we have learned from the new "too big to fail" policies.
Posted by: Robert Abtahi | December 22, 2008 at 04:24 PM
Excellent, A Judge with some horse sense. Frankly, I'm glad to see that Judge Hamilton made the conservative and ethical decision. Good call Judge, "ethics wall" my butt. Ever been in a bar near a courthouse on a Friday night?
Think you could spread some of this ethical behaviour around the courthouse?
Posted by: M.M. | June 30, 2009 at 03:29 AM