- “A Pennsylvania federal judge ruled Thursday that Holland & Knight can’t escape breach of fiduciary claims in a case involving a former partner who allegedly accessed confidential client files to gain leverage in his divorce proceedings.”
- “U.S. District Judge John Milton Younge of the Eastern District of Pennsylvania found that Philadelphia personal injury firm Fritz & Bianculli sufficiently pleaded facts alleging that former Holland & Knight partner Patrick McCabe, former associate Jean Donohue, and current senior research analyst Eric Berg either did not have authorization or exceeded their authorization to access its files after the firm retained Holland & Knight as counsel in 2022”
- “The underlying litigation, initially filed in state court in August 2024 before being removed to federal court, accused Holland & Knight of failing to flag a conflict of interest regarding Fritz & Bianculli and McCabe, who was in the midst of divorcing his wife who worked as an associate at the personal injury firm. The suit specifically alleged that as a result of failing to flag the conflict, McCabe, along with Donohue and Berg acting on his behalf, accessed files belonging to Fritz & Bianculli to gain an advantage in his divorce proceedings even after the firm terminated its relationship with Holland & Knight in 2023 upon discovering the conflict.”
- “The suit further claimed that McCabe accessed his soon-to-be-ex-wife’s work email to monitor and record communications between his wife and her employer Brian Fritz, whom he suspected were having an affair.”
- “In addition to allowing the breach of fiduciary claims to move forward, Younge permitted the charges against McCabe for violating the Stored Communications Act by accessing Fritz & Bianculli’s email servers through his wife’s work computer to continue.”
“‘Discordant Dots’: Why Phila. Zantac Judge Rejected Bid for His Recusal” —
- “The judge overseeing Philadelphia’s Zantac mass tort did not look favorably upon a bid from plaintiffs to boot him from the litigation. In a Tuesday [1/7] opinion, Judge Joshua Roberts of the Philadelphia Court of Common Pleas said the Zantac plaintiffs ‘fell woefully short of presenting any concrete facts that could support recusal.’”
- “The plaintiffs in the Philadelphia Zantac mass tort had requested that Roberts step away from the litigation on the grounds that Roberts’ wife is a partner at the Am Law 50 firm Reed Smith, which represents Zantac manufacturer GlaxoSmithKline, in litigation over the drug. The plaintiffs contended that the connection between GSK and Roberts’ wife, Shannon McClure, could create the appearance of impropriety.”
- “Roberts criticized the plaintiffs’ arguments as too speculative, writing that the plaintiffs ‘presented plenty of hopeful supposition in the form of discordant dots that they could not connect.’”
- “Roberts noted that Reed Smith’s representation of GSK in Zantac litigation was all outside of Philadelphia and that the firm had placed an ethical wall for McClure regarding matters involving GSK. Roberts ruled that none of the facts asserted by the plaintiffs constituted a basis for recusal under the Code of Judicial Conduct.”
- “The plaintiffs did not allege that McClure, who works in Reed Smith’s global commercial disputes group, was directly involved in the Zantac litigation. However, they argued that McClure’s role at her firm meant she—and, by extension, her husband—had a financial stake in the litigation’s outcome.”
- “The defendants opposed the motion, countering that the judge’s purported connection to GSK was too tenuous to create the appearance of potential bias.”
- “Roberts agreed with the defense, and said in his opinion that the basis for the plaintiffs’ motion creates a ‘slippery slope.’ He questioned what other circumstances would warrant his recusal if he were to accept the plaintiffs’ argument.”
- “Without boundaries on what is and is not considered a conflict, he said, ‘It is easy to conceive that litigation-savvy attorneys could push for recusal under a myriad of tenuous circumstances.’”
- “According to the opinion, Roberts had told counsel about his wife’s role at Reed Smith in December 2023, but the plaintiffs waited until May 2024 to file their motion. While the delay in filing did not appear to afford the plaintiffs a strategic advantage, Roberts said, it was nonetheless an issue.”
- “In a footnote, he wrote, ‘A more cynical view of the circumstances is that plaintiffs’ counsel used the motion as a broadside against my oversight of the entire mass torts program.’”
- Read the full opinion: here.
“Latham Defends Steward Bankruptcy Effort Despite TRACO Concerns” —
- “Latham & Watkins LLP said the Justice Department’s bankruptcy watchdog has ‘no valid basis’ to oppose its retention in Steward Health Care System LLC’s bankruptcy.”
- “In a separate filing, one of the Latham attorneys who would represent Steward, Ray C. Schrock, disclosed that he and his colleague Candace M. Arthur can’t work with Steward on matters related to TRACO International Group, an insurer and non-bankrupt affiliate, because TRACO has refused to grant a requested waiver.”
- “The two attorneys recently joined Latham from Weil, which has been the private health network’s lead bankruptcy counsel since last spring. Steward’s retention application described them as ‘essential’ for its Chapter 11 bankruptcy.”
- “Schrock and Arthur were previously part of the Weil team that advised Steward and its subsidiaries, including Tailored Risk Assurance Company and TRACO, on the Chapter 11 cases. As of August 2024, the insurer is no longer a client of Weil and has retained Steptoe LLP as counsel. TRACO filed a complaint last year in bankruptcy court against Steward for allegedly withholding payments, including insurance premiums of $3.5 million per month.”
- “‘It apparently does not wish for Ms. Arthur and myself to represent the Debtors in matters against TRACO,’ Schrock wrote in the supplemental declaration.”
- “Despite TRACO’s refusal to grant the waiver, he said, he doesn’t believe the retention of Latham represents ‘any interest adverse’ to Steward’s estate or precludes the firm from being a disinterested party.”
- “Schrock said Weil would handle those matters. As a precaution, Latham established an ‘internal ethical wall’ to prevent attorneys and staff who previously worked on TRACO-related matters while at Weil, including Arthur and himself, from accessing TRACO-related files or participating in any matters specific to the insurer.”
- “The US Trustee opposed Latham’s retention last month, saying Steward ‘cannot afford the fees of another large multinational law firm,’ as Weil has already billed nearly $70 million in legal fees.”
- “Latham argued that the US Trustee overlooked that Schrock and Arthur logged 2,000 hours of Weil’s legal services during the bankruptcy, saying their continued involvement would benefit the company.”
