Risk Updates — Professional Liability Opinions Review (Texas Edition), Client Conflicts Vetting on View in Corruption Trial, Litigation Referral Fee Concern

“Court Reveals Madigan Vetted His Client List Assiduously, Excluding the Times He Didn’t” —

• “Former Illinois House Speaker Michael Madigan’s longtime law firm partner Vincent ‘Bud’ Getzendanner testified in Madigan’s defense against numerous federal charges last week.”
• “One of the main themes of Getzendanner’s testimony was the property tax firm’s process of weeding out clients and potential clients who could pose a conflict of interest to Madigan.”
• “Getzendanner testified ‘there would be a meeting once or twice a year involving Madigan’s statehouse legal staff regarding Madigan & Getzendanner clients,’ Sun-Times reporter Jon Seidel reported from the courtroom. Getzendanner would also periodically send the firm’s client list to some of Madigan’s Statehouse staffers so that they could check it against legislation that was currently before the Illinois House, Seidel noted.”
• “The jury was also shown emails from Madigan’s legislative staffers to Getzendanner regarding inquiries about the firm’s clients, or whether some entities with issues before the legislature were clients.”
• “‘There was a constant back and forth between Mike’s legislative staff and the law office,’ Getzendanner told jurors, according to Dave Byrnes with Courthouse News.”
• “Getzendanner also testified that he had the final say about whether to bring in clients.”
• “As an example, in a memo shown to jurors from Getzendanner to Madigan, Getzendanner wrote, ‘No file is accepted and opened until I do a review to determine if the firm’s representation would constitute a conflict, or the appearance of a conflict, with your legislative duties,’ reported the Tribune’s Jason Meisner.”
• “Jurors were shown a chart of Madigan clients with notations from various folks about potential conflicts. ‘Most entries on the chart say, ‘no conflict,’’ reported Seidel. Madigan attorney Dan Collins highlighted one email that read, ‘possible appearance of conflict; principal owner of Walton is Neil Bluhm who is principal owner of Rivers Casino. Very thin connection, but err on side of caution.’”
• “This thorough and nearly constant vetting process is why the people who thought they knew Madigan well firmly believed that he understood where the legal lines were and that he had never crossed them. Some still believe that’s true today.”
• “Clients with land-transfer issues would definitely be screened out, Getzendanner testified, according to Seidel. ‘That’s a category where you absolutely could not take on a client.’”
• “And yet, the prosecution has shown jurors evidence that Madigan did, indeed, work on legislation to help a real estate investor by trying to move a Chinatown land transfer bill through the House. The feds also presented evidence that allege a successful transfer would’ve resulted in legal business for Madigan & Getzendanner from that developer.”
• “The deal was being put together by then-Chicago Ald. Danny Solis, who became a mole for the FBI after being confronted with his own lawbreaking. As I’ve told you before, Madigan instructed Solis to reach out to Michael McClain to see if he could help. McClain was Madigan’s top advisor and the trial’s Madigan co-defendant.”
• “OK, wait a second. Didn’t Getzendanner testify under oath that he had the final say in taking on new clients and that there was no way a client with a land transfer bill would ever be accepted? And wasn’t there a massive and ongoing client vetting process?”
• “It doesn’t matter to the feds. Policies can be changed, after all. And they have enough recordings to suggest Madigan was pushing the bill and was being told he’d get a new client out of it.”
• “‘One of my regrets is that I had any time spent with Danny Solis,’ Madigan told jurors, according to the Sun-Times.”

More on this matter: “Closing arguments begin in Mike Madigan federal corruption trial”

“V&E Law Firm Defense Team’s Annual Review of Texas Professional-Liability Opinions” —

• “V&E’s Law Firm Defense team constantly monitors Texas judicial opinions that could impact liability for attorneys and law firms practicing in Texas and around the country. We summarize here what we considered to be the most important Texas judicial opinions of 2024 about which law firm general counsel and loss-prevention attorneys with regional, national, or international practices should be aware.”
• “The Beaumont Court of Appeals Held That an Out-of-State Law Firm Was Not Subject to Personal Jurisdiction in Texas for Having Communications with a Prospective Texas Client About a Texas Matter. Oshman v. Wilkison, No. 09-23-00201-CV, 2024 WL 1100005 (Tex. App.—Beaumont Mar. 14, 2024, pet. filed)”
• “Here, the out-of-state firm’s website advertised that it handled personal injury cases in all 50 states and invited potential clients to submit online case evaluation forms. The plaintiff, a Texas resident, submitted a form regarding a potential wrongful death matter in Texas. Lawyers at the firm had follow-up communications with the plaintiff and asked plaintiff to submit various other documents from Texas. Ultimately, the firm declined to take the matter. The plaintiff sued the firm in Texas arguing that the firm failed to properly advise plaintiff about a looming limitations issue.”
• “Reversing the trial court on an interlocutory appeal, the court found that the firm was not subject to personal jurisdiction in Texas and rejected several arguments routinely employed to establish jurisdiction over an out-of-state firm. Among other things, the court held: (1) legal work done out of state did not establish jurisdiction in Texas, even if done on behalf of a Texas resident; (2) mere communications between an out-of-state firm and a Texas resident did not establish jurisdiction in Texas; (3) a firm website that is accessible to Texas residents did not establish jurisdiction in Texas when it was nationally accessible; and (4) discussing a prospective Texas matter with a Texas resident did not establish jurisdiction in Texas because the matter was never filed.”
• “The plaintiff has asked the Texas Supreme Court to review this decision, but the Texas Supreme Court has not decided if it will grant a discretionary review.”
• “The Houston Fourteenth Court of Appeals Held That a Law Firm Was Subject to Personal Jurisdiction in Texas for Work on an Out-of-State Matter Because It Solicited the Client (and its Affiliates) for Unrelated Work in Texas. Akerman, LLP v. Landry’s Seafood House-Florida, Inc., No. 14-23-00778-CV, 2024 WL 5051198 (Tex. App.—Houston [14th Dist.] Dec. 10, 2024, no pet. h.)”
• “This opinion reached the startling conclusion that a Florida-based law firm was subject to personal jurisdiction in Texas for alleged legal malpractice committed when Florida attorneys performed legal services in Florida for a Florida-based plaintiff on a matter involving Florida real estate. The court acknowledged that no legal work on the underlying matter was performed in Texas, that the client was the one who reached out to the Florida attorneys for representation on the underlying matter, and that, although the firm had Texas offices, no Texas attorneys were involved in the underlying matter. Despite these facts, however, the court found the firm was subject to personal jurisdiction in Texas because there was evidence that the firm previously solicited unrelated work in Texas from the client and its Texas-based affiliated companies and that these solicitation efforts led to the firm’s hiring on the underlying matter.”
• “The time period for the law firm to request a discretionary review by the Texas Supreme Court has not passed.”

“RFK Jr.’s referral fees in litigation over Merck’s Gardasil raise conflict-of-interest questions: reports” —

• “Department of Health and Human Services (HHS) secretary nominee Robert F. Kennedy Jr. plans to continue to receive referral fees from a law firm that is suing pharma powerhouse Merck & Co. over the marketing and sale of one of its vaccines.”
• “RFK Jr.’s plan—which was revealed (PDF) in a signed ethics agreement that was made public earlier this week—raises conflict-of-interest issues as he is seeking confirmation to run an agency that regulates Merck and other drugmakers.”
• “The law firm, Wisner Baum, represents clients who are suing Merck for not warning that its HPV vaccine Gardasil could cause cervical cancer. RFK Jr. has played a key role in organizing Gardasil litigation in the U.S., according to Reuters, and has rights to 10% of fees recovered in certain cases.”
• “The New York Times was first to make the link between Wisner Baum and the action it is taking against Merck and to report the associated concerns with RFK Jr. given his ethics statement.”
• “Upon his potential confirmation, RFK Jr. said he would resign as a consultant for the firm but would still collect referral fees for cases that the company won, provided—per HHS and ethics committee review—that they don’t involve the U.S. “
• “‘I will retain a contingency fee interest in cases that the ethics office of the Department of Health and Human Services has determined do not involve the United States as a party and in which the United States does not have a direct and substantial interest,’ RFK Jr. wrote in the document. ‘I am entitled to receive a portion of future recovery in these cases based upon the set percentage as set forth in the referral agreement.’”
• “Conversely, in cases that do involve the U.S. government, RFK Jr. pledged to divest his financial interest, according to the filing. The National Vaccine Injury Compensation Program—a special legal system for suspected vaccine-related injuries—falls under HHS authority, so RFK Jr. would presumably divest his interest in any of those petitions.”
• “RFK Jr. collected $856,000 from Wisner Baum last year, according to his financial disclosure form (PDF).”
• “Besides the Gardasil litigation, Wisner Baum is active in lawsuits concerning Pfizer’s injectable birth control drug Depo-Provera, Novo Nordisk’s Ozempic, Indivior’s pain drug Suboxone and other medicines. The firm has a history of litigation involving the drug industry, according to its website.”
  “With RFK Jr. appointment for HHS, biopharma industry could face powerful adversary in government”
• “RFK Jr., for his part, has a decades-long history of spreading anti-vaccine rhetoric and conspiracy theories, including the debunked claim that vaccines cause autism. When his HHS nomination was announced, stock prices for many of the world’s top vaccine makers dropped.”

“Trump hires new lawyers to appeal his hush money conviction” —

• “President Donald Trump has hired the elite white-shoe law firm Sullivan & Cromwell to appeal his criminal conviction in the Manhattan hush money case.”
• “The most prominent member of Trump’s new legal team is Robert Giuffra, the firm’s co-chair… ‘President Donald J. Trump’s appeal is important for the rule of law, New York’s reputation as a global business, financial and legal center, as well as for the presidency and all public officials,’ Giuffra said in a statement. ‘The misuse of the criminal law by the Manhattan DA to target President Trump sets a dangerous precedent, and we look forward to the case being dismissed on appeal.’”
• “In the hush money case, Giuffra and his firm’s other lawyers will replace Todd Blanche and Emil Bove, who represented Trump during the trial last spring. Blanche is Trump’s nominee to become deputy attorney general, and Bove has already joined the Trump Justice Department as acting deputy attorney general. Once Blanche is confirmed, Bove will step into the No. 3 spot in the department.”
• “The decision to represent Trump by Sullivan & Cromwell, one of the most prominent firms in the country, represents a departure from the legal community’s attitude toward him in recent years. When Trump hired Blanche to represent him in the spring of 2023, Blanche had to quit the elite firm where he was a partner, Cadwalader, Wickersham & Taft.”
• “In his resignation email at the time, Blanche said he was unable to take Trump as a client while remaining at the firm. ‘Obviously, doing this as a partner at Cadwalader was not an option,’ he wrote, ‘so I have had to make the difficult choice to leave the firm.’”
• “Giuffra has worked as a litigator representing companies like Volkswagen AG and Fiat Chrysler Automobiles. He also has held a handful of New York state government-appointed positions, including on several ethics boards.”
• “Last spring, Trump was convicted of 34 felony counts of concealing a $130,000 payment to porn star Stormy Daniels. He was sentenced to ‘unconditional discharge,’ a sentence that carries no punishment, earlier this month, shortly before he took office.”