Due Diligence Missteps Are Costly For Law Firms: The Morning Minute
The news and analysis you need to start your day.
July 28, 2023 at 06:00 AM
4 minute read
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WHAT WE'RE WATCHING
GETTING TO KNOW ALL ABOUT YOU - For law firms, having a deep knowledge of your current and potential clients is beneficial for a whole bunch of reasons, not least of which is avoiding a major headache should any of those clients turn out to be fraudsters. Case in point: Pittsburgh-based Eckert Seamans Cherin & Mellot, which is in the midst of negotiating a $45 million settlement to make up for a former attorney's alleged role in helping a merchant cash loan business and an investment services firm defraud investors of nearly $500 million. Unfortunately, as Law.com's Amanda O'Brien reports, smaller firms often lack the resources and systems to effectively and efficiently conduct background research on clients. As a result, due diligence methods vary from online management systems to simply asking around the office about a client's reputation.
DANGEROUS DISCLOSURE? - A federal judge's ruling this week that ordered Covington & Burling to disclose some client names to the SEC has alarmed some legal analysts, including those who say it could erode attorney-client relations and may be used by government agencies to expand the use of administrative subpoenas. U.S. District Judge Amit Mehta of the District of Columbia's ruling Monday could have lasting consequences in "eroding the principle that the attorney-client relationship is confidential," Susan Carle, professor of law at American University Washington College of Law, told Law.com's Abigail Adcox. It could also deter companies or organizations from seeking outside counsel in the first place, Carle added. The Association of Corporate Counsel, which filed an amicus brief in opposition to the SEC's subpoena, said in a statement that the "court's decision threatens to expand the use of administrative subpoenas," noting that 300 federal agencies have this subpoena power.
ON THE RADAR - Lawyers at Clark Hill on Thursday removed a product liability lawsuit against Dick's Sporting Goods and Summit Treestands to Indiana Southern District Court. The suit, filed by Wilson Kehoe Winingham on behalf of Patricia Gibson and Paul Gibson, alleges that Paul Gibson injured himself while using the defendants' Summit Viper Elite SD tree stand for deer hunting; according to the complaint, Gibson's foot became caught in the stand, causing him to fall from the tree and break his ankle. The case is 1:23-cv-01317, Gibson et al. v. Summit Treestands LLC et al. Stay up on the latest state and federal litigation, as well as the latest corporate deals, with Law.com Radar.
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Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
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