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| "An Appearance of Impropriety" - Boies Resigns from Adelphia |
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Friday, September 02 2005 @ 10:14 PM EDT
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David Boies is in the middle of a storm. You can read about it on Ideoblog, written by law professor Larry E. Ribstein, who writes: David Boies’ firm resigned as Adelphia special counsel after it was learned that Boies’ family members owned a company that owned, through another company, a document management company Adelphia had hired on the Boies’ firm’s recommendation. Lest you think document management is small potatoes, Adelphia has paid $5-$10 million for its services. A spokesman for Boies Schiller said it was an inadvertent error, adding, "we have not resigned because we have done anything unlawful or improper."
The conflict came to light, the WSJ reports, in a document filed in the case by a creditor: According to documents filed in bankruptcy court in New York, several relatives of Mr. Boies indirectly own part of a document-management company called Amici LLC, which has stored and managed Adelphia's legal documents since 2002. Document-management services are critical to companies involved in complex litigation, since they consolidate legal documents into an electronic database. . . .
The issue first came to light in a hearing in July in U.S. Bankruptcy Court in the Southern District of New York. Kenneth Noble, a lawyer representing Bank of Montreal, mistakenly claimed that Amici had financial ties to Mr. Boies and said that the service was difficult to use. Bank of Montreal is one of Adelphia's creditors, as well as a previous agent to the company, and is involved in lawsuits both against and with Adelphia.
Mr. Noble, a lawyer with Mayer, Brown, Rowe & Maw, said in the hearing that Amici is "an entity as I understand it, that was founded by David Boies and some other folks and is affiliated with the Boies Schiller law firm." Mr. Noble couldn't be reached for comment. . . .
In an August affidavit, following Mr. Noble's comments, Mr. Korologos denied that Mr. Boies or the law firm has any financial stakes in Amici. He added, however, that that several of Mr. Boies's children own indirect stakes in Amici through a company called Legal & Scientific Systems LLC. Mr. Boies's son David III owns 16.75% of Legal & Scientific, son Christopher owns 14.25%, and son Jonathan and daughter Caryl each own 13%. Legal & Scientific owns half of a company called Datatmine LLC, which owns 51% of Amici, according to Mr. Korologos. He said the balance of the Legal & Scientific ownership is held by David Boies III's siblings, children, nieces and nephews, according to Mr. Korologos. Mr. Korologos said he wasn't aware of the financial ties until the hearing in July with Mr. Noble. If you would like to read the Boies Schiller Disclosure filing, here [PDF] you go; and here [PDF] is a second disclosure in which the firm responded to questions from the judge regarding rates of payment.
The next day, The Wall Street Journal had more, which Ribstein encapsulates: This apparent conflict wasn’t disclosed when Adelphia approved use of the fim.
Now the W$J reports that several other Boies clients, including Qwest and Tyco, were in the same boat. The story also notes that a former Boies associate, Duker, who headed the firm was sentenced to 33 months in prison in 1997 for “falsely inflating legal bills to the federal government.” Mr. Boies was not implicated in Mr. Duker's misconduct. The Wall Street Journal next adds these details: Mr. Boies in an interview said yesterday he should have fully disclosed his children's' ownership interest in Amici. "I should have made certain that everyone knew about it," he said. He added that "a half dozen, or maybe eight Boies Schiller clients also use Amici."
Mr. Boies also confirmed that members of his family indirectly own stakes in a document-copying company called Echelon Group LLC. . . .
There is, says Stanford University law school ethics expert Deborah Rhode, "an appearance of impropriety." It's really up to the client to select a document production firm, not the lawyers. . . . .
Four of Mr. Boies's children had indirect stakes in Amici through a company called Legal & Scientific Systems LLC totaling about 25.5% of the document company. The wife, mother and mother-in-law of Nick Gravante, a Boies Schiller partner, own indirect stakes. Paul McGreal on the Corporate Compliance Prof blog tries to figure out what ethical rules might have been violated, and he lists Model Rule 1.7(a)(2), "which states
that a conflict exists with a current client when 'there is a significant risk that the representation
of one or more clients will be materially limited . . . by a personal interest of the lawyer.'” I don't personally see how that rule applies to these facts, but he's a lawyer and I'm not, so he is probably right. The part I don't see is how there was any limitation of representation. New York State's Lawyer's Code of Professional Responsibility details an attorney's ethical obligations in that state. Here is NYS's Rule 1.7, on conflicts of interest. Again, I have no knowledge whether any of the rules apply to this fact pattern, but I'm making the links available so you can follow the story as it evolves.
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| Authored by: Anonymous on Friday, September 02 2005 @ 11:20 PM EDT |
Including the mandatory incorrectness of the subject line.
---
--Bill P, not a lawyer. Question the answers, especially if I give some.[ Reply to This | # ]
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| Authored by: Anonymous on Friday, September 02 2005 @ 11:22 PM EDT |
Please notice the red notes just below the box you type you comment into: this
tells how to make clickable links.
---
--Bill P, not a lawyer. Question the answers, especially if I give some.[ Reply to This | # ]
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| Authored by: WhiteFang on Friday, September 02 2005 @ 11:31 PM EDT |
I don't see anything illegal here.
But ... it certainly doesn't look good.
My stand on something like this is that it's morally reprehensible to have close
friends or relatives even indirectly involved in a situation where utmost
professionalism is a top requirement.
I question the integrity of any law firm or lawyer who's got even the appearance
of this type of impropriety. Personally, I have a very difficult time believing
that this is on the 'up and up'.
Especially given:
1} the numbers of relatives involved.
2} the layers of ownership.
Probably not illegal. But sure stinks.[ Reply to This | # ]
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| Authored by: webster on Saturday, September 03 2005 @ 01:26 AM EDT |
One of the burdens of celebrity is that you have to take the heat, even
unfairly. Boise's high profile causes his causes to be scrutinized with a
juandiced eye by his opposition. They will pick up on everything and obviously
it has become fashionable to dwell on Boise's ethics. As is pointed out up
above, he committed no crime. Certainly he didn't direct partners in his firm
to recommend that their clients use the family document firm. They did this on
their own without any undue influence. Now this has their other clients
scrutinizing the situation just ready to embarass them if their case does not
proceed favorably. Also this family document firm was not owned directly by the
family. Indeed they probably did little work for their cut. They were just
given a piece because they were related and there was tax dispersal. These are
all not like the SCO case were there is routinely many long and strange motions
and so on. Certainly the family document firm did a good job. Some one has to
do this work, why not them? It is not rocket science. Also it is easier to get
clients with a litigation law firm ready to recommend you. They obviously
outbid other companies amd even gave a discount. Certainly Boise did not
inspire one extra interrogatory, page, exhibit book or motion even. They
haven't done anything "overlength" either. Lawyers and their families
got to eat. The clients aren't paying much more than they would be paying to
anyone else. Boise would not pass up an appropriate settlement just to churn up
more document business. He doesn't even know precisely what percentage they
own. If they all died, he would only inherit from half of them.
There really is nothing more than an appearance of impropiety. If it hadn't
leaked out, it wouldn't have made any difference. Boise can tell us himself the
next time he's on TV when Charlie Rose wipes the cream off his lips and asks him
about it.
---
webster
>>>>>>> LN 3.0 >>>>>>>>>[ Reply to This | # ]
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| Authored by: AllParadox on Saturday, September 03 2005 @ 02:03 AM EDT |
If your high-powered and expensive lawyers suggest a particular document
handling firm, you use the firm, or risk losing the investment in the big-gun
lawyers.
The impropriety is that attorneys are discouraged from conducting non-legal
business with clients during trials. Failing to inform your client that your
children own a controlling interest in the document handling firm is big risk.
If Boies suggested his children's firm without acknowledging his connection, he
is near to a misconduct.
But to go a step further, if the customer goes into bankruptcy, then failure to
disclose the on-going relationship can amount to a fraud on the bankruptcy
court: the bankruptcy judge must be informed of, and approve, all payments to
attorneys, whether made directly or to members of his family.
IMHO, this is more than a simple notification error.
---
PJ deletes insult posts, not differences of opinion.
AllParadox; retired lawyer and chief Groklaw iconoclast. No legal opinions,
just my opinion.[ Reply to This | # ]
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| Authored by: Dark on Saturday, September 03 2005 @ 04:08 AM EDT |
I have a guess: this could create a situation where it's not in the lawyer's
personal interest to limit the scope and amount of discovery that the client has
to do. Such a conflict of interest could lead to inferior representation on
discovery motions.
[ Reply to This | # ]
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| Authored by: dtfinch on Saturday, September 03 2005 @ 04:48 AM EDT |
...family members owned a company that owned, through another company, a
document management company Adelphia had hired on the Boies’ firm’s
recommendation
Upon further investigation:
Google
: Results 1 - 1 of 1 for Boies Adelphia "Kevin Bacon". (0.28
seconds)
WooHoo!!!
[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, September 03 2005 @ 08:37 AM EDT |
This has just showed
up on the webwaves. It's from the "Declaration of Mark Lucovsky" in the
MS-Google case. A few quotes.
Prior to joining Google, I set up a
meeting on or about November 11, 2004 with Microsoft's CEO Steve Ballmer to
discuss my planned departure....At some point in the conversation Mr. Ballmer
said: "Just tell me it's not Google." I told him it was Google.
At that
point, Mr. Ballmer picked up a chair and threw it across the room hitting a
table in his office. Mr. Ballmer then said: "F***g Eric Schmidt is a f***g
pussy. I'm going to f****g bury that guy, I have done it before, and I will do
it again. I'm going to f****g kill Google." ....
Any one have a means of
getting a copy of the full document?
PS. Please forgive the language, but
it is directly from the document, it seems. [ Reply to This | # ]
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| Authored by: Anonymous on Saturday, September 03 2005 @ 10:49 AM EDT |
We've all had a laugh at some of Boise and Schiller's shenanigans in the SCO
case.
And at hole they started to realise they were in when IBM's legal team rolled
their sleeves up and started attacking - rather than just listening with amused
interest to the alleged "case" against IBM.
But, while they've skirted on the edge a bit with courtroom trickery, I've not
seen anything on Groklaw to suggest that Boise and Schiller are anything other
than a competent and professional legal firm. With a difficult client insisting
on proceeding with a doomed case.
We shouldn't look at things that occur with, or are said by, B&S outside of
the SCO litigation with the same cynicism that we properly accord McBride &
Co's utterances.
Just trying to be fair.
[ Reply to This | # ]
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| Authored by: DWitt_nyc on Saturday, September 03 2005 @ 11:23 AM EDT |
| while I usually tend to agree that one shouldn't jump to conclusions, it's
pretty apparent that Bois likes to play close to the line, and regularly steps
over it:
from The Battle
of the Giants over AIG:
Boies has had his share of over-the-top
bravura--an impulse that has
repeatedly landed him in scalding water. He and
his clients have been
sanctioned at least three times. "It's fairly unusual,"
says Paul Carrington, a
professor at Duke University Law School and author of
current rules on
sanctions in federal courts. "I don't think lawyers get
sanctioned very often.
People get very angry first."
In one 1998 case
Boies tried to get New York Supreme Court Judge Edward
Greenfield removed from
a lawsuit--three years after his client, New York
landlord Sheldon Solow, had
settled the underlying complaint. Boies cited
flimsy allegations of corruption
dug up by Solow's investigators involving the
judge's clerk, which raised at
least "the appearance of impropriety" by the
jurist. But in a testy courtroom
exchange Greenfield accused the litigator of
ignoring "basic law that everyone
knows after the first year of law school."
Still another judge fined Boies and
his client $46,000 for filing the "barely
sensible" motion. "It was
startlingly unusual," says Greenfield of the incident,
which occurred as he was
retiring at the mandatory age of 76. "I'd never seen
anything like it in 35
years on the bench." Solow appealed the sanctions and
lost. Even today Boies
maintains "we had a bad judge" who should have
recused himself even if there
were no evidence of corruption. Attacking a
judge, he says, is "always the last
resort."
Boies was fined again in 2003. This was after filing a federal
Racketeer
Influenced & Corrupt Organizations suit against a doctor who had
sold an
East Hampton, N.Y. waterfront mansion to Hard Rock Cafe founder Peter
Morton. Solow, who owns a house nearby, had already lost a state-court suit
seeking to overturn the sale. "Boies was brought in to have more artillery,"
says Morton's lawyer, Errol Margolin. The Second Circuit Court of Appeals
called the suit "frivolous," however, and ordered Boies, Schiller and another
firm to pay double costs.
In a high-profile price-fixing case against the
Click modeling agency last
year, New York defense attorney Aaron Richard Golub
convinced a federal
judge to fine Boies, Schiller $30,000 for failing to
respond to discovery
requests--even though the court insisted it do so. "No
attorney can expect an
exemption" from court rules "simply because that
attorney chooses to take on
more work than he or she can handle," said U.S.
District Judge Henry Pitman
in a May 2004 opinion. "We nailed them left and
right," Golub says. Boies
explains that despite the sanctions, all the modeling
agencies, including
Click, settled for undisclosed amounts.
Boies narrowly
escaped sanctions in a Florida lawsuit over the estate of
celebrity jeweler
Harry Winston. He and partner Robert Silver agreed to pay a
former Winston
employee a bonus of up to $1 million for help with the case.
The Florida
Supreme Court called it paying a witness and suspended for 90
days the license
of a Florida lawyer who worked with Boies. Boies and Silver,
who are licensed
to practice in New York, were exonerated last year by the
New York State Bar
Association.
end quote
not to mention the recent contretemps in
Florida, where Bois mixed the
personal with the legal, and gave a 'friend'
$400,000 worth of free legal
services. (this link is from 2003, so if
anybody has a more recent link that
shows the resolution of the case, please
post it)
IANAL (TG), but IMO, Bois has the mind of a top-rate lawyer, but
the ethics of
a (Worldcom, Enron, Adelphia, Tyco) CEO...
-DW
[ Reply to This | # ]
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| Authored by: Anonymous on Saturday, September 03 2005 @ 12:02 PM EDT |
Boies is the same guy that's helped SCO and led the DOJ's utter failure (in
terms of results) prosecution of Microsoft.
I wouldn't be surprised to find money trails in those other cases.
Where there is smoke ...
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| Authored by: Anonymous on Monday, September 05 2005 @ 03:30 AM EDT |
Just Curious: if David Boies's fathers name is Edward shoudn't his son be David
Boies Jr., not David Boies III?
http://www.nndb.com/people/817/000030727/[ Reply to This | # ]
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| Authored by: Anonymous on Monday, September 05 2005 @ 10:10 AM EDT |
<< A spokesman for Boies Schiller said it was an inadvertent error,
adding, "we have not resigned because we have done anything unlawful or
improper." >>
Translation: We're exercising our plausible deniability. Nobody can prove
anything, so we're not quitting. [ Reply to This | # ]
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