Justia Professional Malpractice & Ethics Opinion Summaries

This case stemmed from plaintiff's complaint, alleging that on September 11, 2001, a bomb was detonated inside the Pentagon, that no plane hit the Pentagon, and that various identified United States civilian and military leaders knew about the 9/11 attacks in advance, assisted in their planning, and subsequently covered up the government's involvement. Following the court's order to show cause why sanctions should not be imposed for filing a frivolous appeal, sanctions were imposed on plaintiff's counsel of record. One of plaintiff's counsel of record, William Veale, was further sanctioned for filing a frivolous and vexatious motion to disqualify the panel "and any like-minded colleagues" from considering plaintiff's petition for panel rehearing and rehearing in banc of the court's opinion in Gallop I, following a July 7, 2011 order to show cause. In addition, plaintiff's lead counsel of record, Dennis Cunningham, was admitted pro hac vice for the purpose of this appeal and was ordered to show cause why he should not be separately sanctioned for his principal role in drafting the relevant filings. View "Gallop v. Cheney" on Justia Law

This matter was before the court on a motion to dismiss, pursuant to Court of Chancery Rule 23.1, for failure to make a pre-suit demand upon the board, and Court of Chancery Rule 12(b)(6) for failure to state a claim. At issue was whether actions taken by certain director defendants fell outside of the fiduciary boundaries existing under Delaware case law - and were therefore subject to judicial oversight - or whether the acts complained of were within those broad boundaries, where a law-trained judge should refrain from acting. The court held that the facts pled in support of allegations that the director defendants violated fiduciary duties in setting compensation levels and failing to oversee the risks created thereby, if true, only supported a conclusion that the directors made poor business decisions. Thus, plaintiffs have failed to allege facts sufficient to state a claim. Consequently, the court need not reach the Rule 12(b)(6) issue. View "In re: The Goldman Sachs Group, Inc. Shareholder Litigation" on Justia Law

Dissatisfied with the settlement of a trademark case, plaintiffs filed suit on March 30, 2009 in the Superior Court of New Jersey, alleging legal malpractice and related claims. The complaint was served on one defendant on April 14, but others (law firm) were served on April 23. More than 30 days after the first defendant was served but less than 30 days after the law firm was served, the law firm filed a notice of removal. On May 22, plaintiffs filed a motion to remand the action to state court. The federal district court denied remand, finding that the removal was timely under the later-served rule. The Third Circuit affirmed. The later-served rule, under which each defendant gets his own 30-day window, represents a better reading of the language of 28 U.S.C. 1446(b) and results in more equitable treatment to later-served defendants. View "Delalla v. Hanover Ins. Co" on Justia Law

The Tennessee Board of Medical Examiners suspended Dr. Joseph Rich's medical license for one year and imposed other conditions after finding that, among other things, the physician had violated Tenn. Code Ann. 63-6-214(b)(1)(4) and (12). The chancery court affirmed the Board's judgment. The court of appeals reversed because the Board failed to articulate the applicable standard of care in its deliberations. The Supreme Court (1) held that the Board was required by Tenn. Code Ann. 63-6-214(g) to articulate the applicable standard of care in its deliberations; (2) vacated the ruling of the trial court to the extent that it affirmed the Board's decision that Rich had violated sections 63-6-214(b)(1)(4) and (12); (3) vacated the judgment of the court of appeals to the extent it reversed the Board's findings that Rich violated sections 63-6-214(b)(1)(4) and (12); and (4) rather than reversing the Board's findings of violations, remanded the matter to the Board with instructions to conduct deliberations based on the existing record and articulate the applicable standard of care as required by the statute. View "Rich v. Tenn. Bd. of Med. Exam'rs" on Justia Law

In this action brought pursuant to 8 Del. C. 225, plaintiffs sought a determination that certain written consents validly removed defendant directors and replaced them with a new slate. Defendant directors contended that they could not be removed or a new slate elected without the consent of a majority of the Series B Preferred Stock. Applying enhanced scrutiny, the court held that defendant directors breached their fiduciary duties when issuing the Series B Preferred Stock where, although they honestly believed they were acting in the best interests of the company, they breached their duty of loyalty by structuring the stock issuance to prevent an insurgent group from waging a successful proxy contest. Therefore, the class provision could not be given effect and the written consents validly elected a new board. View "Johnston, et al. v. Pedersen, et al." on Justia Law

This post-trial opinion determined the voting membership of GnB, LLC, a Delaware limited liability company. The parties disputed whether Firehouse Gallery, LLC, a Florida limited liability company, was a voting member of GnB. The parties also disputed whether GnB possessed an exclusive license to use the first-tier, generic domain name candles.com; held an option to purchase candles.com; and owned other assorted domain names relating to the candles business. The court held that Firehouse and plaintiff, who controlled GnB, each held a 50% voting membership interest; GnB owned the exclusive license and option to purchase candles.com and the other domain names; and plaintiff and defendant, the current principal of Firehouse, each breached their fiduciary duty of loyalty to GnB and must account for the profits and personal benefits they received. The court held that defendant was not otherwise liable to GnB or plaintiff. Because all of the litigants engaged in misconduct that could support fee-shifting, the doctrine of unclean hands applied with particular salience. Accordingly, the court held that all parties would bear their own fees and costs. View "Phillips v. Hove, et al." on Justia Law

Plaintiff, acting pro se, sued an attorney, claiming that her medical malpractice case had been dismissed because the attorney failed to retain an expert as required by state law. Plaintiff failed to file a certificate of merit within 60 days, as required by state law in professional malpractice cases. Given extensions, plaintiff filed various documents reflecting that she did not understand the rule. The district court dismissed. The Third Circuit remanded. The state rule does not conflict with any federal rule and is substantive law that must be applied by a federal court in a diversity case, but plaintiff complied with the rule when she indicated that expert testimony of an appropriate licensed professional was unnecessary for the prosecution of her complaint (PA.R.CIV.P. 1042.3(a)(3)). The district court lacked discretion to reject the filing. View "Liggon-Redding v. Estate of Sugarman" on Justia Law

Appellants appealed the dismissal of their class action complaint against Nextel, the law firm of Leeds, Morelli & Brown, P.C. (LMB), and seven of LMB's lawyers (also LMB). Appellants were former clients of LMB who retained the firm to bring discrimination claims against Nextel. The complaint asserted that, inter alia, LMB breached its fiduciary duty of loyalty to appellants and the class by entering into an agreement with Nextel in which Nextel agreed to pay: (i) $2 million to LMB to persuade en masse its approximately 587 clients to, inter alia, abandon ongoing legal and administrative proceedings against Nextel, waive their rights to a jury trial and punitive damages, and accept an expedited mediation/arbitration procedure; (ii) another $3.5 million to LMB on a sliding scale as the clients' claims were resolved through that procedure; and (iii) another $2 million to LMB to work directly for Nextel as a consultant for two years beginning when the clients' claims had been resolved. The court held that appellants have alleged facts sufficient to state a claim against LMB for, inter alia, breach of fiduciary duty and against Nextel for aiding and abetting breach of fiduciary duty. Therefore, the court vacated and remanded for further proceedings. View "Johnson v. Nextel Communications, Inc." on Justia Law

In this securities fraud class action, the investor plaintiffs sued the defendant company and three of its principal officers, alleging that they had made a series of eleven false or misleading statements to the public, in violation of section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, 15 U.S.C. 78a et seq. Plaintiffs claimed that the false statements had the effect of artificially inflating the price of defendant's stock until the truth belatedly came out, at which time the stock price dropped and plaintiffs suffered substantial financial losses. The court held that the district court properly dismissed plaintiffs' claims arising from the alleged misstatements made on March 5, 2004 and July 26, 2004, because plaintiffs have inadequately pled scienter and falsity. However, as for plaintiffs' claims arising out of defendant's February 23, 2005 and March 16, 2005 statements, the court vacated the district court's entry of summary judgment. The court held that the securities laws prohibited corporate representatives from knowingly peddling material misrepresentations to the public, regardless of whether the statements introduced a new falsehood to the market or merely confirmed misinformation already in the marketplace. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Findwhat Investor Group, et al. v. Findwhat.com, et al." on Justia Law

The Mississippi Commission on Judicial Performance filed a Formal Complaint against Lamar County Justice Court Judge Carol Ann Bustin. The complaint charged that Judge Bustin, while serving as an attorney for David C. Lema’s ex-wife, executed a felony arrest warrant for Lema based upon an affidavit submitted by the ex-wife. The Commission and Judge Bustin jointly moved the Supreme Court to accept an agreed findings of fact and to approve the recommended sanctions: a public reprimand, a $500 fine, and assessment of costs in the amount of $100. After conducting an independent inquiry and giving careful consideration to the joint motion for approval of recommendations and the supporting brief, the Court disagreed with the recommendation of the Commission. "Because Judge Bustin abused the power of her office, acted as judge in a matter involving one of her own clients, and has engaged in similar misconduct in the past, we order a thirty-day suspension from office without pay in addition to the recommended sanctions." View "Mississippi Comm'n on Judicial Perf. v. Bustin" on Justia Law