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Monday, April 6, 2009

JUDGE OF THE DAY: Federal Magistrate Valerie Cooke, Slams Nasty Lawyers

Judge Lays On Hefty Sanctions and Sentences Two Lawyers to 300 Hours of Pro Bono
The Recorder by Evan Hill - April 6, 2009

SAN FRANCISCO, CA - A federal magistrate judge in Nevada sanctioned a Los Angeles firm, two of its lawyers and their client on Tuesday for what she called "scorched earth litigation tactics" in a trade secrets case. Magistrate Judge Valerie Cooke of Nevada District Court imposed roughly $20,000 in sanctions on Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor. She handed down $102,205 in fines to Deborah Klar, an erstwhile attorney at the firm, and another $20,441 to Teri Pham, still with Liner Grode. Cooke also ordered Klar and Pham to perform a combined 300 hours of pro bono work, a punishment that one ethics expert said was unique.

"The court concludes that the conduct of the Liner firm and its attorneys, Ms. Klar and Ms. Pham, was willfully reckless, intended to harass, done for an improper purpose, and was suffused with bad faith," Cooke wrote in her 54-page ruling. Cooke wrote that she would publish the order (.pdf) for maximum deterrence, and, pointing specifically to Klar and Pham, also referred the matter to the Nevada and California state bars. The magistrate gave the firm and lawyers until Friday to object to the district court and stayed her order in the meantime. Her ruling was one of at least two last week referred to the California State Bar by judges: Los Angeles-based Irell & Manella was criticized in a Central District ruling Wednesday. Klar and Pham represented Dennis Montgomery, a self-described inventor and software developer from Nevada who became involved in litigation against a business partner in 2006.

Montgomery's first attorney, Michael Flynn, withdrew from the case following a dispute over legal fees and used a provision in Nevada law to claim a "retaining lien" on Montgomery's files until he was paid. That set off a multistate effort by Klar and Pham to obtain the files, one that eventually ended in their sanctioning in Montgomery v. eTreppid Technologies, 06-0056.  Cooke wrote that she was convinced that Klar and Pham's actions "were part of a litigation strategy designed to remove both the client file and fee dispute from this court's jurisdiction, deny Mr. Flynn the disputed attorney's fees, and force him to expend significant attorney's fees defending his interests in three other forums."

She ordered Klar to perform 200 hours of pro bono work, and Pham to complete 100, within two years. Jerome Fishkin, a Walnut Creek lawyer who specializes in legal ethics, said he had never heard of a judge using pro bono work as a sanction. One issue "is the anomaly of saying, 'This attorney's been bad, so we're going to punish them by making them do work for people who can't afford it,'" Fishkin said. He also said he was unsure how the judge will ensure the attorneys complete all 300 hours of their assignment. Cooke's order lays out a schedule for Klar and Pham to first submit a plan for their pro bono work, then report back twice with declarations logging their progress. Klar, reached on Friday, declined to comment, and Pham did not return a phone message Friday afternoon. Stuart Liner, Liner Grode's managing partner, said he is "extremely disappointed and surprised" by the order and that the firm plans to object by Friday.He said Klar left the firm roughly five months ago and would not discuss whether her departure was related to the case. A day after Cooke's order,a Central District judge in California came down hard on Irell & Manella for failing to get a waiver from Broadcom Corp.'s chief financial officer during a stock option backdating investigation.

According to the ruling, the firm was hired to conduct Broadcom's internal investigation of its stock option granting, and at the same time represented CFO William Ruehle in two shareholder suits on the same topic. "Prior to undertaking these representations of clients with adverse interests, Irell failed to obtain Mr. Ruehle's informed written consent," Judge Cormac Carney wrote, adding that he was also referring Irell to the State Bar for "appropriate discipline." The U.S. attorney's office wants to use some statements Ruehle gave during the internal investigation in its prosecution of him, an effort Carney rebuffed in last week's order in U.S. v. Ruehle, 08-00139. In response to Carney's ruling, Irell issued a statement saying the firm believes his ruling was in error. "The disclosures the firm made to the audit committee and the company's auditors at Ernst & Young were entirely proper," the firm said. According to data provided to The Recorder by Russell Weiner, a deputy chief trial counsel with the State Bar, courts were the source of between 4 and 6 percent of the referrals made to the bar between 2004 and 2007. Weiner said the overwhelming majority of complaints his office handles, about 95 percent, concern practices with 10 or fewer lawyers.


jim in bayside said...

I wish more judges would behave like this brave judge, and just not bow to the dirty attorney bar every second of the day.

Anonymous said...

While not all the facts are in this case, this is another example of new law firm trying for no reason to stiff the outgoing attorney for their legitimate fees. Attorneys must stop allowing their clients and greed cause them to be used for this purpose. When an attorney works for his fee he is entitled to it. If there are issues with the services provided there are ample legitimate ways to address fee disputes, poor service, failure to prosecute, etc.. Attorneys should not use there new incomming position as new counsel to deny the outgoing attorney his fee as here. I say Kudos to the Judge.

Anonymous said...

We need more judges like this.

Anonymous said...

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g said...

It's very depressing for the average American when they learn how bad the vast majority of judges are.

Jude Mary Lou Villar, Judge Gerald Rosenberg, and Elizabeth Grimes all seem to rule in ways that defy logic and suggest corruption.

Samantha Jessner and Judge Martinez in criminal courts builidng in Los Anglees also don't rule according to law but don't seem as corrupt as the ones mentioned-- Still they are not doing the right thing.

I am so dispirited that the judicial system(At least in Los Angeles) is a dirty disaster.

Anonymous said...

federal judge magistrate in nevada must be stopped they abuse their power all too often they are way more corrupt than people think and i will not stop gathering info to bring it to the attention of nevada

Anonymous said...

Judge Maria Stratton in Los Angeles is a very very corrupt judge. She uses her court to punish those who demand some rights. She will impose cruel and unusual punishment to please those she thinks will vote for her. Maria Stratton is a vile and cruel woman.

Anonymous said...

Judge Maria Stratton used the mental health courts against those who dared not plea bargain when innocent. Shame Shame Shame on Judge Maria Stratton. She is a sick and vicious criminal.

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