Ex-client’s lawsuit alleges DLA Piper revealed ‘strident double-dealing’ in mistakenly sent email
June 18, 2020
A lawsuit filed by a former client against DLA Piper on Monday alleges that the law firm revealed a conflict of interest in a mistakenly emailed invoice.
The lawsuit by propane supply company Ferrellgas Partners says the invoice showed that DLA Piper did research for another “mystery client” that appeared to have interests adverse to Farrellgas, report Law.com and Law360.
Although Ferrellgas doesn’t know the identity of the other client, the company suspects that the client was involved in a hostile takeover bid for Ferrellgas.
“This strident double-dealing by Ferrellgas’ trusted counsel shocks the conscience,” according to the suit, filed in state court in Kansas.
Ferrellgas had hired DLA Piper in July 2018 for advice in a possible restructuring of debt used to purchase a transportation subsidiary. The law firm’s involvement in the restructuring effort “dropped off” after November 2018, although neither party formally ended the representation, the suit says.
The next year, a variety of entities sought a hostile takeover of Ferrellgas, the suit says.
In November 2019, Ferrellgas received the mistakenly emailed invoice for $14,000 in legal services for research on Ferrellgas for the unknown client, the suit says. The invoice was signed by DLA Piper partner Thomas Califano, who is the global co-chair of the firm’s restructuring group. Ferrellgas had also been working with Califano and his team, the suit says.
After inquiries by Ferrellgas, DLA Piper returned the company’s client file. The law firm told Ferrellgas that an internal investigation had found no evidence that any of the materials were accessed in connection with any work for another client.
Ferrellgas wasn’t satisfied with the explanation.
“DLA’s breach of its fiduciary duties is obvious,” the suit says. “DLA put itself on both sides of Ferrellgas’ restructuring efforts, having both (a) received highly confidential information from Farrellgas and advised it on its restructuring strategy, and (b) accepted the representation of an undisclosed entity with an adverse interest in Ferrellgas’ restructuring.”
The suit also alleges that DLA Piper breached contract obligations in its engagement letter.
The suit seeks an injunction to prevent any misuse of Ferrellgas’ confidential information. The suit also requests damages that include disgorgement of Ferrellgas’ fees and compensation for the costs or redressing DLA Piper’s conduct.
DLA Piper did not immediately respond to a request for comment.