Acceleration

Judge Bucklo’s Avoiding The Hot Potato Ethical Questions in this Sanctions Motion but Sends the Messenger Magistrate to Tell it’s Mashed Up Tale

The Hot Potato Rule is a serious matter and Goodwin Law and their attorneys Tom Hefferon, Matt Sheldon et al should have been sanctioned.

LIT COMMENTARY

We’re updating the Hot Potato Case in Illinios (there’s a sister case in Georgia) as at August 26, 2020 and lo-and-behold, the sanctions order has dropped. Not by US District Judge Bucklo, no, it’s been delegated to the Magistrate Judge to do the ‘dirty work’ for the court. And he’s a newly appointed magistrate at that (March 2019).

For example, MJ Harjani does not take into account the ‘Hot Potato Rule’ which states quite clearly, even if the lawyers withdraw, it does not protect them from misconduct charges and sanctions.

The ‘Hot Potato’ Rule is a serious matter and Goodwin Law  and their attorneys Tom Hefferon, Matt Sheldon  et al should have been sanctioned.

But of course, the judicial wheels of corruption has resulted in another coverup for big law and the magistrate judge has ignored the ethical issues completely in his opinion. I mean the magistrate judge even discounts the district judges own words (see video below). His argument is beyond absurd.

For example, here’s a case which outlines his grave errors, El Camino Resources, Ltd. v. Huntington National Bank, 623 F. Supp. 2d 863 (W.D. Mich. 2007).

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

 

COUNTY OF COOK,
Plaintiff,
Case No. 14 C 2280
v.
Magistrate Judge Sunil R. Harjani
BANK OF AMERICA CORPORATION,
et al.
Defendants.

 

ORDER

Plaintiff Cook County has brought a motion for sanctions against Goodwin Procter LLP. Specifically, Plaintiff contends that Goodwin’s representation of several confidential witnesses (CWs) and Defendants was a clear conflict of interest, and resulted in Plaintiff bringing a motion to disqualify Goodwin and the expenditure of expert fees to support its motion. According to Plaintiff, Defendants’ conduct is sanctionable under 28 U.S.C. § 1927 and the Court’s inherent authority to sanction a party for bad faith conduct.

Section 1927 authorizes a court to sanction an attorney who “multiplies the proceedings unreasonably and vexatiously” by requiring the attorney to “satisfy personally” the excess costs (including fees) “reasonably incurred because of such conduct.” A finding of subjective bad faith on the part of the offending attorney will support the imposition of sanctions under § 1927, but such a finding is not necessary; “objective bad faith” will also support a sanctions award. Dal Pozzo v. Basic Mach. Co., 463 F.3d 609, 614 (7th Cir. 2006)(collecting cases). “If a lawyer pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound, the conduct is objectively unreasonable and vexatious. To put this a little differently, a lawyer engages in bad faith by acting recklessly or with indifference to the law, as well as by acting in the teeth of what he knows to be the law ” Boyer v. BNSF Ry. Co., 824 F.3d 694, 708 (7th Cir. 2016) (citing In re TCI Ltd., 769 F.2d 441, 445 (7th Cir. 1985)). “Simple negligence, on the other hand, will not suffice to invoke section 1927.” Id. at 708. It bears repeating that “[a] court should not impose sanctions on a party that loses an argument, as long as the argument was not entirely groundless.” Philos Techs., Inc. v. Philos & D, Inc., 802 F.3d 905, 917 (7th Cir. 2015). Similarly, the Court’s inherent power permits a court to sanction attorneys “for actions taken in bad faith, vexatiously, wantonly, or for oppressive reasons.” Johnson v. Cherry, 422 F.3d 540, 548–49 (7th Cir.2005) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 45–46 (1991)).

Plaintiff’s motion is without merit.

First, Plaintiff’s motion to disqualify Goodwin Procter was denied as moot by the district judge. This is because, while Goodwin opposed the motion and briefed the issue, it also chose to withdraw from representing the CWs and retain separate counsel for the CWs. This Court managed the procedure for the retention of new counsel, which resulted in mooting Plaintiff’s motion and its original request for sanctions. Thus, it is important to recognize that the district judge did not make any findings on the issue of a conflict of interest in favor of Plaintiff. Moreover, the district judge’s questions and comments at a motion hearing on the matter should not be viewed any other way — it is elementary that part of a judge’s task at a hearing is to ask questions of counsel to test and explore arguments. Questions and comments are not findings. Thus, Plaintiff cannot rely on the district judge’s comments or order on its motion in advocating that it was victorious.

Second, Goodwin’s opposition to Plaintiff’s motion was not objectively unreasonable or vexatious. Plaintiff and Goodwin vigorously contested each other’s positions. But neither party’s position was unreasonable. Plaintiff contended that Goodwin could not represent the CWs as they were adverse to Goodwin’s existing client – the bank – because certain CWs had provided new declarations that allegedly retracted their former statements made to Plaintiff’s counsel. Defendant, on the other hand, asserted that the CWs were interviewed voluntarily, when there was no attorney-client relationship, obtained the declarations, and then later offered to represent the CWs (who were former bank employees) with conflict waivers, given the possibility that the CWs could provide testimony in the future. Goodwin further asserted that a conflict had not materialized, given that the CWs could adhere to their new declarations rather than their old ones. Beyond that, there was a colorable argument as to whether the CWs declarations were entirely inconsistent or rather simply provided more detail on the CWs’ prior statements. Both parties supported their positions with declarations from expert witnesses. The Court has reviewed both declarations, and these expert witnesses laid out in detail why they believed their position was a correct interpretation of the applicable ethical rules, whether a conflict of interest existed, and whether Goodwin’s representation was permissible. Both declarations carefully outline the ethical issues involved with supporting citations. Neither declaration is objectively unreasonable, frivolous, reckless, or made in bad faith. Frankly, if any opinion went too far, it would be Plaintiff’s expert, who brashly stated: “Prima facie evidence exists that Goodwin Procter suborned perjury from their confidential witnesses by obtaining false declarations under penalty of perjury[.]” Doc. 391. at §3. It is hard to accept such a bold statement given that the factual record on the matter was minimal, nor is it clear that the witness was qualified to render such an opinion. Ultimately, the district judge would have decided which position was more persuasive if she had ruled on the motion, but for present purposes, nothing in Goodwin’s filing or declaration demonstrates bad faith, unreasonable or vexatious conduct, or a groundless argument. See Harriston v. Chicago Tribune Co., 136 F.R.D. 482, 485 (N.D. Ill. 1991) (denying sanctions under 1927 because, while Plaintiff lost a motion to disqualify counsel, the motion was not “so lacking in legal or factual basis as to be implausible.”). Beyond that, four of the CWs had not provided any prior declarations and the only declarations provided were to Goodwin, which raises a colorable issue as to whether there was any potential conflict of interest at all for these four CWs.

Third, the fact that Goodwin decided to withdraw from its representation of the CWs is of no moment. Goodwin was within its rights to choose to avoid protracted litigation on the issue by looking for a simpler solution, which in this case was retaining separate counsel for the CWs. As Goodwin has represented, it sought to avoid a distraction from the merits of the case by continuing to contest Plaintiff’s motion and expending resources on the matter. That position is not akin to a surrender and a victory for Plaintiff, but more akin to a calculated decision to compromise and move forward.

Fourth, it is not clear that Defendants unreasonably or vexatiously multiplied any proceedings. Indeed, it was Plaintiff that brought the disqualification motion, Plaintiff who hired an expert witness and expended $88,278 for its expert declaration, and it is Plaintiff that is continuing to litigate this issue through this sanctions motion when the issue has been resolved. See GNP Commodities Inc. v. Wotton, 1991 WL 28222 (N.D. Ill. Feb. 25, 1991) (“[t]he Court would note that the present motion for sanctions itself has multiplied these proceedings. The motion has forced the Court to expend substantial time revisiting a motion on which the Court never issued an opinion and that has long been moot.”). Furthermore, Goodwin could have continued to fight the issue through advocating for a ruling by the district judge, but sought to conserve additional resources by voluntarily choosing to withdraw from the representation. Goodwin’s conduct appears to be reducing, not multiplying, the proceedings.

Plaintiff’s motion for sanctions against Goodwin Procter LLP [493] is denied.

 

SO ORDERED.

Dated:  August 25, 2020

Sunil R. Harjani
United States Magistrate Judge

Docket for case County Of Cook v. Bank of America Corporation (1:14-cv-02280)
District Court, N.D. Illinois

United States District Court
Northern District of Illinois – CM/ECF LIVE, Ver 6.3.3 (Chicago)
CIVIL DOCKET FOR CASE #: 1:14-cv-02280

County Of Cook v. Bank of America Corporation et al
Assigned to: Honorable Elaine E. Bucklo
Referred to: Honorable Sunil R. Harjani
Cause: 42:405 Fair Housing Act
Date Filed: 03/31/2014
Jury Demand: Both
Nature of Suit: 443 Civil Rights: Accommodations
Jurisdiction: Federal Question

Date Entered # Docket Text

08/25/2020 519 MINUTE entry before the Honorable Elaine E. Bucklo: In light of the status hearing set before Magistrate Judge Harjani, Status hearing set for 8/28/2020 is stricken and reset for 11/19/2020 at 9:45 a.m. (to track the case only, no appearance is required). The parties shall file a joint written status report by 11/12/2020. The court will enter a scheduling order in response to the status report. Mailed notice. (mgh, ) (Entered: 08/25/2020)

08/25/2020 518 ORDER Signed by the Honorable Sunil R. Harjani on 8/25/2020: Plaintiff’s motion for sanctions against Goodwin Procter LLP 493 is denied. (See Order For Details) Mailed notice(lxs, ) (Entered: 08/25/2020)

08/24/2020 517 MINUTE entry before the Honorable Sunil R. Harjani: Status hearing set for 8/27/20 is reset to 10/22/2020 at 9:15 a.m. by telephone. Status report due is due by 10/16/2020. The Court has reviewed the parties’ joint status report 516 . Written discovery is closed but the parties have asked that the deadline to complete depositions be extended to September 30, 2020. Given the parties’ significant amount of work in moving discovery forward over the last few months, the Court will grant an extension to complete depositions to September 30, 2020. All remaining dates stand. The Court will issue a written ruling on the pending motion for sanctions 493 in the near future. Mailed notice (lxs, ) (Entered: 08/24/2020)

08/21/2020 516 STATUS Report (Joint) by BAC Home Loans Servicing LP, Bank of America Corporation, Bank of America N.A., Countrywide Bank FSB, Countrywide Financial Corporation, Countrywide Home Loans Inc., Countrywide Warehouse Lending LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Captial Inc., Merrill Lynch Mortgage Lending, Inc. (Sheldon, Matthew) (Entered: 08/21/2020)
08/19/2020 515 NOTICE by BAC Home Loans Servicing LP, Bank of America Corporation, Bank of America N.A., Countrywide Bank FSB, Countrywide Financial Corporation, Countrywide Home Loans Inc., Countrywide Warehouse Lending LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Captial Inc., Merrill Lynch Mortgage Lending, Inc. Supplemental Declaration of Justin A. Dahl (Attachments: # 1 Exhibit A)(Sheldon, Matthew) (Entered: 08/19/2020)

08/17/2020 514 MINUTE entry before the Honorable Elaine E. Bucklo: Motion to appear pro hac vice 513 is granted. Mailed notice (reg) (Entered: 08/17/2020)
08/15/2020 513 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 150, receipt number 0752-17321744. (Briggs, Carleton) (Entered: 08/15/2020)
08/03/2020 512 REPLY by County Of Cook to response in opposition to motion, 507 , MOTION by Plaintiff County Of Cook for leave to appeal the 6/15/20 Order 501 (Evangelista, James) (Entered: 08/03/2020)

07/30/2020 511 MINUTE entry before the Honorable Elaine E. Bucklo: Motions to appear pro hac vice 508 509 are granted. Mailed notice <Attachments (reg) (Entered: 07/30/2020)

07/28/2020 510 REPLY by Plaintiff County Of Cook to motion for sanctions, 493 Reply Memorandum in Further Support of of its Motion (Wexler, Kenneth) (Entered: 07/28/2020)

07/24/2020 509 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 150, receipt number 0752-17248370. (Perry, Alan) (Entered: 07/24/2020)

07/23/2020 508 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 150, receipt number 0752-17244574. (Toran, Leslie) (Entered: 07/23/2020)

07/20/2020 507 RESPONSE by BAC Home Loans Servicing LP, Bank of America Corporation, Bank of America N.A., Countrywide Bank FSB, Countrywide Financial Corporation, Countrywide Home Loans Inc., Countrywide Warehouse Lending LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Captial Inc., Merrill Lynch Mortgage Lending, Inc.in Opposition to MOTION by Plaintiff County Of Cook for leave to appeal the 6/15/20 Order 501 (Sheldon, Matthew) (Entered: 07/20/2020)
07/14/2020 506 RESPONSE by BAC Home Loans Servicing LP, Bank of America Corporation, Bank of America N.A., Countrywide Bank FSB, Countrywide Financial Corporation, Countrywide Home Loans Inc., Countrywide Warehouse Lending LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Captial Inc., Merrill Lynch Mortgage Lending, Inc.in Opposition to MOTION by Plaintiff County Of Cook for sanctions against Goodwin Procter LLP and Memorandum in of Law in Support Thereof 493 (Attachments: # 1 Exhibit A)(Sheldon, Matthew) (Entered: 07/14/2020)

07/14/2020 505 MINUTE entry before the Honorable Elaine E. Bucklo: At the parties’ request, the court sets the agreed briefing schedule on plaintiff’s motion to certify the June 15, 2020 order for interlocutory appeal Pursuant to 28 U.S.C. § 1292(b) 501 as follows: Defendants to respond by 7/20/2020. Plaintiff to reply by 8/3/2020. Ruling before Honorable Elaine E. Bucklo on 9/11/2020 at 9:45 a.m. (to track the case only, no appearance is required). Mailed notice. (mgh, ) (Entered: 07/14/2020)

07/10/2020 504 ORDER Fifth Amended General Order 20-0012 IN RE: CORONAVIRUS COVID-19 PUBLIC EMERGENCY Signed by the Chief Judge Rebecca R. Pallmeyer on July 10, 2020. This Order does not extend or modify any deadlines set in civil cases. No motions may be noticed for in-person presentment; the presiding judge will notify parties of the need, if any, for a hearing by electronic means or in-court proceeding. See attached Order. Signed by the Honorable Rebecca R. Pallmeyer on 7/10/2020: Mailed notice. (Clerk3, Docket) (Entered: 07/10/2020)

06/30/2020 503 STATUS Report (Joint) Concerning DKT. No. 497 by BAC Home Loans Servicing LP, Bank of America Corporation, Bank of America N.A., Countrywide Bank FSB, Countrywide Financial Corporation, Countrywide Home Loans Inc., Countrywide Warehouse Lending LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Captial Inc., Merrill Lynch Mortgage Lending, Inc. (Sheldon, Matthew) (Entered: 06/30/2020)

06/22/2020 502 NOTICE of Motion by James M. Evangelista for presentment of motion for leave to appeal 501 before Honorable Elaine E. Bucklo on 7/15/2020 at 09:45 AM. (Evangelista, James) (Entered: 06/22/2020)

06/22/2020 501 MOTION by Plaintiff County Of Cook for leave to appeal the 6/15/20 Order (Attachments: # 1 Memorandum of Law in Support)(Evangelista, James) (Entered: 06/22/2020)

06/16/2020 500 MINUTE entry before the Honorable Sunil R. Harjani: At counsel’s request, Defendants’ response to Plaintiff’s Motion for Sanctions Against Goodwin Procter LLP 493 is due by 7/14/2020; reply is due by 7/28/2020.Mailed notice (lxs, ) (Entered: 06/16/2020)

06/15/2020 499 ORDER signed by the Honorable Elaine E. Bucklo on 6/15/2020. Mailed notice. (mgh, ) (Entered: 06/15/2020)

06/15/2020 498 MINUTE entry before the Honorable Elaine E. Bucklo: Plaintiff’s motion to amend complaint and memorandum of law in support thereof 481 is denied. Enter Order. Plaintiff’s motion for sanctions against Goodwin Procter LLP and memorandum of law in support thereof 493 is referred to Magistrate Judge Harjani. Motion hearing set for 7/15/2020 is stricken and is to be re-noticed before the assigned magistrate judge. Mailed notice. (mgh, ) (Entered: 06/15/2020)

06/15/2020 497 MINUTE entry before the Honorable Sunil R. Harjani: The Court has reviewed the County’s settlement offer and the Defendants’ response. Counsel for both parties are ordered to meet and confer by telephone, discuss the letters, and determine whether they wish to continue settlement discussions. As it currently stands, the Court does not see that a settlement conference with the Court would be worthwhile given the current positions, but the parties are to discuss whether they wish to engage in further letter exchanges with revised offers and responses to narrow the gap. The parties shall submit a status report with an update on the meet and confer conference by June 30, 2020. Mailed notice (lxs, ) (Entered: 06/15/2020)

06/11/2020 496 MINUTE entry before the Honorable Sunil R. Harjani: Status hearing set for 8/27/20 at 9:15 a.m. by telephone, at this time, for case tracking purposes. The Court will enter a separate order if an appearance is necessary after viewing the status report due 8/21/20. Mailed notice (lxs, ) (Entered: 06/11/2020)

06/10/2020 495 REPLY by Plaintiff County Of Cook to motion to amend/correct,, 481 Plaintiff’s Reply Memorandum in Support of Motion to Amend Complaint (Wexler, Kenneth) (Entered: 06/10/2020)

This Court is fully aware of the “changes” in the “legal world” and attempts to stay abreast of them and deal with cases in an up-to-date fashion. Keeping that in mind, however, does not somehow lead this Court to believe that “changes” also mean adopting a set of principles and ethics for “mega corporations” and “monster law firms” which is something less than that imposed on small companies and lesser-size law firms.

Rule 1.7 stands as is for everyone.

This Court notes that, if anything, large law firms have an even greater responsibility to incorporate satisfactory computer conflicts check systems simply because of their size and the fact the lawyers in these firms are not able to manually check their client lists for potential conflicts.

Lemelson v. Apple Computer, Inc., 28 U.S.P.Q.2d at 1419

(rejecting SWS’s approach of a size- dependent application of ethical rules regarding disqualification).

Docket for related case Cobb County v. Bank of America Corporation (1:15-cv-04081)
District Court, N.D. Georgia

U.S. District Court
Northern District of Georgia (Atlanta)
CIVIL DOCKET FOR CASE #: 1:15-cv-04081-LMM

Cobb County et al v. Bank of America Corporation et al
Assigned to: Judge Leigh Martin May
Cause: 42:3601 Fair Housing Act
Date Filed: 11/20/2015
Jury Demand: Plaintiff
Nature of Suit: 443 Civil Rights: Accommodations
Jurisdiction: Federal Question

 

Date Entered # Docket Text
08/28/2020 97 NOTICE by Cobb County, DeKalb County, Fulton County, Georgia re 87 Response in Opposition to Motion of Supplemental Authority (Attachments: # 1 Exhibit A (Opinion City of Oakland v. Wells Fargo & Co.,))(Evangelista, James) (Entered: 08/28/2020)

U.S. District Court
Northern District of Georgia (Atlanta)
CIVIL DOCKET FOR CASE #: 1:15-cv-04081-LMM

Cobb County et al v. Bank of America Corporation et al
Assigned to: Judge Leigh Martin May
Cause: 42:3601 Fair Housing Act
Date Filed: 11/20/2015
Jury Demand: Plaintiff
Nature of Suit: 443 Civil Rights: Accommodations
Jurisdiction: Federal Question

Date Entered # Docket Text

08/04/2020 96 SIXTH AMENDMENT TO GENERAL ORDER 20-01 RE: COURT OPERATIONS UNDER THE EXIGENT CIRCUMSTANCES CREATED BY COVID-19 AND RELATED CORONAVIRUS. Signed by Judge Thomas W. Thrash, Jr. on 08/03/2020. (mmc) (ADI) (Entered: 08/04/2020)

07/13/2020 95 FIFTH AMENDMENT TO GENERAL ORDER 20-01 RE: COURT OPERATIONS UNDER THE EXIGENT CIRCUMSTANCES CREATED BY COVID-19 AND RELATED CORONAVIRUS. Signed by Judge Thomas W. Thrash, Jr. on 7/10/2020 (rvb) (ADI) (Entered: 07/13/2020)

07/02/2020 94 FOURTH AMENDMENT TO GENERAL ORDER 20-01 RE: COURT OPERATIONS UNDER THE EXIGENT CIRCUMSTANCES CREATED BY COVID-19 AND RELATED CORONA VIRUS. Signed by Judge Thomas W. Thrash, Jr. on 07/01/2020. (mmc) (ADI) (Entered: 07/02/2020)

06/26/2020 93 RESPONSE re 92 Notice (Other),, filed by Cobb County, DeKalb County, Fulton County, Georgia. (Evangelista, James) (Entered: 06/26/2020)

06/12/2020 92 NOTICE by BAC Home Loans Servicing, LP, Bank of America Corporation, Bank of America, N.A., Countrywide Bank, FSB, Countrywide Financial Corporation, Countrywide Home Loans, Inc., Countrywide Warehouse Lending, LLC, Merrill Lynch & Co., Inc., Merrill Lynch Mortgage Capital Inc., Merrill Lynch Mortgage Lending, Inc. re 81 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (Attachments: # 1 Exhibit A – 06-01-2020 U.S. Supreme Court decision from the case, Thole v. U.S. Bank, N.A.)(Custer, William) (Entered: 06/12/2020)

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