Panel Rejects Class Action Against Clifford Chance $100K in Sanctions by Shannon P
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PAGE 5: YOUNG LAWYER THE OLDEST LAW JOURNAL IN THE UNITED STATES 1843-2011 PHILADELPHIA, THURSDAY, MARCH 31, 2011 VOL 243 • NO. 62 $5.00 Attorney Hit With Panel Rejects Class Action Against Clifford Chance $100K in Sanctions BY SHANNON P. DUFFY alleged role in the by holding that a lawyer’s advice to a U.S. Courthouse Correspondent fraud. corporation cannot be the basis of a class “Because plain- action fraud claim by investors who were BY SHANNON P. DUFFY n the wake of the scandalous $1.7 bil- tiffs do not contend never aware of the advice. U.S. Courthouse Correspondent lion collapse of Diagnostic Ventures Clifford Chance’s Scirica, who was joined by 3rd Circuit I Inc., investors have won the right to alleged role in mas- Judge Thomas L. Ambro and visiting U.S. A federal judge has pursue class action fraud claims against terminding the District Judge John E. Jones III of the imposed sanctions of the firm’s auditors at Deloitte & Touche, fraudulent 10-Q Middle District of Pennsylvania, adopted more than $100,000 but lost their bid to bring class claims was disclosed to the the reasoning of the 2nd Circuit in reject- on attorney Wayne A. against lawyers from Clifford Chance. public, they cannot ing similar claims against lawyers from SCIRICA Schaible of McCann The 3rd U.S. Circuit Court of Appeals invoke the presump- Mayer Brown. Schaible & Wall for has ruled that the auditors were properly tion” of reliance necessary to bring a In Pacific Investment Management Co. causing a mistrial in sued under a fraud-on-the-market theory fraud-on-the-market claim, Chief U.S. v. Refco, the 2nd Circuit held that Mayer February 2010 that for allegedly issuing “clean” audit re- Circuit Judge Anthony J. Scirica wrote Brown could not be sued by a class of derailed a multiweek ports that hid DVI’s improper accounting in his 58-page opinion in In re DVI Inc. investors for allegedly participating in trial of a wrongful practices. Securities Litigation. the drafting and disseminating of Refco’s death suit. MCLAUGHLIN But the appellate court held that the The decision upholds the class certifica- fraudulent public filings. U.S. District Judge Mary A. McLaughlin same theory could not be used to sue the tion rulings of U.S. District Judge Legrome The 2nd Circuit panel held that the had ordered the sanctions in a May 2010 Clifford Chance lawyers for allegedly ad- D. Davis that had sparked appeals from plaintiffs were asking for too broad a read- opinion in Ferguson v. Valero Energy Corp. vising DVI to omit negative information both the plaintiffs and the auditors. ing of the U.S. Supreme Court’s 2008 de- that included no dollar figure, but instructed from its public filings with the Securities Legally, the decision is significant be- cision in Stoneridge Investment Partners the defense team to submit its bills. & Exchange Commission because inves- cause it promises to limit the potential li- v. Scientific-Atlanta Inc. because “nothing Sanctions continues on 10 tors had no knowledge of the law firm’s ability of law firms in securities litigation Class Action continues on 9 SEPTA Settles Trademark Infringement Suit Against Law Firm INSIDE THE LEGAL BY GINA PASSARELLA com, and use a new phone number, case on the terms we were seeking. They www.thelegalintelligencer.com Of the Legal Staff 855-BUSLAW1. won’t use the [Stylized ‘S’] mark and the “The defendants believe they had the website comes down, so I think that our SEPTA has settled its trademark in- ability to keep using the website but felt client is pleased with the result.” Experts & Services fringement suit against personal injury that it was in the best interest of their As part of SEPTA’s suit, the transit 1 1 firm Mednick Mezyk & Kredo over the business to get back to their business,” authority argued Mednick Mezyk had firm’s use of a SEPTA bus on its web- Leace said. advertised in local papers using SEPTA’s Classified site, www.MySeptaLawyer.com, and the SEPTA has agreed to a transition colors and trademarks. Pollack said the 12 firm’s phone number, 888-SEPTA-LAW. period in which Mednick Mezyk can settlement also includes an agreement As part of the settlement, which is still change over the website and phone num- that the firm will no longer use any of Public Notices awaiting signatures though the terms ber, he said. SEPTA’s trademarks, such as the SEPTA 1 3 have been agreed upon, Mednick Mezyk Jeffrey S. Pollack of Duane Morris logo or stylized “S.” He said the agree- will take down the website and change represented SEPTA in the case and said ment is finalized and is just awaiting Legal Listings its phone number, the firm’s attorney, his client’s goals for the litigation were signatures. 1 5 Benjamin Leace of Ratner Prestia, said. met. Leace said there were no damages at In their place, the firm will create a new “The settlement was good for our cli- issue in the settlement and no money website, www.thebusaccidentlawyer. ent,” he said. “It basically resolved the SEPTA continues on 9 Postal ID on Page 8 2 • THE LEGAL INTELLIGENCER THURSDAY, MARCH 31, 2011 VOL P. 2154 PEOPLE IN THE NEWS Sunoco Logistics. The presentation titled “The Importance of Proper Documentation” was addressed to residents, fellows and interns of multiple SPEAKERS specialties from the Philadelphia area. Robert M. Cavalier, Ryan discussed preventable causes for managing partner of legal disputes involving the medical record Lucas & Cavalier, and proactive steps to consider in order to led a roundtable avoid being drawn into litigation. discussion titled “Trends in Lawyers Professional Liability ANNOUNCEMENTS Due to a Deteriorating Levy Baldante has moved its New Jersey of- Economy.” fices to 89 Haddon Ave., Suite D, Haddonfield, The presenta- N.J. It has retained its phone number from its CAVALIER tion was made at the previous location. Council for Litigation Management’s an- nual conference in New Orleans March 24. Each year, Community Legal Services of Philadelphia publishes a case law outline Daniel F. Ryan III, partner at O’Brien of Disability Under the Social Security Act, & Ryan, recently spoke on the medical with emphasis on the 3rd District. and legal issues of documentation at a For more information, call Richard Members of event sponsor Deeb Petrakis Blum & Murphy of Philadelphia gathered in seminar for health care professionals in Weishaupt at 215-981-3726 or e-mail front of the “Dreams of Freedom” exhibit at the National Museum of American Jewish Philadelphia. [email protected]. • History for the Arts and Business Council of Greater Philadelphia’s private “Business Backstage” event March 10. Museum president and CEO Michael Rosenzweig welcomed guests and council volunteers before they enjoyed guided tours of the interactive exhibit on Independence Mall. Pictured, from left, are Arthur Armstrong and Frank Murphy of All potential items for People in the News Deeb Patrakis; Rosenzweig; Karen Davis of the Arts and Business Council; and Stephen Frishberg, Inez Markovich, Joseph Blum and Colin Knisely of Deeb Petrakis. should be addressed to Stephanie Baum at The Legal Intelligencer, Gavigan has more than 30 years’ expe- ADDITION rience in labor and employment law and 1617 JFK Boulevard, Suite 1750, Phila., PA 19103 Teresa Gavigan has joined Blank Rome human resources administration. as of counsel in the employment, benefits She joins the firm from Sunoco where Fax: 215-557-2301, e-mail: [email protected] and labor group and will be based in the she most recently served as vice-president, Philadelphia office. human resources and administration for VOL P. 2155 THURSDAY, MARCH 31, 2011 THE LEGAL INTELLIGENCER • 3 REGIONAL NEWS N.J. Justices Asked: Can a Judge Change His Mind? 3rd Circuit Privilege BY MICHAEL BOOTH Ruling Worries New Jersey Law Journal Defense Attorneys t’s said that intelligence allows for a change of mind, but a judge who re- BY SUE REISINGER I thought and reversed his own summary Corporate Counsel judgment ruling after hearing new evidence has caused consternation enough to demand Corporate executives may need to be more the state Supreme Court’s intervention. careful about what they say to outside coun- At issue, in Lombardi v. Masso, argued sel during internal company probes. And Monday, is whether Burlington County, N.J., they’ll want to make sure that the lawyers Judge Michael Hogan acted properly in dis- they talk to are representing them personally, missing claims against all but one defendant and not just their company. and then — after a proof hearing on damages Photos by Carmen Natale That’s the implication of a 3rd U.S. Circuit — hauling them back into court a year later, RIVERA-SOTO ALBIN RABNER Court of Appeals ruling last week in the case saying the case was more complicated than of Ian Norris, one-time CEO of the Morgan he had thought. long since thought they were out of the case. the conclusion that the dismissed defendants Crucible Co. in the United Kingdom. The Appellate Division held the law-of- Justice Barry Albin suggested the court should be brought back into the case. At trial in federal district court in the-case doctrine didn’t apply, since “once was merely being asked to determine whether “Then we should disregard the extraneous Philadelphia last July federal prosecutors the judge lost confidence in his own ruling, Hogan’s initial grant of summary judgment material and give no deference to his ruling?” were able to use the company’s outside coun- regardless of how he came to that epiphany, was appropriate.