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Posted: March 26, 2015

Second Circuit Affirms Sanction of Law Firm that Refused to Withdraw

On March 11, 2015, the Second Circuit issued a decision in Boies, Schiller & Flexner LLP v. Host Hotels & Resorts, Inc., 14-2949, affirming an EDNY decision sanctioning a law firm for refusing voluntarily to withdraw from representing a litigant despite “a clear conflict of interest” based on its “earlier, substantially related representation of” an opposing party.

In Boies, Schiller & Flexner, the defendant demanded that a law firm withdraw from representing an opposing party because the law firm previously had represented the defendant. The law firm refused. The defendant moved to disqualify and sanction the law firm. The EDNY granted the motion. The Second Circuit affirmed, explaining:

The district court’s findings and review of the record support its conclusion that [the law firm] acted “without a colorable basis” for maintaining it had no conflict of interest until it was faced with the motion to disqualify. The court’s finding that [the law firm] provided to its outside ethics counsel an unreasonably narrow description of its work for [the defendant] is itself sufficiently indicative of bad faith. And the court made other factual findings, including that: [the law firm] accepted the . . . engagement without reviewing its billing records or files pertaining to its prior representation of Host; represented to Host and its outside counsel that it had no conflict before completing its review of its files; filed the . . . complaint before completing its internal document review and production of documents to [the defendant]; and, willfully refused to recognize the obvious conflict.

In sum, contrary to [the law firm]’s argument, the court concluded [the law firm]’s conduct was far, far worse than mere negligence.

(Internal quotations and citations omitted). Because motions to disqualify often are tactical, it is easy to understand why the law firm resisted disqualification. Still, we are all under an independent obligation to assess whether a conflict exists and, where the conflict becomes apparent, to withdraw.

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