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NY Appellate Court Manages Litigation Issues Stemming From Pilfered E-Mails

Jan 29

Parnes v. Parnes,___ N.Y.S.2d ___, 2011 WL 102664 (N.Y. App. Div. 3d Dept. Jan. 13, 2011)

In a divorce proceeding, the wife’s counsel sought to depose the husband’s lawyer based on e-mails between the husband and his attorney that the wife had obtained, mostly improperly. The husband’s lawyer successfully moved to quash the deposition, suppress use of the e-mails, and to disqualify the wife’s counsel for using privileged information. The New York Appellate Division affirmed the trial court’s decision quashing the deposition and prohibiting use of the e-mails but reversed the disqualification of the wife’s attorney.

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New York High Court Declines to Broaden Liability of Third-Party Professionals for Client Fraud

Jan 28

Kirschner v. KPMG LLP, ___ N.E.2d ___, 2010 WL 4116609 (N.Y. 2010)

Under New York law, the fraud of corporate insiders will be imputed to the corporate entity regardless of the insiders’ intent or the degree to which the corporation benefited from the fraud. There is a limited exception to this rule when the fraud is against the corporation itself. In cases where fraud is imputed, the corporation is barred by the doctrine of in pari delicto from shifting responsibility for the fraud to third-party agents such as law firms or accounting firms.

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Ninth Circuit Sanctions Lawyers in High-Profile Case

Jan 27

In re Girardi, ___ F.3d ___, 2010 WL 2735731 (2010)

Relying on federal statutes and rules of professional conduct, the U.S. Court of Appeals for the Ninth Circuit sanctioned a group of attorneys who, in seeking to enforce a foreign judgment, made false statements to the court. The sanctions included monetary sanctions of $390,000 and ranged from a reprimand to a six-month suspension depending on the mental state, experience, and degree of involvement of each attorney.

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In-House Attorney Not Protected by Whistleblower Statute Because Reporting Wrongdoing Was Part of His Job Duties

Jan 26

Kidwell v. Sybaritic, Inc., ___N.W.2d___, 2010 WL 2517682 (2010)

A plurality of the Minnesota Supreme Court held that when an in-house lawyer reports wrongdoing to the client in order to pull the client back into compliance, the purpose behind such reports is not to expose illegality and therefore such attorneys are not afforded whistleblower protection.

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