Category: Practice of Law

You Can Buy Me Dinner, But Don’t Expect to Choose My Entrée: Motion to Disqualify for Non-Party Litigation Funding Conflicts of Interest

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You can pay for the dinner, but you cannot pick when, where or what we’re eating. At least that’s what a Magistrate Judge in the District of New Jersey decided last week in Harish v. Arbit, No. CV 21-11088-EP-AME, 2025 WL 354434 (D.N.J. Jan. 31, 2025), a patent dispute that resulted in the disqualification of two law firms from representing two defendants because the defense was funded, at least in part, by a non-party with an interest in the patent.

Adversarial Standing

Plaintiff maintained that defense counsel violated N. J. Rule of Professional Conduct 1.8(f) when they represented defendants and a non-party payer. The Court held that the plaintiff, as an adversary, had standing to raise a potential conflict of interest and bring a motion to disqualify. While the Court noted that the Third Circuit had not ruled on the issue directly, “this District has held that ‘[a]dversaries, as well as former clients, may raise conflict of interest concerns.’”

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A Change Is Gonna Come — Amendments to California Summary Judgment and Summary Adjudication Procedures Take Effect January 1, 2025

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Those who litigate in California state courts, take note: Changes are coming to the state’s summary judgment statute for the first time in 20 years. Assembly Bill 2049 (AB 2049), signed into law this summer, introduces logistical changes and clarifications to the summary judgment process that attorneys should be aware of before the law takes effect on January 1, 2025.

First, AB 2049 will change the notice period — and thus the timing — of summary judgment and summary adjudication motions. Code of Civil Procedure section 437c prescribes the timeline for summary judgment and summary adjudication motions. Under the longstanding statute: notice of a summary judgment or summary adjudication motion and supporting papers needed to be served at least 75 days before the hearing, oppositions were due at least 14 days before the hearing, and replies at least five days before the hearing.

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Tort Reform Comes to Florida

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The new law should limit the overall tort liability confronted by all types of companies and individuals who find themselves facing a lawsuit in Florida. This update focuses on the changes for statutes of limitation, comparative negligence and the admissibility of evidence of medical charges at trial. Florida courts will undoubtedly see many challenges to the new law over the next few years.

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Supreme Court to Resolve Attorney-Client Privilege Split

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For the first time in 25 years, the U.S. Supreme Court is considering the scope of the attorney-client privilege in the case In re Grand Jury, No. 21-1397. The Court heard oral arguments earlier this week about when the attorney-client privilege protects communications involving both legal and nonlegal advice (dual-purpose communications).

In re Grand Jury

A grand jury subpoenaed documents from the petitioner, a tax law firm, related to a criminal investigation into the law firm’s client. In re Grand Jury, 23 F.4th 1088, 1090 (9th Cir. 2021). The law firm withheld documents that had dual-purpose communications based on the attorney-client privilege. After the government moved to compel, the district court used the “primary purpose test” to determine whether the dual-purpose communications were privileged. The court used the test to determine “whether the primary purpose of the communication [was] to give or receive legal advice, as opposed to business or tax advice.” Id. at 1091 (citation omitted). In the end, the district court ordered the law firm to produce documents to the government after redacting tax-related legal advice. When the law firm refused, the court held it in contempt, and the Ninth Circuit affirmed the contempt order.

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District of Delaware Chief Judge’s New Standing Order Requires Disclosure of Third-Party Litigation Funding

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The District of Delaware is the latest in a series of courts to require disclosure of third-party funding arrangements, a subject we have previously explored. The Chief Judge in the District of Delaware now joins other courts like the District of New Jersey and the Northern District of California in requiring these disclosures.

On April 18, 2022, Chief District Judge Colm F. Connolly of the United States District Court for the District of Delaware issued a standing order requiring litigants to disclose whether their cases are being financed by third parties. The standing order requires that, “where a party has made arrangements to receive from a person or entity that is not a party (a ‘Third-Party Funder’) funding for some or all of the party’s attorney fees and/or expenses to litigate th[e] action on a non-recourse basis,” either for “a financial interest that is contingent upon the results of the litigation” or “a non-monetary result that is not in the nature of a personal loan, bank loan, or insurance,” the party must disclose certain details of the funding relationship within 45 days of the entry of the standing order (i.e., by June 2, 2022) for existing cases, or within 30 days of the filing of an initial pleading or transfer of a new matter into the District.

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