This case was widely reported, and we discussed it yesterday.  From the Decision in Ideal Steel Supply Corp. v. Beil, 20519/06 ,Decided: July 3, 2007 Justice Peter J. Kelly QUEENS COUNTY
Supreme Court

"On or about December 11, 2001, plaintiff Ideal Steel Supply Corp. retained defendant the law firm of Ross and Hardies, LLP (R&H), in contemplation of legal action against National Steel Supply, Inc., a competitor. Both Ideal and National operate stores in Queens and the Bronx, and Ideal asserts that wrongful action by its competitor cost it approximately $10,000,000. Ideal signed a retainer agreement with defendant R&H, the predecessor of defendant McGuire Woods LLP (MW) which stated, inter alia, that defendant Marshall Beil (Beil) would provide representation at the rate of $400.00 per hour. Ideal allegedly paid the defendants approximately $1,000,000 in legal fees.

Plaintiff began this action for, inter alia, legal malpractice on September 19, 2006, alleging that the defendants (1) "[u]nilaterally chose to pursue unique and novel claims in their litigation of the matter, when an expedited recovery could have been obtained pursuant to other causes of action . . . ", (2) "[f]ailed and refused to pursue other bona fide claims, by ignoring relevant case law and Facts", (3) failed to prevent costs and expenses from rising above a reasonable level, (4) made decisions that resulted in unnecessarily high fees, costs, and expenses, (5) increased hourly fees without the prior consent of the client, (6) engaged in dilatory and wasteful litigation conduct, (7) mismanaged the work of experts and litigation support consultants, (8) charged the plaintiff for resources not actually needed, and (9) violated the attorney client relationship, by, for example, revealing strategy to the adversary. The plaintiff’s attorney asserts that "[e]ssentially, the mismanagement of the federal litigation and pursuit of inappropriate claims under the civil RICO Act were part of a scheme by the defendants to bill exorbitant legal fees and costs and exclusively pursue those claims that defendant Beil found intellectually novel

Turning to the third cause of action for legal malpractice, two distinct prongs are discernable. The first pertains to the selection of only a RICO cause of action for prosecution and the second pertains to mismanagement of the RICO cause of action itself. Regarding the selection of only a RICO cause of action for prosecution, plaintiff Ideal did not adequately plead that the defendants failed to exercise the degree of skill and care commonly possessed by a member of the legal community (See, Hwang v. Bierman, 206 AD2d 360). "An attorney has broad discretion concerning . . . the theories to plead . . . " (4 Mallen & Smith, Legal Malpractice [2007 Ed], §30.8; see, Patterson v. Powell, 31 Misc 250 [AT], affd 56 App Div 624), and he is not subject to a "rule of infallibility, but is responsible to his client only for those mistakes as a pleader which indicate a lack on his part of the attainments and diligence commonly possessed and exercised by legal practitioners". (Rapuzzi v. Stetson, 160 App Div 150, 157). Although there may be several alternatives, the selection of one of many reasonable defenses or causes of action does not constitute malpractice (See, Hwang v. Bierman, supra).

In view of the history of the Anza litigation, particularly the decision rendered by the Second Circuit Court of Appeals, plaintiff Ideal cannot adequately establish that the selection of a RICO cause of action for prosecution against National was unreasonable. The "selection of one among several reasonable courses of action does not constitute malpractice". (Rosner v. Paley, 65 NY2d 736, 738; see, Dimond v. Kazmierczuk & McGrath, 15 AD3d 526; Holschauer v. Fisher, 5 AD3d 553). The court also notes that plaintiff Ideal’s complaint and opposition papers only conclusively allege that other causes of action were available; conclusory and speculative allegations do not support a cause of action for legal malpractice (See, Holschauer v. Fisher, supra; Pellegrino v. File, 291 AD2d 60).

Additionally, even if the selection of a RICO claim involved an error in judgment, such an error does not amount to legal malpractice (See, Rosner v. Paley, supra; Hand v. Silberman, 15 AD3d 167; Alter & Alter v. Cannella, 284 AD2d 138). The Anza litigation presented novel issues from its inception that ultimately had to be decided by the United States Supreme Court. Attorneys "cannot be held liable for exercising their professional judgment on a question that was not elementary or conclusively settled by authority . . . " (Town of North Hempstead v. Winston & Strawn, LLP, 28 AD3d 746, 748; see, Parksville Mobile Modular, Inc. v. Fabricant, 73 AD2d 595; Byrnes v. Palmer, 18 App Div 1, affd 160 NY 699). In sum, the recommendation by the defendants that plaintiff Ideal pursue certain litigation against National did not, under all of the circumstances, rise to the level of malpractice (See, Boulanger, Hicks, Stein & Churchill, P.C. v. Jacobs, 235 AD2d 353).

In the case at bar, the plaintiff’s allegations regarding increased expenses resulting from the defendants’ alleged mismanagement of the RICO claim are sufficient to survive a mere CPLR 3211(a) (7) motion. Whether the plaintiff’s case can withstand a motion for summary judgment is a matter not taken into consideration here (See, Shaya B. Pacific, LLC v. Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, supra)."
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