Jurisdiction in Federal District Court…harks back to the first few weeks of law school.  Well, there’s diversity…and…and federal question.  So, a legal malpractice case arising from a patent transaction…state court or federal district court?

Many the removed case has been found to have federal jurisdiction, but this Nebraska Case says that it may be brought in State Court.  Here is the case.  Can someone explain why this decision was not written by a Federal District or Circuit Court? 

Here is a convoluted intelectual property – patent legal malpractice case. Thelen Reid answers, and with its answer, raises more questions.  Here, from Law.Com:

"Thelen argued that the company "and/or" third parties contributed to the IP losses and that IVI waived the alleged conflicts of interest. The firm also said the claims are barred by the statute of limitations.

Thelen acknowledged that an associate reassigned an IVI patent to a Gardiner company and that an alleged Gardiner company replaced an IVI subsidiary as a party to a research agreement with Johns Hopkins University. However, Thelen’s lawyers wrote, the latter change was made "pursuant to instructions from e-Smart," another IVI subsidiary.

IVI alleged that Thelen withdrew from representing it in a suit against Gardiner when his counsel demanded the firm do so because of its alleged concurrent representation of both parties. Thelen only confirmed receiving the letter from Gardiner’s counsel and later withdrawing. "

Criminal Defense practitioners enjoy a special dispensation in the legal malpractice world.  Plaintiff there must be able to allege [in New York] actual innocence.  One need not allege freedom from wrong in the civil end of things.

In Hitham Abuhouran, Plaintiff-Appellant, -v.- Asher E. Lans, et al., Defendants-Appellees.

06-2857-pr UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT  the 2d CC goes to great lengths to distinguish between a potential claim in civil legal malpractice v. criminal legal malpractice. "Under New York law, to state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, a plaintiff must allege his innocence or a colorable claim of innocence of the underlying offense, for so long as the determination of his guilt of that offense remains undisturbed, no cause of action will lie. This rule has been consistently applied to alleged malpractice occurring outside of the actual trial, where the representation arises out of the criminal proceedings. The showing of innocence is unnecessary, however, where the representation arises out of civil proceedings, even if malpractice in the civil proceedings eventually led to an associated criminal prosecution."

"Here, Abuhouran alleged that he retained Jackson & Nash to "assign[] defense lawyers," "negotiate[e] with appell[ate] [c]ounsel," and to "attempt[] to meet with King Hussein, late King of Jordan, in efforts to ease the harsh sentence that was [previously] imposed" after Abuhouran had pleaded guilty to criminal charges. This representation plainly arose out of the criminal prosecution and is not the result of a prior civil representation. Thus, to succeed, Abuhouran would have had to show innocence or a colorable claim of innocence. See Carmel, 511 N.E. 2d at 1128. Because Abuhouran failed to allege his innocence in the amended complaint or in any of the subsequent proposed amended complaints, the district court did not abuse its discretion in denying the motions to amend the complaint as futile or in denying [**4] the motion for reconsideration. Additionally, the district court properly dismissed the complaint for failure to state a cause of action. "

In this Bankruptcy-Legal Malpractice Case In re Monahan Ford Corp. of Flushing, Debtor. Richard J. McCord, as Chapter 7 Trustee of the Estate of Monahan Ford Corp. of Flushing, Plaintiff -against- Jaspan Schlesinger Hoffman, LLP, Defendant.

Case No. 02-23134-CEC, Chapter 7, Adv. Pro. No. 04-1496-CEC

UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF NEW YORK

the Trustee in Bankruptcy brought an action against defendants "The trustee for a Chapter 7 debtor asserted claims against a law firm for legal malpractice in their representation of the then-Chapter 11 debtor-in-possession. The trustee filed a motion for partial summary judgment as to all issues except damages and the firm filed a cross motion for summary judgment. "

Of specific interest is the folling rendition of the "but for" rule:

"However, even if [*13] an attorney’s conduct was negligent, the requirement that a plaintiff show that but for the negligence it would have not been injured, sets a "high bar" to proving that the attorney committed legal malpractice. Littman Krooks Roth & Ball v. N.J. Sports Prods. Inc., Case No. 00 CIV. 9419 (NRB), 2001 U.S. Dist. LEXIS 12677, 2001 WL 963949, at *3 (S.D.N.Y. Aug. 22, 2001). This last element "seeks to insure a tight causal relationship exists between the claimed injuries and the alleged malpractice, and demands a nexus between loss and injury even closer than that required by the proximate cause prong." Sloane v. Reich, Case No. 90 Civ. 8187 (SS), 1994 U.S. Dist. LEXIS 2851, 1994 WL 88008, at *3 (S.D.N.Y. Mar. 11, 1994). "

A recent 3d Department Case gives a well reasoned, and well explained discussion of when the statute of limitations starts to run in legal malpractice situations where the attorney seeks to be relieved.  The Third Department has a unique case, Aaron v. Roemer  [discussed in Deep v. Boies, which cuts against the grain.  In most cases the statute starts to run from the date of a court order relieving the attorney, but in Aaron the time started several days earlier.  There has always been some tension in trying to assimilate this case.  Here the court explains:

"This case is distinguishable from Aaron v Roemer, Wallens & Mineaux (272 AD2d 752 [2000], lv dismissed 96 NY2d 730 [2001]). There, this Court held that the continuous representation doctrine did not extend to formal termination of representation by court order. But, in that case, counsel disclosed confidential information in its motion to withdraw, the client failed to respond by a court-imposed deadline to object to withdrawal and the client then wrote to the court consenting to withdrawal, noting the irretrievable breakdown of the relationship. The court granted the initial withdrawal motion based upon the client’s late response and a finding of grounds warranting withdrawal (see id. at 753-754). The actual entry of the order there was more of a ministerial act. No trust and confidence remained between the parties, and counsel apparently did not provide any legal advice after filing the motion to withdraw. Here, the federal court denied the initial withdrawal motion and ordered defendants to continue their representation. Defendants apparently fulfilled that obligation by communicating with opposing counsel and advising plaintiff concerning the language of the preliminary injunction. Thus, the continuous representation doctrine tolled plaintiff’s time to file this action to three years from November 4, 2002, if defendants’ representation on that date was related to the specific subject matter underlying the alleged malpractice. [*4] "

Law.Com reports that:

"A former tech client of Thelen Reid Brown Raysman & Steiner has filed a malpractice complaint against the firm and one of its partners and contends the firm concealed that it was simultaneously working for a key competitor.

Delaware-based IVI Smart Technologies Inc. and two subsidiaries claim that Thelen, led by San Jose, Calif., partner David Ritchie, "actively assisted" the competitor in the repeated theft of intellectual property resulting in an alleged drop in the companies’ market capitalization from $200 million to $20 million, according to the complaint.

"This is a case about the deceit, divided loyalties, and gross violations of professional standards and fiduciary duties by Thelen Reid Brown Raysman & Steiner," the three companies claim in the suit, filed June 12 in New York’s Southern District federal court.

A call to Thelen’s attorneys in the case was referred to a firm spokesman who said, "We generally do not comment on ongoing litigation, but we believe the claims made in the lawsuit are without merit and we will vigorously defend against the allegation." The firm has not yet responded to the suit.

IVI and its subsidiaries, e-Smart Technologies Inc. and Biosensor LLC — all of which develop fingerprint verification technologies — allege in the complaint that Thelen helped siphon their IP to competitor Michael Gardiner and his associates and related companies.

The complaint says Thelen represented IVI beginning in 2004. Patricia Douglas, a lawyer representing Gardiner in a separate action filed by e-Smart, said Thursday that she and the other two attorneys representing him had cited the concurrent representation in asking Thelen to withdraw from representing e-Smart, which Thelen did on Jan. 30, 2007.

E-Smart hired Thelen, according to the complaint, to protect its IP in negotiating a manufacturing agreement with Gardiner and his company, A-Card.

Walter Olson at Overlawyered brings us this reminder of the evolution of medical malpractice and legal malpractice.  They spring from the same nexus, but move on to different outcomes, rules, and principals.  Could this be because judges decide the law for doctors and lawyers differently?

"In a key victory for plaintiffs and their lawyers, the Massachusetts Supreme Court has for the first time adopted the “loss of a chance” doctrine, which allows plaintiffs to recover money even without having to show that it was more likely than not that the charged medical negligence made the difference in their recovery or survival. (Denise Lavoie, “Doctor held liable for a ‘loss of chance’”, AP/Boston Globe, Jul. 24). When Medical Economics surveyed the field two years ago, they found that about half the state had accepted the more liberal doctrine, which runs counter to the Anglo-American “more likely than not” prerequisite for establishing causation. More on the inexact and contradictory standards used in such cases here.

Readers of this site will not be the least surprised that American courts have shown little or no interest in extending the “loss of a chance” doctrine for the benefit of plaintiffs in legal malpractice cases filed against attorneys whose inattention might have (but probably didn’t) deprive their clients of a favorable outcome in court proceedings. "

The Law Profession Blog reports a New Mexico case which intersects with the collateral estoppel question of legal malpractice and attorney fee arbitrations.  Is legal malpractice a compulsory counterclaim to an attorney fee suit? 

"The New Mexico Supreme Court held that a legal malpractice action need not be brought as a compulsory counterclaim to an action brought by the law firm assserting a charging lien against the former client. The law firm had agreed to a settlement of the underlying litigation, purportedly without the client’s consent. The trial court found that the law firm had sufficient authority to settle and ordered the settlement enforced over the client’s objection.