Biglaw Firm Sued By A Fortune 500 (Former) Client

High-stakes deals have high-stakes consequences when things go pear-shaped.

It’s tough doing business with China. Hell, we have an entire column that reflects this new reality. So it makes sense that a sophisticated corporation like Whirlpool would seek the advice of a trusted Biglaw firm when it has questions about its Chinese imports.

In 2010, when Whirlpool wondered whether the Chinese-imported aluminum handles used on its appliances were potentially subject to antidumping penalties by the Department of Commerce, they engaged Drinker Biddle and partner William Randolph “Randy” Rucker. At the time, Commerce was investigating Chinese extruded aluminum product makers and distributors amid allegations of predatory pricing, selling the aluminum products below value.

According to a malpractice lawsuit filed Tuesday in Cook County, Illinois against Drinker Biddle and Rucker, Rucker advised Whirlpool that the aluminum handles were not subject to any penalties. The Cook County Record summarizes the allegations in the complaint:

Whirlpool asserts “Rucker and Drinker Biddle hold themselves out to be experts in the field of U.S. customs and trade law,” so Whirlpool said it had no reason to doubt Rucker’s opinion when he told the appliance maker that Commerce Department notices regarding the alleged dumping practices surrounding the imported Chinese extruded aluminum products did not apply to Whirlpool’s door handles.

Whirlpool’s complaint cites a Sept. 9, 2010, email from Rucker to a Whirlpool customs analyst, who had asked two days earlier “whether Whirlpool should begin to deposit the estimated countervailing duties required for goods subject to the Sept. 7, 2010, Commerce Department notice.”

In the email, Rucker purportedly “advised Whirlpool that Whirlpool’s ‘final finished door handles that are made from extruded aluminum would not be covered by the scope of the investigation,’ and thus were not subject to countervailing or antidumping duties.”

Except that apparently turned out to not be true:

However, two years later, after other similar repeated assurances from Rucker and continued importation of those door handles from China, Whirlpool said the Commerce Department notified the company in May 2012 the door handles were, in fact, “subject to the antidumping and countervailing duty notices and orders” and regulators would seek to order Whirlpool to pay “substantial cash deposits of estimated antidumping and countervailing duties on future” imports and the goods the company had imported after Sept. 7, 2010.

Whoopsie. Well, this is why Biglaw folks get paid so much money — high-stakes deals have high-stakes consequences when things go pear-shaped.

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UPDATE (2:51 p.m.): We have received the following statement from Drinker Biddle: “Drinker Biddle is confident that when the facts are known, a court will find that it has fully met its professional obligations.”

Whirlpool sues lawyer for malpractice after company hit with federal ‘antidumping’ penalties over Chinese door handle imports [Cook County Record]

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