Bankruptcy, Benchslaps, Biglaw, Duane Morris

Bankruptcy Judge Benchslaps A Biglaw Firm -- Hard

This bankruptcy judge is mad as hell, and he's not going to take this anymore.

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UPDATE (11/2/2015, 3:40 p.m.): Please note the significant UPDATE at the end of this post. The sanctions order discussed in this post was interim in nature and ultimately vacated.

Which federal court generates the best benchslaps? I have my own personal favorites. There’s the Seventh Circuit, home of Judge Richard Posner and Judge Frank Easterbrook, who don’t suffer fools gladly. There’s the Ninth Circuit, stomping grounds of Judge Alex Kozinski, who also has a low tolerance for foolish — or unethical — conduct by counsel. (Fellow fans of Judge Kozinski and the Ninth Circuit, you’re cordially invited to this event on April 19.)

But beyond the big circuit courts, the U.S. Bankruptcy Court for the Southern District of Florida has to be up there. It generated one of the best benchslap stories ever, back in 2007, after Judge Laurel Myerson Isicoff didn’t respond well to being referred to by a Biglaw partner as “a few French fries short of a Happy Meal.”

On Friday, a different bankruptcy judge in the same court lashed out at a different Biglaw firm, as reported by the Daily Business Review:

U.S. Bankruptcy Judge John Olson bashed Duane Morris on Friday during a sanctions hearing for two Miami partners in a dispute over Plantation’s shuttered Fashion Mall.

Olson issued an interim sanction in January barring Duane Morris partner Lida Rodriguez-Taseff from practicing in the Southern District of Florida’s bankruptcy court for 90 days. At that time, he also issued an order against fellow partner Kevin Vance, who faced a similar penalty over an electronically filed court document that contradicted the judge’s oral instructions.

“The tone of Duane Morris’ pleading in this case reflects what I would conceive of as a self-satisfied smugness, full of self-congratulatory blather — all to the effect that the firm is a great corporate citizen who did nothing wrong in this case,” the Fort Lauderdale judge said from the bench Friday. “Duane Morris may be a great corporate citizen in some of the markets in which it practices. Its conduct and attitude here is that it neither cares about being or being seen as a responsible corporate citizen in the Southern District of Florida.”

Ouch. What happened?

A draft order requested by Judge Olson got majorly mangled. The incorrect draft order got filed electronically under the logon of partner Kevin Vance (who, it turns out, didn’t really have substantive involvement in this matter). Here’s Duane Morris’s account of how that transpired:

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Duane Morris attorneys said two paralegals inadvertently botched the filing and used Vance’s credentials without his knowledge….

David Pollack, a shareholder at Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami, who represented Duane Morris, said paralegals Rebecca Guillou and Dawn Perez inadvertently botched the filing. The paralegals used Vance’s credentials without his knowledge to upload documents he had not drafted or reviewed, Pollack said.

Guillou accepted responsibility in a statement to the court.

“Somebody gave her the keys to the Ferrari,” Olson said at Friday’s hearing. “She had no clue what she was doing, and she should never have touched them, right?”

“Yes,” Pollack conceded. “It was a mistake.”

Oh, those pesky paralegals! First they make a billion-dollar blunder, and now this.

But lawyers — in this case, lead partner Lida Rodriguez-Taseff — can’t escape responsibility so easily. You are responsible for training and supervising your paralegals, and you are responsible for any errors they make. Indeed, Judge Olson didn’t react well to Duane Morris’s playing of the blame game:

“The firm represents that its errors in this case were the result of pure incompetence and not malevolence. It was of course, by all appearances, perfectly willing to throw Ms. Guillou under the bus knowing full well that I would never sanction a paralegal,” he said. “As for the senior partner who directed that her underlings upload as agreed an order that was neither agreed nor consistent with the court’s ruling—indeed directly contrary to the court’s ruling—I have been informed of no sanction which the firm has imposed on Ms. Rodriguez-Taseff, giving me the distinct impression the firm’s oligarchs enjoy impunity.”

Biglaw oligarchs generally do enjoy impunity — within the confines of their firms. When in court, the judge reigns supreme. And Judge Olson was more than happy to send a message to the “oligarchs” of Duane Morris:

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Olson had kinder words for [partner Kevin] Vance. He discharged the order against the attorney, calling him the victim of Duane Morris’ mistakes.

“Mr. Vance, your law firm owes you a significant apology for putting you in this position,” Olson said. “My recollection when I practiced law was when law firms owed a significant apology to one of their partners, they knew how to express it in tangible financial terms. If your firm hasn’t done that, shame on them.”

Benchslaps for one partner, a bonus for another?

For his part, Judge Olson claims that he doesn’t enjoy playing disciplinarian: “This is not a lot of fun. This is not what I like to do for a living.”

But is that truly the case? Back in 2011, some lawyers wondered if Judge Olson might be a bit of a judicial diva, according to the South Florida Business Journal:

U.S. Bankruptcy Judge John K. Olson has had a tumultuous 18 months, raising questions about whether he’s a source of trouble or if he’s a victim of bad luck.

Since April 2010, Olson has ordered two people arrested, ordered sanctions or sanction hearings on three attorneys, and resisted two recusal requests. A higher court also overturned his decision on a major case that involved some of Wall Street’s top law firms.

All of that has occurred as Olson became engaged to and then married attorney Steven Fender in one of the first gay marriages of a federal judge.

Here’s the Fender/Olson New York Times wedding announcement. Steven Fender is more than twenty years younger than Judge Olson (and looks it). Well played, Your Honor!

P.S. We reached out to Duane Morris for comment but have not heard back yet. If and when the firm comments, we’ll update this post with any statement.

UPDATE (1:38 p.m.): If you’d like to get a clearer sense of what exactly happened here, flip to the next page to read the Duane Morris affidavits.

UPDATE (11/2/2015, 3:40 p.m.): The interim sanctions order discussed in this story was vacated by Judge Olson on September 25, 2015. Therefore, neither Duane Morris nor any of its lawyers or staff were ever officially sanctioned by the court (because the original sanctions order, which was interim in nature, was vacated).

Bankruptcy Judge Bashes Duane Morris [Daily Business Review]
Bankruptcy Judge Olson is dogged by controversy [South Florida Business Journal]
Steven Fender and John Olson [New York Times]
Judge sees ‘self-congratulatory blather’ in BigLaw brief [ABA Journal]

Earlier: Mayer Brown & Simpson Thacher Make Epic Screwup
ATL Practice Pointers: Don’t Insult the Judge in Open Court
HappyMealGate: An Update on the Fry Guy

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