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Firm Disqualified for Conflict, Remarks to Newspaper

By William Vogeler, Esq. on April 05, 2018 | Last updated on March 21, 2019

Note to self: Don't criticize a client in the press.

Second note to self: Do a better conflict-check next time.

That's the sticky-note version of what happened at Pillsbury Winthrop Shaw Pittman in FMS Investment Corp. v. The United States. For a BigLaw firm, a judge said, the lawyers should have known better.

"Troubling" Conflict

Disqualifying Pillsbury in a $400 million contract matter, Judge Thomas C. Wheeler said the law firm created a "troubling" conflict of interest. The firm represented a company against one of its own clients.

Pillsbury claimed it could not have foreseen that the clients would have adverse interests in bidding for student debt collection awards. The firm, representing Continental Service Group, protested an award to Performant Recovery -- its client in other matters for years.

To make things worse, partner Todd Canni told the Washington Post that it didn't make sense that Performant won the award. He said the company had "marginal" ratings.

Canni later said that he didn't know Performant was a client, but the judge didn't buy it. He granted Performant's motion to disqualify Pillsbury from representing ConServe in the litigation.

"Misleading and Puzzling"

The judge didn't let the firm go easily. He said Pillsbury violated ethics rules of the American Bar Association.

The firm never attempted to obtain Performant's consent to represent a competitor, he said, and didn't even inform its client of the conflict. Pillsbury said it "never represented Peformant or its subsidiary in any protest matters," and the company waited too long to assert a conflict of interest.

The judge said that argument was "dubious, misleading, and puzzling."

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