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Morgan Lewis on Trial Over Advice

Did erroneous advice from Morgan Lewis & Bockius get a client in hot water for violating the U.S. trade embargo with Cuba? That is the issue in a trial that got underway Friday in the firm's home city of Philadelphia. Two brothers, Dan and Stefan Brodie, founders of Purolite Corp., allege they were criminally prosecuted for following the firm's advice that they were free to trade with Cuba. Bloomberg reports that in opening arguments Friday, a lawyer for the brothers, Marc E. Kasowitz, asserted, "Morgan Lewis's malpractice, sloppy work and their bad advice cost Purolite and the Brodies and it cost them severely." But the lawyer for Morgan Lewis, William O'Brien, countered, "The advice we gave was proper and it was correct. "They made millions of dollars. That's what this case was about."

According to a report on this case after it was filed in 2004, the lawsuit claimed that even after the U.S. Customs Service launched an investigation in 1997 into the company's trade with Cuba, a now-retired Morgan Lewis partner, Edward Dennis, continued to advise the company that it had a viable defense. Morgan Lewis was "particularly riled" by the allegations against Dennis, who retired in 2002 "after a distinguished career," reported, quoting a statement issued by the firm: "The advice given to our former client throughout our representation, the substance of which is misrepresented in the complaint, was correct in all respects. The accusations against our former partner, Ed Dennis, are particularly offensive and unfounded."

Morgan Lewis later succeeded in defeating portions of the lawsuit. In January 2005, a judge dismissed the plaintiffs' claims for legal malpractice and breach of fiduciary duties, saying they had been filed outside the statute of limitations, reported. He let the lawsuit go forward on a breach of contract claim. While Morgan Lewis had argued that the contract claim should be dismissed on public policy grounds because the brothers had pleaded guilty to federal charges, the judge disagreed, concluding "that the public interest is served where attorneys are held accountable for providing their clients with bad legal advice when those clients suffer harm as a result of that advice."

Posted by Robert J. Ambrogi on January 14, 2008 at 12:39 PM | Permalink | Comments (0)


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