Estrin Lawsuit Back On
- "Neither Estrin nor Eugene Driker, the American lawyer representing Gowlings in this case, returned calls seeking comment on Monday."
When a US Legal publication tried to get a quote:
- "Estrin did not return a call and e-mail message requesting comment, nor did the firm's managing partner in Toronto, Peter Lukasiewicz. The appellate attorney for Gowling, Eugene Driker of Barris, Sott, Denn & Driker in Detroit, could not be reached for comment."
I was rather shocked to be honest. All these lawyers being unavailable to make a simple comment.
I thought I should wait a bit and give the Mayor a chance to to give us some encouraging words but nothing yet. I guess he's just too busy compiling all the answers that he got from his survey from people who want to commute out West.
Thank goodness that our Mayor IS a lawyer. He’ll be able to understand all this and what it means.
It is another twist and turn in the border file which has been nothing more than twists and turns for the last six years.
The 6th U.S. Circuit Court of Appeals ruled in the following manner:
- “We hold that CenTra established genuine issues of material fact as to whether Gowlings’s simultaneous and adverse representation of Windsor and CenTra on the Bridge Plan was a conflict to which CenTra could consent, whether CenTra was adequately informed of the conflict to the extent that CenTra could have consented, and whether CenTra in fact did consent. We, therefore, hold that the district court erroneously granted summary judgment to Gowlings on CenTra’s claims of breach of contract, breach of fiduciary duties, and legal malpractice. We also hold that the district court abused its discretion in denying CenTra’s Rule 56(f) motion for discovery. For these reasons, we REVERSE the district court’s grant of summary judgment and REMAND for further proceedings consistent with this opinion.”
In other words, the Bridge Company can carry on in its lawsuit against David Estrin and his law firm, Gowlings, for acting against them on the border file. Of course, the decision of the Court does not do anything other than allow the matter to proceed on to trial. However the fact that the Bridge Company took this matter to the Court of Appeals means that they are serious in pursuing it.
I was able to find the entire decision and have posted here for you to read. http://www.scribd.com/doc/5055223/Estrinappeal
Do you want to know what is extremely ironic? Scott Jolliffe is the Chair and Chief Executive Officer of the Gowlings firm. He was also the Chair of the Canadian Bar Association committee dealing with lawyer conflicts of interest. That committee just issued their report recently “Conflicts of Interest: Final Report, Recommendations and Toolkit.” Fate has a strange sense of humour.
You ought to read the Appeals decision for yourself. I trust that Scott will too. It is not that hard to read and understand.
Here are some interesting excerpts from the Court decision:
- It turns out that Windsor and CenTra were both employing the same law firm, Gowling Lafleur Henderson, LLP (“Gowlings”): while Windsor hired Gowlings to help the city oppose the second span, CenTra hired Gowlings to help the company raise money to fund the construction of that same span. Although CenTra wanted to expand its connection to Windsor, it was hoping to do so with an additional bridge, not by sharing legal counsel; thus, CenTra sued Gowlings for damages, alleging breach of contract, breach of fiduciary duties, and legal malpractice.
- in November 2005, CenTra sought Gowlings’s assistance in creating a $700- to $800-million bond offering by which to finance the twinning of the Ambassador Bridge. Shortly thereafter, Windsor employed Gowlings to help the city oppose the Bridge Plan.
- Estrin claimed to be even more clueless: “Until a few weeks before Centra filed this lawsuit, I was completely unaware that Centra, DIBC, or CTC had retained Gowlings on any other matter.
- CenTra submitted to the district court a declaration from an expert who stated that “I simply do not see how a law firm can offer sound professional service simultaneously to a client it is helping to build a bridge and to a client it is helping to block or delay construction of the bridge. This is not even a close question.” Thus, CenTra presented a genuine issue of material fact as to whether this conflict was one to which it wascapable of giving consent, and the district court’s grant of summary judgment was erroneous.
- The case at hand is not a case where the firm was working on only unrelated matters; instead, while trying to help one client, CenTra, procure funding for the Bridge Plan, Gowlings was working for another client, Windsor, to oppose the Bridge Plan. Gowlings was working for two adverse parties on the same matter, and for that clear-cut conflict, CenTra’s general knowledge that Gowlings has previously represented parties with adverse interests to CenTra is not enough to inform CenTra adequately with regards to the direct conflict of interest in Gowlings’s representation of two adverse clients on the Bridge Plan.
- If the vague and general information that CenTra possessed regarding prior, different conflicts was enough, then the client would bear the burden of identifying and understanding the full scope of any conflict of interest. It is not the client, however, to whom the various codes of conduct have given this responsibility; “[t]he affirmative duty here rests not with [the clients] but with [the law firm] and its attorneys.”
- Gowlings does not claim that it provided to CenTra more specific information regarding the current conflict on which informed consent could have been based, because Gowlings itself admits that it was not aware until 2006 of the conflict with respect to the Bridge Plan.
- Gowlings claims that Canada would have required CenTra to pay for an environmental assessment even if Estrin had not urged the U.S. Coast Guard also to demand an assessment. Gowlings’s argument, however, is disingenuous. Estrin’s letter urged the U.S. Coast Guard to demand an environmental assessment because, according to Estrin, Canada’s environmental assessment was not adequate. J.A. at 43 (Estrin Letter at 9) (“In Canada, however, there are only a minimal prescribed requirements [sic] for this type of environmental examination.”). Thus, on the basis of Estrin’s own arguments, it is reasonable to assume that CenTra was forced to expend greater resources on a more robust environmental assessment than it would have if it were required to meet only Canada’s standards.
- Under the Seventh Amendment, the plaintiff is entitled to a jury trial on any disputed issues of material fact. After proper instructions, it will be up to the jury to determine the nature of the legal representation undertaken by the defendants and whether civil liability is foreclosed by the Michigan Rules of Professional Conduct stating that the Rules “do not '. . give rise to a cause of action . . . or for damages . . . .” The District Court should set the case for trial giving the parties a reasonable period of time to complete discovery.
Causing problems for a $1 billion project can cost serious sums of money. Who knows what a US jury might do to a Canadian law firm too. Remember the Estrin/Francis bravado before, when this first started. Strange, they are not talking much now:
- Estrin said Tuesday the lawsuit was "another dubious attempt" by bridge owner Matty Moroun "to reach his objectives."
- "It's really not Gowlings they are going after here," Estrin said. "It's the City of Windsor and the best interests of the people. I've been hired to protect their best interests. They are attempting to stop me and our firm from doing that.
- "It's an unfortunate waste of energy."
- "Every firm tries its best, but sometimes the conflict screen breaks down," Estrin said. "In this case there is no conflict."
- "Our position is there is no conflict," Estrin said. "When it was brought to our attention we basically fired them as a client. (The lawsuit) in my view is clearly an attempt to intimidate me and our firm from representing the city. It's an attempt to get me off the case.
Obviously it didn't work."
- Mayor Eddie Francis called the timing of the lawsuit "predictable." He said the border crossing debate is at a critical juncture, with the city ramping up its opposition in recent months to the bridge company's bid for a twin span.
"The timing on this speaks volumes," Francis said. "It also speaks to the effectiveness of our strategy to protect residents of Windsor. When people resort to these type of tactics and setting up roadblocks, it's an indication we are being effective.
"The reason (the bridge company) is attempting to do this is they want the city and law firm to be distracted away from what they are trying to accomplish."
I expect that there may be some sweating going on after the Court of Appeals made its decision. The Court said this too by the way which could be very troublesome for Gowlings:
- "There are some conflicts of interest to which a client may not consent. Thus, the district court was only partially correct when it stated “that a client may impliedly waive its consent to an attorney’s conflict of interest,” J.A. at 589 (Order at 6), because it ignored the question of whether Gowlings’s simultaneous and adverse representation of CenTra and Windsor was in fact a conflict to which CenTra could consent. We hold that there is a genuine issue of material fact as to whether Gowlings’s conflict of interest with regards to the Bridge Plan was one to which CenTra could consent...
The district court broadly stated that a client may consent to a conflict of interest; however, it is not true that all conflicts are consentable. Whether a conflict is consentable depends upon the facts of the case. According to the commentary to Michigan’s Rule 1.7, a conflict is nonconsentable “when a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances.”
To come back to the Mayor, he has his defence against any citizen criticism already prepared. In January, 2007, several months after the Bridge Company lawsuit started, the CAO said:
- "Skorobohacz said the money paid to Estrin includes consultants he hired on a subcontract basis. "He gets the report, evaluates it and then provides a comment" and recommendation to council. "As projects progress, David will keep us apprised...
Skorobohacz said it has been money well spent and not "out of the ordinary" compared to other cities. "Windsor has challenges because of its location," Skorobohacz said. "Is the investment of a David Estrin warranted? Yeah, it's more than warranted" to make sure the city's interests are protected."
Watch for something similar to be trotted out by our Mayor/lawyer to justify the hiring of Estrin.
What comes next? Who knows. I will bet though that the fun has just begun.