Legal Ethics

8th Circuit Sides With Dorsey & Whitney in $900K Malpractice Case


After a decade of litigation, Dorsey & Whitney won a ruling (PDF) Thursday from the St. Louis-based 8th U.S. Circuit Court of Appeals that overturns earlier federal court judgments holding the law firm liable in a failed casino lending deal.

Because the more than two dozen banks that sued the well-known Minnesota-based law firm were third parties in the $12 million bond deal arranged by the Dorsey firm’s client, a now-defunct investment bank, the law firm didn’t have a duty to look out for the third-party participants’ interest, according to American Lawyer article reprinted by New York Lawyer (reg. req.).

The 8th Circuit based its ruling, which applies Minnesota state law, on both state supreme court precedent and the appellate court’s prediction of how the state supreme court would have ruled in the just-decided appeal.

“Demonstrating that an ethics rule has been violated, by itself, does not give rise to a cause of action against the lawyer and does not give rise to a presumption that a legal duty has been breached,” the majority explains.

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