Cravath Fires Back in Conflict Case, Says Ex-Client is Doing Battle in Wrong Court
Responding to a former client’s claims of a conflict of interest that could potentially derail Cravath Swaine & Moore’s representation of a current client in a hard-fought $5.1 billion corporate takeover battle, the law firm says in a reply brief that ex-client Airgas Inc. is pursuing the issue in the wrong forum.
Filed Thursday in U.S. District Court for the Eastern District of Pennsylvania, the brief (PDF) says that Airgas should have moved, in an earlier-filed action in Delaware Chancery Court, to disqualify Cravath as counsel for Air Products & Chemicals, rather than seeking to take the case away from the renowned corporate forum by subsequently bringing a separate “disqualification lawsuit” against Cravath in another court elsewhere. (Airgas initially filed suit against the law firm in state court in Pennsylvania, a day after Air Products sued in Delaware, and the Pennsylvania state court action was subsequently removed by to federal court there.)
The Delaware court is set to consider the same claimed conflict that Airgas is asserting in the federal action, Cravath writes, and the Delaware case includes Air Products as a party, while the federal case does not. Additionally, the law firm argues, it would be inappropriate for a court in another jurisdiction to disqualify counsel in the Delaware case.
However, the federal court has jurisdiction to resolve remaining issues later:
“To be clear, Cravath has not requested that this court entirely abstain from adjudicating Airgas’s claims,” the brief notes. “Cravath expects that any issue not resolved by the chancery court’s decision on the disqualification issue, including Airgas’s claim for damages based on an alleged breach of fiduciary duty, would be addressed by this court thereafter on an appropriate schedule.”
Although the precise nature of Cravath’s former representation of Airgas is disputed, the law firm’s lengthy representation of Air Products—which reportedly had been ongoing for years before Airgas existed—is a good fact for Cravath, a law professor tells Reuters.
“The fact that Air Products is a long-standing client is one that weighs in Cravath’s favor,” professor Milton Regan of Georgetown University Law Center tells the news agency. “It’s not as though they dropped Airgas to represent a new, lucrative client that just appeared on the scene.”
Earlier, professor Geoffrey Hazard Jr. of the University of Pennsylvania Law School provided an expert report on Airgas’s behalf saying that Cravath has both a former-client and concurrent conflict of interest, reports the Legal Intelligencer.
Additional and related coverage:
ABAJournal.com: “Ex-Client of Cravath Battles Firm’s Current Client in Conflict Case Venue War”
Am Law Daily: “Cravath-Style Conflict Accusations Hit Blank Rome”
Legal Intelligencer: “Judge Mulls Jurisdiction for Cravath-Airgas Dispute”
