Legal Malpractice

Ex-Client Says Kaye Scholer Discovery Errors Cost Millions

Updated: A former client of Kaye Scholer has sued the New York law firm for legal malpractice, contending that discovery errors forced it to enter into a $107 million antitrust settlement last month. It is seeking as damages the difference between $107 million and the nuisance settlement it says it otherwise would have paid.

Celanese, a chemical and plastics company, filed a complaint yesterday in federal court in Dallas contending that the law firm negligently didn’t produce hundreds of thousands of pages to plaintiffs in a multi-district polyester fibers price-fixing case. That case, in which Celanese was a defendant represented by Kaye Scholer from 2002 to 2006, was brought in federal court in North Carolina. The company says it was sanctioned by the court as a result of the discovery errors, and paid far more to settle the case than it otherwise would have done, under the threat of additional sanctions, reports the New York Law Journal.

“The negligence and malpractice of Kaye Scholer and the consequences of that negligence caused the chances of Celanese’s prevailing at trial to decrease dramatically,” Celanese says in the complaint.

Apparently anticipating the suit, the law firm filed its own complaint last week, seeking payment of legal fees and a declaratory judgment that Kaye Scholer’s work met professional standards, the legal publication reports.

Celanese is now represented by Hector Torres of Kasowitz, Benson, Torres & Friedman, which brought the malpractice suit against the law firm. In addition to Kaye Scholer, partner Michael Blechman, who is a member of the executive committee, and former special counsel Robert Bernstein are also named as defendants. A copy of the complaint (PDF) is provided by the Wall Street Journal.

Updated at 6:15 p.m., central time, to link to complaint.

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