Dentons says $32.3M malpractice verdict was 'simply wrong,’ and it will appeal
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Dentons says it will appeal a $32.3 million malpractice verdict based on its disqualification in a patent case because of work done by its Canadian branch.
Jurors in Cuyahoga County, Ohio, had found Dentons liable Feb. 13 in a suit by its former client, laser-inscribing company RevoLaze, report Law360 and Law.com. The verdict is thought to be the largest legal malpractice judgment in Ohio’s history, according to a press release from RevoLaze’s law firm.
The suit had alleged that the booting of Dentons from the case forced RevoLaze to quickly find new lawyers and impacted its leverage in settlement negotiations.
The case highlights legal issues related to Dentons’ Swiss verein structure in which more than 10,000 lawyers are associated with the law firm, according to Law.com. In a Swiss verein, multiple partnerships adopt a common brand but remain legally and financially distinct.
The malpractice suit was filed after an administrative law judge ruled that Dentons in the U.S. can’t represent RevoLaze because Dentons in Canada had performed work for RevoLaze’s adversary, the clothing company the Gap.
The judge ruled in a patent enforcement case before the International Trade Commission that alleged that the Gap and other retailers were violating RevoLaze’s patents by importing laser-abraded jeans.
Dentons maintains the judge’s ruling was wrong because, among other reasons, the Gap’s in-house counsel had provided written consent that Dentons could bring such a claim.
The International Trade Commission later vacated the disqualification decision as moot after a settlement while noting that the administrative law judge lacked sufficient evidence about Dentons’ structure to rule.
Dentons said in a statement that it acted properly and ethically, and the verdict is “simply wrong.”
“We will be vindicated on appeal in this matter,” Dentons said.
Law.com spoke with a lawyer for RevoLaze in its malpractice suit, Kristi Browne of the Patterson Law Firm. She said legal costs increased for RevoLaze after Dentons was disqualified because the new lawyers didn’t agree to caps that Dentons had accepted. A litigation funding company had been bankrolling the case under the cap agreement.
The cost of litigation led to the August 2015 settlement in the patent case, Browne told Law.com.
Here is Dentons’ full statement: “We will appeal. The verdict was simply wrong. Just as our position was vindicated on appeal by the International Trade Commission, we will be vindicated on appeal in this matter. Importantly, the jury was not asked to make any determination regarding our firm’s structure or conflicts clearance process and its decision in no way undermines the ITC’s reversal of the improper initial disqualification. The firm has a robust and sophisticated conflict clearing process that has enabled it to open tens of thousands of matters every year without incident. With regard to our former client RevoLaze, we assisted it in an enforcement action in the ITC which RevoLaze itself characterized at the time as a ‘complete success.’ We acted properly, ethically and consistent with our duties to our clients at all times.”
Seventh paragraph revised on Feb. 27 to reflect Dentons’ stance.