Law Firms

Judge cites Pillsbury partner's remarks to newspaper in disqualifying firm from representation

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Pillsbury Winthrop Shaw Pittman can no longer represent a company that collects overdue student loans following comments made by a Pillsbury partner to the Washington Post.

Federal Claims Judge Thomas Wheeler disqualified Pillsbury from representing Continental Service Group Inc., also known as ConServe, in litigation challenging an Education Department contract decision. Bloomberg Law and the National Law Journal have coverage of Wheeler’s March 29 opinion.

The Pillsbury partner, Todd Canni, was representing ConServe when he told the Washington Post he couldn’t understand why a competitor company won a government contract to collect overdue loans. The competitor, Performant Financial Corp. was “was not a highly rated” company, Canni said.

Though Canni says he didn’t know it at the time, the competitor company was a Pillsbury client in other matters.

Canni told the Post that the Education Department “will need to explain how suddenly these ratings changed so significantly” to allow Performant “to leapfrog over so many other qualified” companies. Performant once had financial ties to Education Secretary Betsy DeVos, according to the Post story. A department spokesman said DeVos had no knowledge or involvement in the debt collection contract.

As a result of the “troubling course of events,” Wheeler said, Pillsbury can’t continue to represent ConServe.

Performant had sought the disqualification in the litigation by 19 plaintiffs challenging the contract award. The company is represented by Hogan Lovells in the case.

Pillsbury sought to continue representation, arguing in a March 19 filing that it had taken steps to ensure that none of Performant’s client confidences would be shared with lawyers representing ConServe.

Initially both companies had failed to secure a contract, and they were on the same side of the litigation before the Education Department took “corrective action” and gave the contract to Performant, Pillsbury told the court.

But Wheeler said Canni’s comments nonetheless “created a situation where he has stunted Pillsbury’s ability to effectively and zealously advocate on ConServe’s behalf.” Pillsbury or Canni would have to “think twice” about any remarks to the court criticizing Performant because of Canni’s earlier criticism, Wheeler said.

Pillsbury gave this statement to the Natoinal Law Journal: “As addressed fully in our papers and declarations submitted to the court, Pillsbury had represented ConServe for over 13 months in this protest before the [U.S. Government Accountability Office], Court of Federal Claims and U.S. Court of Appeals for the Federal Circuit. When the parties were realigned after the award of January 2018 and a conflict arose, Pillsbury, with the advice of specialized outside counsel, immediately implemented remedial measures and determined that it should move forward in the representation of ConServe. It is important to note that Pillsbury never represented Performant or its subsidiary in any protest matters.”

The case is FMS Investment Corp. v. United States.

Corrects to ConServe in second, third and eighth grafs at 8:23 a.m.

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