Tuesday, August 02, 2011

Akin Gump: A Culture of Intentional Deception?

Law360, New York (August 27, 2009) -- Akin Gump Strauss Hauer & Feld LLP has decided to halt post-verdict squabbles over a $72.6 million legal malpractice award to a former client, reaching a confidential final settlement with plaintiffs Air Measurement Technologies Inc. and North-South Corp.

Judge W. Royal Furgeson Jr. of the U.S. District Court for the Western District of Texas dismissed the suit Thursday after the parties filed a joint motion seeking to end the long-running litigation over Akin Gump’s allegedly shoddy patent applications and a series of underwhelming infringement actions.

“As grounds for this motion, the parties represent to the court that plaintiffs and defendant have entered into a settlement of their claims and causes of action and no longer desire to prosecute their respective claims and counterclaims against one another,” the joint motion to dismiss said.

The terms of the settlement are confidential, and a spokeswoman for the firm could not be reached for comment on the agreement Thursday.

The settlement, reached after years of battle, was likely facilitated by the firm’s discouraging verdict at trial in May.

After a jury returned a $72.6 million verdict against Akin Gump, the plaintiffs requested a final judgment of $83.3 million plus pre- and post-judgment interest, a figure the firm fervently opposed and sought to overturn.

Akin Gump argued that there was insufficient evidence to support the allegation that it engaged in any inequitable conduct that caused injury to the plaintiffs or that any of the plaintiffs' alleged injuries could be tied to malpractice.

Air Measurement Technologies and North-South accused Akin Gump of gross negligence and breach of fiduciary duty in its attorney-client relationship with the plaintiffs.

According to the complaint, Air Measurement Technologies' principals, Louis H. Stumberg Jr. and the now-deceased James A. Fulton, developed a concept for a computerized safety alert system for firemen and other emergency workers in the 1980s and began the process of patenting their technology in 1989.

However, subsequent to the initial patent issued for the technology — U.S. Patent Number 5,157,378 — several companies began to make identical equipment. Several related patents, among them U.S. Patent Number 5,910,771, also are part of the litigation, the complaint said.

The plaintiffs commenced six patent infringement cases, which, ultimately hampered by Akin Gump's flawed prosecution of the patents, led to $9 million in settlements, far less than the value of the widely used safety inventions, the suit said.

Sales of the infringing products were about $100 million per year since 1998, according to the complaint.

Akin Gump and other defendants failed to timely prosecute the '771 patent, which gave rise to the plaintiffs' losing significant royalties under that patent, the plaintiffs said.

Representatives for the plaintiffs could not be reached for comment Thursday.

The plaintiffs are represented by Glickman Carter & Bachynsky LLP, Cooper & Scully PC, Soules & Wallace PC and Storm LLP, among other firms.

Akin Gump is represented by McGinnis Lochridge & Kilgore LLP and Pulman Cappuccio Pullen & Benson LLP.

The case is Air Measurement Technologies et al. v. Akin Gump Strauss Hauer & Feld LLP, case number 03-cv-00541, in the U.S. District Court for the Western District of Texas.

The following post reports on the District Court verdict that found, inter alia, that Akin Gump engaged in intentional deception.


1. See also U.S. v. Moore, 931 F.2d 245 (4th Cir. 1991).  The Fourth Circuit Court of Appeals found that Akin Gump attorneys feigned ignorance of the terms of a plea agreement.

2. See also Freedman v. D.C. Department of Human Rights, D.C.C.A. no. 96-cv-961 (Sept. 1, 1998).  The District of Columbia, representing the interests of Akin Gump, filed with the court a substantial quantum of legally-irrelevant "after-acquired evidence" (in a possible attempt to deceive the court).  Akin Gump attorney managers solicited a psychiatric opinion about an employee in violation of the American Psychiatric Association's Goldwater Rule.  Akin Gump falsely denied in a sworn declaration filed with a D.C. agency that it had knowledge of an employee's membership in a protected class under the D.C. Human Right Act of 1977.  Akin Gump filed a sworn declaration on May 22, 1992 that failed to disclose that an employee had lodged a harassment complaint against his supervisor (Robertson) and acknowledged that the supervisor and the Personnel Director (Digweed) cooperated in the termination of an employee in October 1991.  Akin Gump alleged that the terminated employee (Freedman) was fired because there was a "lack of fit" between the employee and the firm.  Akin Gump unlawfully failed to provide the employee the results of an ex parte consultation with a psychiatrist that would have alerted the employee to file a timely claim for employer-sponsored Long-Term Disability insurance.

3. See also McNeil v. Akin, Gump, Strauss, Hauer & Feld (D.D.C. 1993).  Akin Gump denied plaintiff-employee's allegation that Robertson and Digweed colluded in the discriminatory termination of an employee in April 1992 (McNeil).  Akin Gump falsely denied or failed to disclose that another employee (Freedman) had lodged a harassment complaint against Robertson in Akin Gump's sworn declaration filed May 22, 1992 in Freedman v. Akin, Gump, Hauer & Feld (see above).  Akin Gump terminated employee a brief time before her pension would have vested.

4. See also Gross v. Akin, Gump, Strauss, Hauer & Feld (D.D.C. 2009).  Akin Gump alleged that plaintiff-employee (Donald Gross) was terminated because of a "lack of fit" between the employee and Akin Gump.

5.  The Starr Report delivered by the Office of the Independent Counsel to the U.S. House of Representatives.   In the late 1990s, Akin Gump executive partner Vernon E. Jordan, Jr., reportedly tried to buy the silence of a witness who had incriminating evidence that could involve former President Clinton in scandal.  Mr. Jordan is listed as a principal in the Starr Report.  The law license of President Clinton, a friend of Vernon Jordan's, was suspended by the State of Arkansas for five years on the grounds the President had lied about his affair with a White House intern.

6.  Plaintiff alleges Akin Gump engaged in fraud:


7. Akin Gump uses the "Because we say so!" rationale that it employed in Freedman v. D.C. Department of Human Rights (see above):


8. Akin Gump alleged to have committed defamation and extortion:



Gary Freedman said...

Akin Gump's unlawful breach of a common law duty to disclose results of psychiatric (medical) consultation to an employee:

see Freedman, Brief on Appeal footnote 22.

22/ While it is true that the physician, Dr. Ticho, did not conduct a personal examination of appellant, it is nonetheless instructive to observe that an employer has a duty, arising out of common law, to disclose to an employee, prior to or during employment, information the employer acquires when a physician it engages discovers a serious medical problem while examining the employee in accordance with the employer's requirements. See Meinze v. Holmes, 532 N.E.2d 170, 173 (Ohio App. 1987) citing Betesh v. United States, 400 F.Supp. 238, 245 (D.D.C. 1974) (interpreting Maryland common law). In the present case the employer's failure to provide information to appellant, derived from the employer's consultation with a physician, concerning appellant's mental health may have breached a common law duty to disclose. It is noted, incidentally, that Digweed--who, as the employer's personnel administrator, oversees the firm's employee benefits programs [Rec. 480-481]--was present at the termination meeting [Rec. 138]. At the termination meeting Digweed reviewed with appellant issues pertinent to insurance benefits--including appellant's COBRA rights, and health and life insurance issues [Rec. 480-481]--but omitted any mention of appellant's rights under the disability Plan or the employer's consultation with a psychiatrist [Rec. 123, 138-139]. Digweed is designated in the employer's personnel records as one of the three decisionmakers who terminated appellant's employment [Rec. 167].

Gary Freedman said...

According to a complaint, which was only five pages long, the defendants named tried to disrupt the business relationships of Arnold and then blackmail him until he agreed to the demands, which were illegal, of the defendant’s secret clients. The contents of the letter are not discussed in detail within the complaint.

A second defamation lawsuit has been filed against Akin Gump Strauss Hauer & Feld LLP within one week. As with the previous lawsuit, this one was filed against the firm and one of the firm’s partners from the securities practice. Both lawsuits were filed in Los Angeles. The plaintiff in the case is Charles Arnold. Arnold claims that Douglas A. Rappaport, a partner for Akin Gump, mailed a letter to another party. The letter to the third party said that Arnold lied, broke his fiduciary duties as an adviser, and alleged that Arnold committed an unidentified crime.

“The law presumes that Mr. Arnold has suffered harm to his reputation, as well as shame, mortification and hurt feelings, as a result of defendants’ libel per se,” Arnold said. “Without presenting evidence of damage, Mr. Arnold is entitled to receive compensation for his assumed harm in whatever sum the jury believes to be reasonable.”

The letter was allegedly sent to someone named James Worsham, who is not described in the complaint. Worsham’s relationship to the people involved in the complaint is not described either. The complaint did say the following about Worsham, “Worsham was under strong pressure to communicate defendants’ statements to additional people, and he did so.”

Last Tuesday, the law firm had an almost identical lawsuit filed against it by an attorney in California named John Kirkland. Kirkland claimed that Rappaport mailed a letter to Worsham, one that called Kirkland a thief and a liar. According to Kirkland and his lawsuit, the libelous letter sent out to a third party hurt his reputation as an attorney. He also says that the defendants used fraud, oppression, and malice. From the Kirkland lawsuit, he is look for damages that are worth more than $120 million.

In the lawsuit, Arnold is asking for close to $10 million in damages in the presumed category, $10 million in damages in the actual category and $100 million in damages in the punitive category. He also has claimed claiming libel. An Akin Gump spokeswoman refused to comment about the lawsuit when questioned while attorneys for Arnold were not reached for comment.

Mark A. Vega and Mona Mahdara Alcala from Libertas Law Group are representing Arnold in the lawsuit. The title of the case is Arnold v. Akin Gump Strauss Hauer & Feld LLP et al., with the case number of BC477723. The case was filed in the State of California’s Superior Court in the county of Los Angeles.

Gary Freedman said...

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