Federal Court Holds Lawyer’s Failure to Disclose Investigation and Duty Court Owes Transferee Plaintiffs Requires Removal from Plaintiffs’ Steering Committee and Notice to, and Consent of, Lawyer’s Individual Clients
Product liability actions – filed against Medtronic, Inc., concerning its implantable defibrillator – were transferred to a Minnesota federal court by the Multidistrict Litigation (MDL) Panel. Mitchell Breit, a partner in the New York office of Milberg Weiss Bershad & Schulman, was selected to serve on the Plaintiffs’ Steering Committee. Following the indictment of Milberg Weiss, the district court judge sua sponte initiated a telephone conference to discuss Breit’s continued involvement on the committee. In re Medtronic, Inc. Implantable Defibrillator Prod. Liab. Litig., 434 F.Supp.2d 729 (D. Minn. 2006). Lead counsel and Breit requested that he be allowed to continue to serve; the court rejected their pleas “finding that it is in the best interest of the transferee plaintiffs that Mr. Breit and the Milberg Weiss firm be severed from the service” on the committee. Id., at 730.
The federal court reasoned a transferee judge “bears a particularly heavy burden to protect the transferee plaintiffs,” in addition to and separate from the duty attorneys owe their clients. Further, in selecting attorneys to serve on the steering committee, the Court directly investigated the ethics of every lawyer who offered to serve on it: “It asked each attorney seeking appointment to the [steering committee] to submit a letter touching his/her own ethics, and the ethical competence of his/her firm or professional association.” Id., at 730. The court noted with dissatisfaction that Briet’s December 2005 submittal failed to disclose the criminal investigation of the Milberg Weiss firm or its partners, and said nothing of the potential criminal charges until the federal criminal indictment issued. Id. Breit’s May 30, 2005 letter to the Court – sent in response to the Court’s sua sponte inquiry – failed to explain why the criminal investigation “was never disclosed to this Court until the indictment was handed up.” Id., at 731. The district court found this unacceptable, explaining at page 731:
This failure to disclose is inexplicable in light of this Court’s explicit and expressed concerns that each lawyer’s and law firm’s ethics were to be considered for anyone or any firm acting as members of the plaintiffs’ lead counsel, liaison counsel, or steering committees.
The federal court took pains to note that it was not pre-judging Milberg Weiss or its indicted partners; the court presumed them to be innocent. However, the federal indictment required a finding of probable cause that a criminal act had been committed, “which must be of concern to the Court as it labors to protect transferee plaintiffs in an MDL case.” Id., at 732.
NOTE: The Court did not require Breit to withdraw from the case entirely, but it ordered him to provide a copy of the Court’s Order to his clients and that each Milberg Weiss client who desired to continue being represented by that firm confirm that fact in writing directly to the Court. Id., at 731 n.2.