Counsel Concerns

Malpractice Claims/File-Sharing Software

The New York Appellate Division, Third Department, upheld the dismissal of legal malpractice claims arising out of transactional and defense work on the Aimster file-sharing software. But the court allowed former Aimster principal John Deep to proceed with a claim of misappropriation of the software against the lawyers who had represented him, including notable intellectual-property attorney David Boies. Deep v. Boies, 53 A.D.3d 948 (2008). A federal district court had issued an injunction against Aimster. In the malpractice suit, the state appeals court noted: “Plaintiff [Deep] alleged that an injunction could have been avoided or limited if [the malpractice] defendants had argued that the file sharing service had noninfringing uses, and that defendants did not make this argument due to conflicts of interest. Contrary to plaintiff's contentions, the record shows that defendants did make the proffered argument to the federal court ' although not in the clearest of terms ' and, in any event, the argument would not have prevented the issuance of the preliminary injunction. The evidence showed that [Deep's] corporation had contracted with another company ' also represented by [malpractice] defendants on other matters ' to develop Aimster technology for noninfringing uses, but that company was not actually using the technology and did not follow through with the development of such uses.”

The appeals court also decided that a malpractice claim arising out of a trademark suit by AOL against Deep over AOL's AIM instant messenger was properly dismissed because the lawyers obtained a favorable settlement for Deep. Still to be decided in the malpractice suit was whether there was continuous representation that would toll the three-year statute of limitations for Deep's misappropriation claim. According to the state court: “Plaintiff alleges overarching representation to help develop and protect his interest in the Aimster program encompassing the multiple incorporations, stock transfers, bankruptcy filings and litigation, including the copyright litigation. Defendants acknowledge that they never executed a retainer agreement or letter of engagement delineating the services to be provided. The record does not contain a single billing statement, nor an affidavit from Boies. ' The record also reveals that [the malpractice] defendants apparently reviewed legal work by various other firms on matters where defendants were not attorneys of record.”

Malpractice Claims/Statute of Limitations

The U.S. District Court for the District of Utah, Central Division, held that Utah's four-year statute of limitations, rather than California's one-year limitations period, applied to a legal malpractice claim brought by a Utah resident against attorneys who represented her in a copyright infringement suit in California. Stewart v. Stoller, 2:07CV552 DAK. Sophia Stewart had been the plaintiff in a California suit alleging that the “Matrix” and “Terminator” film trilogies infringed on her copyrighted work. More than one year after the complaint was dismissed, Stewart sued her copyright litigation attorneys in Utah federal district court, alleging that they “without her knowledge ' failed to produce her for a deposition, never conducted any discovery, and failed to respond to the defendant's discovery requests, including failing to respond to requests for admissions, which facts were later deemed admitted.”

The district court noted of the statute-of-limitations issue: “Defendants contend that courts should look to the law where the harm occurred, which, they claim, is in California. They contend that Ms. Stewart filed her lawsuit in California, the attorneys were all admitted (or were granted permission) to practice in the Central District of California, and the 'harmful conduct,' which they characterize as the dismissal of the action, occurred in California.” But the District of Utah judge emphasized: “A federal court sitting in a diversity action follows the procedural law of the forum state, regardless of whether the court applies the substantive law of the forum state or another state.” As a result, Stewart's malpractice suit was not time-barred.

The district court further found that Utah was the proper venue for the malpractice complaint because Stewart: was a state resident; had executed attorney engagement letters in Utah; had communicated from Utah with the lawyers; did not attend the hearings in California on advice of the copyright litigation counsel; and was billed by the attorneys at her Utah address.

Malpractice Claims/File-Sharing Software

The New York Appellate Division, Third Department, upheld the dismissal of legal malpractice claims arising out of transactional and defense work on the Aimster file-sharing software. But the court allowed former Aimster principal John Deep to proceed with a claim of misappropriation of the software against the lawyers who had represented him, including notable intellectual-property attorney David Boies. Deep v. Boies , 53 A.D.3d 948 (2008). A federal district court had issued an injunction against Aimster. In the malpractice suit, the state appeals court noted: “Plaintiff [Deep] alleged that an injunction could have been avoided or limited if [the malpractice] defendants had argued that the file sharing service had noninfringing uses, and that defendants did not make this argument due to conflicts of interest. Contrary to plaintiff's contentions, the record shows that defendants did make the proffered argument to the federal court ' although not in the clearest of terms ' and, in any event, the argument would not have prevented the issuance of the preliminary injunction. The evidence showed that [Deep's] corporation had contracted with another company ' also represented by [malpractice] defendants on other matters ' to develop Aimster technology for noninfringing uses, but that company was not actually using the technology and did not follow through with the development of such uses.”

The appeals court also decided that a malpractice claim arising out of a trademark suit by AOL against Deep over AOL's AIM instant messenger was properly dismissed because the lawyers obtained a favorable settlement for Deep. Still to be decided in the malpractice suit was whether there was continuous representation that would toll the three-year statute of limitations for Deep's misappropriation claim. According to the state court: “Plaintiff alleges overarching representation to help develop and protect his interest in the Aimster program encompassing the multiple incorporations, stock transfers, bankruptcy filings and litigation, including the copyright litigation. Defendants acknowledge that they never executed a retainer agreement or letter of engagement delineating the services to be provided. The record does not contain a single billing statement, nor an affidavit from Boies. ' The record also reveals that [the malpractice] defendants apparently reviewed legal work by various other firms on matters where defendants were not attorneys of record.”

Malpractice Claims/Statute of Limitations

The U.S. District Court for the District of Utah, Central Division, held that Utah's four-year statute of limitations, rather than California's one-year limitations period, applied to a legal malpractice claim brought by a Utah resident against attorneys who represented her in a copyright infringement suit in California. Stewart v. Stoller, 2:07CV552 DAK. Sophia Stewart had been the plaintiff in a California suit alleging that the “Matrix” and “Terminator” film trilogies infringed on her copyrighted work. More than one year after the complaint was dismissed, Stewart sued her copyright litigation attorneys in Utah federal district court, alleging that they “without her knowledge ' failed to produce her for a deposition, never conducted any discovery, and failed to respond to the defendant's discovery requests, including failing to respond to requests for admissions, which facts were later deemed admitted.”

The district court noted of the statute-of-limitations issue: “Defendants contend that courts should look to the law where the harm occurred, which, they claim, is in California. They contend that Ms. Stewart filed her lawsuit in California, the attorneys were all admitted (or were granted permission) to practice in the Central District of California, and the 'harmful conduct,' which they characterize as the dismissal of the action, occurred in California.” But the District of Utah judge emphasized: “A federal court sitting in a diversity action follows the procedural law of the forum state, regardless of whether the court applies the substantive law of the forum state or another state.” As a result, Stewart's malpractice suit was not time-barred.

The district court further found that Utah was the proper venue for the malpractice complaint because Stewart: was a state resident; had executed attorney engagement letters in Utah; had communicated from Utah with the lawyers; did not attend the hearings in California on advice of the copyright litigation counsel; and was billed by the attorneys at her Utah address.