<b>Counsel Concerns:</b> Experts' Reports Insufficient in Broadcast-Deal Malpractice Suit

The U.S. District Court for the Eastern District of Virginia granted summary judgment for a law firm sued for legal malpractice over the handling of a license to provide in-store radio broadcasts at U.S. military commissaries. Star Broadcasting Inc. v. Reed Smith LLP, 08-0616. The district court found fault with the broadcast client's expert witnesses in the malpractice case.

In 1999, Star's president/CEO Pat DiPlacido contacted attorney Glenn Mahone in Reed Smith's Pittsburgh, PA, office to help negotiate a license for the operation of a satellite music-broadcast network for U.S. Department of Defense commissaries worldwide. Malone practiced business and commercial law, and had owned a commercial radio station and a satellite radio network.

In the negotiations, the government's Defense Commissary Agency (DeCA) refused to agree to a provision requiring commissary vendors to purchase advertising from Star's radio network, though Star was allowed to sell ads to the vendors. In 2003, the DeCA refused Star's demand that the DeCA institute a cooperative advertising program with commissary vendors. After the five-year term of the broadcasting contract with Star ended in 2005, the DeCA decided not to continue the agreement. Mahone then referred the Star contract to Reed Smith's litigation department, which concluded that Star had a breach of contract claim against the federal government over the cooperative advertising issue.

But Star sued Reed Smith alleging transactional malpractice in 1999 and negligent advice in 2003. The district court found that none of Star's three expert witnesses were qualified to opine on the relevant standard of care and any proximate cause between Reed Smith's alleged malpractice and Star's alleged damages. According to the court: “Star must satisfy its burden of showing that its alleged business loss was in fact caused by Reed Smith's negligence, because it is clear that a lawyer may be too easily made a scapegoat for business misjudgments by his client. Star has failed to show that it can, under any set of circumstances, establish the causal link.”

For example, the court noted, the report of ethics expert Michael L. Rigsby “provides no opinion concerning causation in this matter. His opinions are that Reed Smith's representation of Star, through Mr. Mahone, 'fell below the reasonable standard of care required of a legal practitioner.' There is no other opinion expressed. Mr. Rigsby never expresses any opinion with respect to whether 'but for' Mr. Mahone's alleged negligence, Star would have suffered damages. Mr. Rigsby never addresses whether or not Mr. Mahone's alleged 'deficiencies' proximately caused any damage to Star at all. ' Mr. Rigsby's opinion is that, because Reed Smith has a government contracts group, Mr. Mahone should have consulted a government contracts lawyer. He has no opinion whatsoever as to what would or should have happened if Mr. Mahone had done so.”

The U.S. District Court for the Eastern District of Virginia granted summary judgment for a law firm sued for legal malpractice over the handling of a license to provide in-store radio broadcasts at U.S. military commissaries. Star Broadcasting Inc. v. Reed Smith LLP, 08-0616. The district court found fault with the broadcast client's expert witnesses in the malpractice case.

In 1999, Star's president/CEO Pat DiPlacido contacted attorney Glenn Mahone in Reed Smith's Pittsburgh, PA, office to help negotiate a license for the operation of a satellite music-broadcast network for U.S. Department of Defense commissaries worldwide. Malone practiced business and commercial law, and had owned a commercial radio station and a satellite radio network.

In the negotiations, the government's Defense Commissary Agency (DeCA) refused to agree to a provision requiring commissary vendors to purchase advertising from Star's radio network, though Star was allowed to sell ads to the vendors. In 2003, the DeCA refused Star's demand that the DeCA institute a cooperative advertising program with commissary vendors. After the five-year term of the broadcasting contract with Star ended in 2005, the DeCA decided not to continue the agreement. Mahone then referred the Star contract to Reed Smith's litigation department, which concluded that Star had a breach of contract claim against the federal government over the cooperative advertising issue.

But Star sued Reed Smith alleging transactional malpractice in 1999 and negligent advice in 2003. The district court found that none of Star's three expert witnesses were qualified to opine on the relevant standard of care and any proximate cause between Reed Smith's alleged malpractice and Star's alleged damages. According to the court: “Star must satisfy its burden of showing that its alleged business loss was in fact caused by Reed Smith's negligence, because it is clear that a lawyer may be too easily made a scapegoat for business misjudgments by his client. Star has failed to show that it can, under any set of circumstances, establish the causal link.”

For example, the court noted, the report of ethics expert Michael L. Rigsby “provides no opinion concerning causation in this matter. His opinions are that Reed Smith's representation of Star, through Mr. Mahone, 'fell below the reasonable standard of care required of a legal practitioner.' There is no other opinion expressed. Mr. Rigsby never expresses any opinion with respect to whether 'but for' Mr. Mahone's alleged negligence, Star would have suffered damages. Mr. Rigsby never addresses whether or not Mr. Mahone's alleged 'deficiencies' proximately caused any damage to Star at all. ' Mr. Rigsby's opinion is that, because Reed Smith has a government contracts group, Mr. Mahone should have consulted a government contracts lawyer. He has no opinion whatsoever as to what would or should have happened if Mr. Mahone had done so.”