D.C. Superior Court Associate Judge Judith Retchin yesterday threw out the $30 million legal malpractice suit brought by Blackwater Security Consulting against Wiley Rein and the firm’s former partner Margaret Ryan. Blackwater sued the Washington law firm in January, alleging that Wiley lawyers neglected critical case law and statutes while defending it in a 2005 wrongful death case brought on behalf of four Blackwater guards brutally killed in Fallujah, Iraq in 2004. Legal Times initially reported on the case here.
In her May 27th order to dismiss the case, Judge Retchin also disagreed with Blackwater’s malpractice claims, but ultimately threw out the suit on damages grounds. “The Court finds Plaintiffs’ alleged damages to be speculative,” she wrote. “Thus, there is no compensable injury for the alleged legal malpractice.”
The Wiley team that defended Blackwater in the underlying case consisted of Fred Fielding, now White House counsel; Barbara Van Gelder, now a partner at Morgan, Lewis & Bockius; Scott McCaleb, still a partner at Wiley; and Margaret Ryan, now a judge for the U.S. Court of Appeals for the Armed Forces. Blackwater’s malpractice suit named Ryan as a separate defendant because, according to the complaint, she led the defense team.
In the malpractice complaint, Blackwater contended the wrongful death suit would have been dismissed if it were heard in federal court, where the defense could have relied on similar cases where claims against battlefield contractors were thrown out. But the 2005 case was kept in Wake County Superior Court in North Carolina, despite a motion filed by the Wiley team to get it moved to the U.S. District Court for the Eastern District of North Carolina. The malpractice complaint alleged the motion failed predominantly because the Wiley lawyers failed to invoke the federal officer removal statute, which gives federal jurisdiction to claims involving federal officers.
Wiley’s motion to dismiss the malpractice suit against it contended that Blackwater could not have been considered a “federal officer” in the underlying case because the guards killed did not contract directly with the U.S. government, were not providing security for U.S. military personnel, and were not overseen by the U.S. military.
In her dismissal, Judge Retchin said Blackwater’s claims that it was entitled to remove the wrongful death case to federal court under the federal officer removal statute, and that “dismissal was the only appropriate remedy” for the case in federal court were “legal conclusion[s] couched as factual allegation[s].”
“The judge’s opinion lays bare a fundamental problem in Blackwater’s case—namely that the state court would rule differently than the federal court,” says Mark Foster, one of the Zuckerman Spaeder partners who represented Wiley in the malpractice suit. Zuckerman partner Elizabeth Taylor also represented Wiley, and Barry Nace of D.C.’s Paulson & Nace represented Blackwater.
The underlying wrongful death case against Blackwater is still pending in Wake County Superior Court. As for the malpractice case, Foster acknowledges that because it was dismissed without prejudice, Blackwater could file suit again. “We’ll see what happens,” he says.