Dickstein Shapiro scored a victory yesterday in a legal malpractice lawsuit brought by former client Encyclopaedia Britannica, with a Washington federal judge denying (PDF) the company's motion for partial summary judgment and also ordering sanctions against the company's counsel.
Encyclopaedia Britannica sued Dickstein in 2010, accusing the firm of mishandling patent prosecutions. The latest motion for partial summary judgment dealt with judicial estoppel – whether the judge could bar Dickstein from making an argument that would seemingly contradict statements made while the firm was still representing the company.
U.S. District Judge John Bates denied Encyclopaedia Britannica's motion, finding that judicial estoppel couldn't apply to statements made by lawyers now being sued by a former client for malpractice. Lawyers can't be faulted for inconsistencies when they switch from representing the interests of a client to defending against allegations of misconduct, he said.
"Even worse, applying judicial estoppel against a law firm in malpractice litigation for statements it made as plaintiff’s lawyer could chill full and vigorous representation, forcing attorneys to make tradeoffs between a client’s interests and protecting themselves in case of a future malpractice suit," Bates wrote.
The encyclopedia company claimed that because of Dickstein's negligence, valuable patents were deemed invalid in litigation against alleged patent infringers in U.S. District Court for the Western District of Texas. The company wanted Bates to bar Dickstein from denying that the patents at issue were infringed, in light of a 2005 affidavit from a firm attorney stating that, in his opinion, "some of the claims are unquestionably infringed."
Bates found that judicial estoppel couldn't apply because Dickstein wasn't a formal party in previous proceedings where the statements at issue were made. He wrote that the "logic of judicial estoppel—that a party should not be changing its position between proceedings—does not apply to statements made before one was a party at all."
The logic of judicial estoppel "unravels" in malpractice cases, he added, since it would prevent the court from learning what would have happened if the alleged negligence hadn't taken place. "Indeed, applying judicial estoppel here would convert the doctrine from a protection of the integrity of courts into a sword to be used offensively, one that would be conclusive in many malpractice suits," he said.
Bates also ordered sanctions against Encyclopaedia Britannica's counsel for the handling of a motion for sanctions against Dickstein. He found that counsel acted in bad faith by filing a "frivolous" motion to treat its sanctions motion as conceded without checking in first with opposing counsel.
Robert Cummins, a Chicago-based attorney and lead counsel for Encyclopaedia Britannica, said that Bates gave the issue "a full and fair hearing" and that he and his client understood the opinion. "The thing I personally regret is the breakdown in communication with opposing counsel, and that won't happen again," he said.
A lead attorney for Dickstein, John Aldock of Goodwin Procter, said that "we are gratified by the resolution of the motion and we are confident that in due course the firm's position will be vindicated in this matter."