time for the settlement

concur heartily with 5:05.

Lat - want to post some odds on when a settlement agreement will be reached this week?

i think they'll settle this may

Why is a dismissal of Charney's suit a good thing?

Because S&C wanted it dismissed with prejudice, that's why.

Now Charney can replead - which he was going to do anyway.

And not only can he replead, he can have his lawyers -- specialists in employment discrimination claims -- draft the new complaint to replace the pro se complaint Charney initially filed.

Meanwhile, although Justice Fried refused to dismiss S&C's other causes of action (brech of contract & replevin), the claims will not survive a motion for summary judgment.

In short, S&C is screwed and should settle.

Hooray!

Without having read the opinions, it seems a little weird that having his claim dismissed and being subjected to a preliminary injunction constitutes a win for Charney.

I've heard from inside sources connected to the case that S&C will have to pony up upwards of 10 million if they want to settle...since it will cost them AT LEAST that much in trial costs and more importantly reputation and recruiting costs if this drags out

Charney's gonna be a rich guy after the dust settles

5:26 and 5:45, the prof. art leonard piece nicely summarizes why this is a victory for charney.

All in all, a real win for the profession...

This Judge seems to be a very smart and good lawyer.

S&C's remaining claims are frankly silly, and have always been silly, if you just look at the measure of damages. The measure of damages for breach of contract is benefit of the bargain. Well, what did S&C lose out on because of ABC's actions? Nothing. Replevin doesnt contemplate damage--the remedy is that you get your property back. And Conversion is similar to replevin, but you get the value of the property instead of a physical return of the property. So either S&C gets the value of the paper he took (pennies) OR S&C gets its conversion claim thrown out, since it is likely that you cant recover for both replevin and conversion (rule against duplicative remedies).

So, S&C's lawsuit is worth pennies.

The dismissal of Charney's complaint with leave to replead is a victory for him. S&C had moved to dismiss because ABC revealed the existence of certain attorney-client relationships in the complaint - not the substance of any communications, but the fact that S&C had represented them. As ABC's counsel pointed out in their briefing, S&C's website is rife with self-congratulatory descriptions of significant clients represented, etc.

S&C argued that by divulging that information, ABC breached disciplinary rules, and therefore his complaint should be dismissed.

The able Justice Fried called bullshit on that argument, as he rightly should have. So, yes, now ABC can replead with the assistance of counsel, which is a very good thing, as his original complaint was loaded with surplusage and irrelevant materials.

Anyone notice that J. Fried found the allegations of disciplinary rule violations by Charney to be colorable?

Yes, Fried found allegations of disciplinary rules colorable. But that has nothing to do with the lawsuit, as he pointed out.

There already may be ethics charges on file stemming from this litigation - against Gallion, Gera Grinberg's discharged attorney who is alleged to have destroyed the notes of the Jan. 31 meeting that were given him by his client for safekeeping.

I'm not sure what Charney's alleged disciplinary violations are. Fried found that the complaint revealed no client confidences or secrets. He intimated that some of the extraneous matter in the complaint might give rise to a disciplinary complaint, but he seemed to be suggesting that the main remedy for S&C for an associate who they think is "disloyal" is for them to fire him, and they have. His lawsuit isn't for wrongful discharge, remember, its for hostile environment discrimination and retaliation.

Of course, S&C did win on the preliminary injunction to shut ABC up, which is not a small matter for them.

ABC will re-plead. Expect S&C to file a motion to dismiss on the merits this time. Charney's lawyers will write a better complaint, but they'll have to: without all the gossipy nonsense, there won't be much left to work with.

I'm betting on no settlement. Any damage to S&C's reputation in recruiting is already done. The suit isn't hurting their business. ABC can't talk to the press. I think S&C will fight it out, even if it costs them more than a settlement.

not so sure this is a win for Charney in the long run.

Charney's only real damages are in saying he was unlawfully discharged (one ambiguous anti-gay comment doesn't equal much $$$). The judge's ruling harms his soon to be pled retaliation claim for retaliatory discharge. Charney's lawyers are going to refile the Complaint, this time with a retaliation argument. If the judge has already said that the remedy for a disloyal employee is to fire him, which S&C did, Charney is going to have a hard time saying his discharge was in retaliation to his complaint. Rather the judge has already more or less said that he was discharged for being disloyal.

Anyone know if Charney may face ethics charges by the bar? If Charney is able to prevail on his complaint, he'll have to mitigate damages. If he's disciplined or disbarred, Sullivan and Cromwell won't be on the hook for all of the damages.

I disagree about the damage all being done to S&C already. I mean, we have yet to find out what comes of the depositions of Grinberg and DiBlasi. Grinberg is an associate but DiBlasi is a very high ranking litigation partner. This stuff with the Gallion guy and false affidavots (on top of Charney's allegation about doctored reviews) could become even worse for S&C if you think about its impact on morale and recruiting.

Charney's retaliation claim has nothing to do with discharge - at least in the Jan. 16 complaint - since he hadn't been discharged yet. The retaliation claim had to do with the following: he complained about the hostile environment stuff to a senior partner designated to receive associate complaints; after having complained, he alleges, S&C started to "come down" on him in various ways, most egregiously the "dummied-up" adverse work review.

On the amended complaint, it's possible Charney's attorneys could add a retaliatory discharge claim, but I doubt it. I think leaking firm documents to the WSJ would independently justify a discharge, so I wouldn't touch that theory and would stick to the original retaliation claim.

Uultimate prognosis - a weak hostile environment claim and a stronger retaliation claim. Will this be a summary judgment case, will it go to trial, will it settle?

It could settle if S&C came up with big bucks, but why would they want to? Most of the reputational damage to them has been done, to the extent there is any... After all, as DiBlasi is alleged to have said at the Jan. 31 meeting, a book came out reporting about the firm's representation of Nazi clients in the 1930s and it didn't seem to hurt the firm at all, judged by reputation and business success. Maybe diBlasi was correct when he said nothing Charney could do to them in litigation would have any lasting impact on the firm...

Unless, of course, they wise up and decide they need a more effective internal grievance system and a program to sensitize partners better to the sensibilities of today's high-strung, pampered, overpaid associates!

The point of refiling here is to put in a clean complaint freed of extraneous matter and focusing on the factual allegations necessary to support the claims.

I assure you that Charney's new complaint will allege retaliation in the form of his discharge. Otherwise where are his damages? There doesn't appear to be any damage resulting in the adverse performance review.

ABC

BVD

the East Coast Family

It's long overdue, and now

9:59, that would be BBD, Bell Biv Devoe. BVD is underwear.

We now officially live in a homofascist country. If this case is not enough to wake up the few Americans who still care about traditional values, I don't know what is.

Yes, totally homofascist. I'm tired of getting harassed and beaten up in the street when people see how sloppily I dress and assume I'm one of them straights. Members of the oppressed majority, UNITE!

$10 million? Try $50,000,000. S&C is going to be punished hard with punitives for their egregious harassment.

Judge Fried: http://www.courts.state.ny.us/comdiv/Justice%20Bernard%20J.%20Fried.htm

Gasp! He went to Brooklyn!

9:04: Well he is a state court judge (although a very well-regarded one).

The guy at 12:48AM doesn't know how right he is; the GOP seems to be manned entirely by closeted gay Republicans these days.

According to this morning's NY Law Journal, attorneys for both sides said they were pleased with yesterday's rulings. And ABC's lawyer, Daniel Alterman, said the amended complaint will be on file soon.

The other interesting item in this morning's NY Law Journal is a table showing the 10 most profitable (profits per partner) firms in the US, among which S&C is listed at No. 5: 164 equity partners, 2006 profits of $2.82 million per partner, you do the math!

Think they have enough money to settle this case?

Interesting. I wish I hadn't missed this yesterday. Correct me if I'm wrong but I assume S&C would want to prevent depos of its client regard the quality of ABCs work at all costs. More than anything I think that might push them to settle.