Thursday, January 31, 2008

Law firm wins malpractice case over Cuba sales

Law firm wins malpractice case over Cuba sales
Published on Thursday, January 31, 2008
By Lindsay Fortado

PHILADELPHIA, USA (Bloomberg): Morgan, Lewis & Bockius won a legal
malpractice case brought by a client that accused the largest
Philadelphia-based law firm of giving bad advice about sales to Cuba in
violation of the US trade embargo.

A 12-member jury deliberated for 3½ hours before concluding that Morgan
Lewis hadn't committed malpractice. The unanimous verdict came after a
3-week trial in Philadelphia.

"We are very pleased that the members of the jury unanimously recognized
that Morgan Lewis acted appropriately and breached no duty to the firm's
former client," Morgan Lewis general counsel Michael Bloom said.

Dan and Stefan Brodie, founders of Purolite Corp., a maker of specialty
resins for water purifiers, sued Morgan Lewis in 2004, claiming the firm
advised them that their Canadian and UK units could legally sell to a
Cuban company under the trade embargo if US operations weren't involved.
The Brodies said Morgan Lewis attorneys continued to offer that advice
after the US Attorney's office in Philadelphia began a criminal probe.

"We're disappointed with the verdict," Purolite attorney Aaron Marks
said. The company is considering an appeal, he said.

During the trial, a lawyer for Morgan Lewis, William O'Brien, told
jurors that the firm advised Purolite there couldn't be any US
involvement in its sales to Cuba and that the Brodies ignored that
advice. Purolite made more than 35 sales, totaling $2.12 million,
O'Brien said.

"They did exactly what the lawyers told them not to do," O'Brien said
yesterday, during his closing argument.

In 1996, the US Customs Service began an investigation into Purolite's
sales to Cuba. Morgan Lewis told inspectors that the company's foreign
units were separately owned and advised the Brodies to continue doing
deals with a Cuban company, leading to a criminal indictment by the
Philadelphia US Attorney's office, Marc Kasowitz, a lawyer for Purolite,
told jurors.

The Brodies ordered their units to stop sales to Cuba in 1999, against
the advice of Morgan Lewis, according to Kasowitz.

In 2002, the Brodies were convicted of making illegal trades to Cuba, a
jury verdict that was later reversed on appeal. The Brodies and Purolite
pleaded guilty to charges involving reimbursement of travel expenses
related to Cuban sales, the company said in court filings.

Morgan Lewis, whose clients include Citigroup Inc., Blockbuster Inc.,
American Airlines Inc., Mitsubishi Motors Corp. and Apollo Management
LP, is the 12th-largest US law firm with 1,392 attorneys, according to
the National Law Journal, a legal newspaper.

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