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Ethics

Suit is ‘almost a word-for-word carbon copy’ of prior complaint filed by different lawyers, federal judge says

By Debra Cassens Weiss

April 15, 2025, 8:53 am CDT

Updated: A federal judge in Puerto Rico has said she is considering sanctions for a San Juan, Puerto Rico, lawyer who filed a lawsuit that is “almost a word-for-word carbon copy” of a suit filed by different lawyers representing different plaintiffs.

In an April 9 order, U.S. District Judge Aida M. Delgado-Colon of the District of Puerto Rico found that the conduct by lawyer David Efron “runs afoul not only of attorney Efron’s duty of competence to his client but also his duty of candor to the court.”

Law 360 has the story.

Efron told the ABA Journal that there was no plagiarism because the plaintiffs in both cases are cooperating.

Efron is representing San Juan in a December 2023 suit alleging that activities by several oil-industry defendants caused damages because of their impact on climate change. Delgado-Colon said Efron’s suit and some of his other case filings are similar to documents in a prior suit filed by about 40 other municipalities.

“Just a review of the first couple of paragraphs of the complaint is enough to warrant suspicion,” Delgado-Colon wrote.

The opening language, footnotes and citations are identical to the corresponding paragraphs in the municipalities’ case, with a few exceptions, Delgado-Colon said. They include “sprinkling some adverbs such as ‘incredibly’ at the beginning of a paragraph,” referring to the correct plaintiff and “breaking a paragraph in two.”

As pointed out by the defendants, Efron’s suit was so “rife with examples of plagiarism” that it refers to documents that were never filed, it sometimes refers to the singular plaintiff as “municipalities,” and it repeats typos in the other suit, Delgado-Colon said in her order. Efron also refers to “this class action,” even though San Juan denied bringing such a case, the judge said.

“Attorney Efron lifted not only the entire theory of San Juan’s case from the municipalities’ case but went so far [as] to use virtually the very same words and ideas, usurping the thought processes and legal theories a client hires an attorney to develop and perform,” Delgado-Colon said.

Delgado-Colon said Efron was also late in filing case documents and ordered him to show cause why he should not be sanctioned $7,000 for “untimely filings and lack of diligence in the management of case deadlines.” Efron had said he was in a federal jury trial at the time.

As for the alleged plagiarism, the judge said a monetary sanction on its own would be “insufficient to address the seriousness of the circumstance,” and she would be issuing a separate order to address that issue.

“This opinion and order should serve as a cautionary tale for all members of the bar,” Delgado-Colon wrote.

Efron told the Journal in an email that the judge had “rushed to judgment” without getting the full story.

“There was no plagiarism,” Efron says. The plaintiffs in both cases “are collaborating for the same cause in the interest of controlling climate change. The judge without even conferring with counsel rushed to judgment without knowing that counsel in both cases are collaborating.”

Efron also says the order “is not final and has been referred for further proceedings after we are given an opportunity to respond and show cause.”

Updated April 15 at 11:23 a.m. to add lawyer David Efron’s comments.

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Law Firms

Suit accuses Sullivan & Cromwell of employing ‘creative but misleading strategies’ that aided FTX fraud

By Debra Cassens Weiss

February 20, 2024, 4:00 pm CST

A proposed class action lawsuit filed by investors in cryptocurrency exchange FTX accuses Sullivan & Cromwell of aiding and abetting fraud by providing legal services that went “well beyond” usual legal work.

“As the evidence will reveal, S&C lawyers were eager to craft not only creative but misleading strategies that furthered FTX’s misconduct,” according to the Feb. 16 suit, filed in the U.S. District Court for the Southern District of Florida.

Law.com, Bloomberg Law and Reuters have coverage.

FTX founder Samuel Bankman-Fried was convicted in November 2023 on seven counts of fraud and conspiracy a year after the collapse of his company. Another law firm, Fenwick & West, is also facing a suit for its legal work for FTX.

The new suit that alleges Sullivan & Cromwell formed a close relationship with FTX U.S. as its outside counsel after the company hired firm partner Ryne Miller as its general counsel in 2021. The relationship between FTX and Sullivan & Cromwell was so close that Bankman-Fried often worked out of the firm’s New York office, the suit says.

While working as primary legal counsel over a 16-month period, Sullivan & Cromwell billed about $8 million in fees, the suit says. The firm was also hired to manage FTX’s bankruptcy and has since earned more than $180 million for FTX legal matters.

FTX was able to avoid the scrutiny of regulators such as the U.S. Commodity Futures Trading Commission by buying companies that already had the necessary licenses, the suit says. The firm also generated for FTX entities “the appearance of legitimate operations; strict adherence to regulatory obligations; and esteem for legal compliance, which permitted the scheme to grow in scale and persist in duration,” the suit alleges.

The suit alleges civil conspiracy, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and violation of the civil federal racketeering law.

The alleged RICO enterprise aimed to persuade customers to entrust FTX U.S. and FTX Trading Ltd. with their assets and to conceal misappropriation of customer funds, the suit says. The firm offered legal advice “knowingly, recklessly or with willful blindness to the nature of the RICO enterprise,” the suit says.

Sullivan & Cromwell has previously said its relationship with FTX was limited, and it reported concerns when it learned of problems. It did not respond to requests for comment by Reuters, Law.com and Bloomberg Law. Nor did it immediately respond to an email request for comment by the ABA Journal.

The case is Garrison v. Sullivan & Cromwell.

The investors are represented by the Moskowitz Law Firm.

“It’s never going to go well,” Arizona attorney Lynda C. Shely says about the prospect of representing anyone you are close to, including family members and friends. Shely, the immediate past chair of the ABA Standing Committee on Ethics and Professional Responsibility, works in private practice and has advised more than 2,500 law firms around the country on legal ethics matters.

“What friends and family don’t understand is just giving them a little bit of advice creates an attorney-client relationship,” Shely says. “And a young lawyer can be sued if the advice they give is wrong.”

A friend or family member asking for legal advice can make for a complicated situation, especially because “young lawyers typically want to flex the knowledge they learned from law school or from their limited time as a lawyer,” says Khasim Lockhart, an associate at Frankfurt Kurnit Klein & Selz in New York, whose focus areas include legal ethics and professional responsibility.

The risks of giving legal advice in these situations

The possibility of inadvertently creating an attorney-client relationship is a very real risk.

“When you start giving advice about how to deal with somebody’s particular legal problem and not just giving referrals to sources of assistance, the risk is that you are going to inadvertently create a lawyer-client relationship—because the person is going to understand you are giving them assistance about their particular problem that they can rely on,” says Bruce A. Green, the Louis Stein chair at the Fordham University School of Law, where he directs the Louis Stein Center for Law and Ethics. Green is the current chair of the Standing Committee on Ethics and Professional Responsibility.

This may violate your duty of competence if it relates to something outside your realm of expertise under Model Rule 1.1 of the ABA Model Rules of Professional Conduct.

“As a young lawyer, you want to be helpful to anyone, especially family members, but at the same time, the biggest risk from helping family members is that a lawyer can end up dabbling,” Lockhart says. “What I mean by dabbling is a lawyer having limited involvement in a subject matter and giving a few pieces of advice based on general knowledge from law school or a random case they read while simultaneously trying to avoid fully engaging in the matter. But even five minutes of advice can be truly damaging.”

Ethical duties and the possibility of a malpractice claim

Shely says young lawyers should understand that even if they think they are giving just “a little bit of advice,” say on the sidelines of their kids’ soccer game to another parent, the lawyer would likely be required to put that contact in their firm’s database as a potential client and a potential conflict under Model Rule 1.18 and pursuant to their local rules that cover duties to prospective clients.

In addition to the risk of losing a friend after offering bad legal advice, a young lawyer could also be sued for malpractice.

“It happens all the time,” Shely says. “And that’s not a debt you want to take on along with student loans.” Even where your firm might have malpractice insurance, if you provide advice outside the scope of your job, it may not be covered.

How to respond when a friend or family member asks for legal advice

So what is a young lawyer who specializes in labor and employment law supposed to do when a family member comes to them with a criminal defense issue?

The best thing to do is be straightforward and say: “I have no experience in that area of law, but I can find someone for you,” Lockhart says. New lawyers and seasoned lawyers alike are familiar with other attorneys at their firms or through bar associations and can connect a family member or friend to one with the experience they need, he adds.

It’s OK to represent friends and family members, but do it the right way

If a young lawyer feels competent to represent someone close to them, there are no rules preventing that representation, but it must proceed the way that any other representation would.

“You have to do the full gamut of having them come into the office or doing a consultation virtually and sending an engagement letter,” Shely says.

She also recommends that lawyers who choose to represent a friend or family member make sure to carefully limit the scope of representation in a written engagement letter to just that matter and not agree to represent on appeal.

“Otherwise,” Shely says, “that friend or family member could mistakenly think you’re going to handle all of their legal matters for free!”

Lockhart also notes that although representing a friend or family member might feel a bit more relaxed and laid-back than a more formal representation, the ABA Model Rules still apply.

“You don’t want to assume you will be more favored by a family member or friend if something goes south,” he says.

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Editor’s Note: This column first appeared in the ABA Young Lawyers Division publication TYL on Oct. 13, 2023.

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Samuel Dangremond is an attorney admitted to the Connecticut, Florida and New York bars. He works as a trusts and estates associate at Curtis, Mallet-Prevost, Colt & Mosle in New York City.

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Mind Your Business is a series of columns written by lawyers, legal professionals and others within the legal industry. The purpose of these columns is to offer practical guidance for attorneys on how to run their practices, provide information about the latest trends in legal technology and how it can help lawyers work more efficiently, and strategies for building a thriving business.

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Interested in contributing a column? Send a query to [email protected].

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This column reflects the opinions of the author and not necessarily the views of the ABA Journal—or the American Bar Association.