Case Name and Citation

Spaulding v. Zimmerman
153 F.3d 691,1998 U.S. App.
Issue
Can the prior settlement order be vacated on the grounds that Defendant knew of
Plaintiffs condition when Plaintiff did not?
Rule of Law
The extent of a lawyers duty to disclose.
Rationale
It is important to note that Plaintiff was a minor at the time of the settlement. Had he
been an adult, it is more likely that he would have been bound by it, although he would
have had grounds for a claim against both his doctor and his lawyer for malpractice.
Holding
Yes. The lower court did not abuse its discretion in vacating the settlement.
While Defendants counsel had no specific ethical obligation to disclose Plaintiffs lifethreatening condition, they had reason to know that Plaintiff would not have agreed to
the same settlement had he known of it.
Facts
Plaintiff, David Spaulding, was a victim in a serious car accident. Insurance companies for
both sides conducted examinations of him to determine the extent of his injuries, but
only the defendants doctor discovered that his life was at risk from a serious brain
aneurysm which may or may not have been caused by the accident. Counsel for
Defendant Zimmerman decided not to reveal this information while negotiating
settlement. Plaintiff did not become aware of this condition until two years later, and
requested that the trial court vacate the prior settlement at that time.
Procedural Posture
Trial Court: Plaintiff moved to vacate the settlement, arguing that he would not have
agreed to the same settlement if he had been made aware of this condition. Defendant
appealed.
Case Name and Citation
United States v. Gallene
182 F.3d 578,1999 U.S. App.52
Issue
Was there sufficient evidence presented at trial to established that Defendants failure to
disclose his firms prior relationship with his clients creditor was fraudulent?
Rule of Law
Rule 2014 of the Federal Rules of Bankruptcy Procedure.
Rationale
This is a rather extreme example of the consequences of non-disclosure, as criminal
charges for this kind of behavior are extremely rare. In his trial, Gallene (testifying as the

only defense witness) argued that his behavior was stupid, but not criminal. Do you
agree?
Holding
Yes. Defendants knowing omission of material facts met the statutes requirements, and
the government provided sufficient evidence (including the Defendants own testimony
as to his mental state at the time) to establish that Defendant was guilty.
Facts
Defendant, attorney John Gallene, assisted Bucyrus, a Wisconsin corporation, in filing for
bankruptcy. He then applied to the federal bankruptcy court to act as counsel for
bankruptcy proceedings without disclosing that Bucyruss primary creditors was already
a client of his firms. He was sentenced to 15 months and $15,000 for bankruptcy fraud
and perjury, and now appeals.
Procedural Posture
Defendant applied to act as counsel for bankruptcy proceedings without disclosing that
one of the filing corporations primary creditors was a client of his firms.
Case Name and Citation
ARTHUR ANDERSEN LLP v. UNITED STATES.
544 U.S. 696 (2005)
Issue
Was the lower courts jury instruction flawed? Which outlined Section 1512(b), which
punishes not just "corruptly persuad[ing]" another, but "knowingly . . . corruptly
persuad[ing]" another.?
Rule of Law
Chapter 73 of Title 18 of the United States Code provides criminal sanctions for those
who obstruct justice. Sections 1512(b)(2)(A) and (B), part of the witness tampering
provisions, provide in relevant part:
"Whoever knowingly uses intimidation or physical force, threatens, or corruptly
persuades another person, or attempts to do so, or engages in misleading conduct
toward another person, with intent to . . . cause or induce any person to . . . withhold
testimony, or withhold a record, document, or other object, from an official proceeding
[or] alter, destroy, mutilate, or conceal an object with intent to impair the object's
integrity or availability for use in an official proceeding . . . shall be fined under this title
or imprisoned not more than ten years, or both."

Rationale
The instructions also were infirm for another reason. They led the jury to believe that it
did not have to find any nexus between the "persua[sion]" to destroy documents and any
particular proceeding.[10] In resisting any type of nexus element, the Government relies
heavily on 1512(e)(1), which states that an official proceeding "need not be pending or
about to be instituted at the time of the offense." It is, however, one thing to say that a
proceeding "need not be pending or about to be instituted at the time of the offense,"

and 708*708 quite another to say a proceeding need not even be foreseen. A
"knowingly . . . corrup[t] persaude[r]" cannot be someone who persuades others to shred
documents under a document retention policy when he does not have in contemplation
any particular official proceeding in which those documents might be material.

Holding
Yes, the jury instructions were flawed.
Facts
As Enron Corporation's financial difficulties became public in 2001, petitioner Arthur
Andersen LLP, Enron's auditor, instructed its employees to destroy documents pursuant
to its document retention policy. A jury found that this action made petitioner guilty of
violating 18 U. S. C. 1512(b) (2)(A) and (B). These sections make it a crime to
"knowingly us[e] intimidation or physical force, threate[n], or corruptly persuad[e]
another person . . . with intent to . . . cause" that person to "withhold" documents from,
or "alter" documents for use in, an "official proceeding."[1] The Court of Appeals for the
Fifth Circuit affirmed. We hold that the jury instructions failed to convey properly the
elements of a "corrup[t] persua[sion]" conviction under 1512(b), and therefore reverse.

Procedural Posture

The Supreme Court found the lower courts jury instructions here were flawed in
important respects. The judgment of the Court of Appeals reversed, and the case
remanded for further proceedings.

Case Name and Citation

Greycas v. Proud
484 U.S. 1043; 108 S. Ct. 775;98 L. Ed. 2d 862; 1988 U.S.
Issue
May an attorney be liable for negligent misrepresentation to an adversarial party?
Rule of Law
The tort of negligent misrepresentation and an attorneys duty of care to an adversarial
party.
Rationale
It is not entirely clear why Plaintiff is claiming negligent malpractice rather than outright
fraud, which would have undoubtedly been more straightforward. Defendant clearly and
openly lied in his letter, and Plaintiffs reasonable reliance on this misrepresentation
caused them injury. This misrepresentation was entirely indefensible.
Holding

Yes. Proud may be liable here as someone who generally supplies information and
opinions to others in the course of their business transactions. Judgment stands, and
Defendant is recommended for discipline.
Facts
Defendant, attorney Theodore Proud, wrote a letter to Plaintiff, Greycas, Inc., stating that
his brother-in-law Crawfords farm equipment had no prior liens on it to assist him in
securing an emergency loan. After Crawfords suicide, Defendant learned that the
equipment was already heavily indebted and that Plaintiff had never performed the tax
and judgment searches that he had claimed to have completed in his letter. Plaintiff is
claiming negligent misrepresentation. Defendant argues that he had no duty of care to
the Plaintiff in this situation.

Procedural Posture
Trial Court: Defendant knowingly misrepresented the status of his brother-in-laws
property in an opinion letter used to secure a loan.
Case Name and Citation
Stradford v. Zurich Insurance Co. 2002 WL 31027517 (SDNY 2002)

Issue

Rule of Law

Rationale

Holding

Facts

Procedural Posture

Case Name and Citation

Christian v. Mattell, Inc.
286 F.3d 1118 (9th Cir. 2003)

Issue

Rule of Law

Rationale

Holding

Facts

Procedural Posture