Legal Malpractice

Cuban Embargo, Legal Advice and Legal Malpractice

By (Andrew Lavoott Bluestone)

It's winter, and our thoughts turn to the Caribbean.  Here, a Philadelphia law firm, 1400 lawyers strong, gave commercial advice pertaining to the Cuban embargo, and are now defendants in a legal malpractice case.  Here is the story from Bloomberg, via the Caribbean news agency.

"NEW YORK, USA (Bloomberg): Morgan, Lewis & Bockius, the largest Philadelphia-based law firm with 1,400 attorneys, gave advice regarding sales to Cuba under the US trade embargo that led to a criminal investigation, a lawyer for an ex-client has argued.

Dan and Stefan Brodie, the founders of Purolite Corp., a manufacturer of specialty resins for water purifiers based outside Philadelphia, sued Morgan Lewis in 2004 for legal malpractice. The case began in the early nineties when an accountant questioned a sale by Purolite's Canadian subsidiary to a company in Cuba. Purolite claims Morgan Lewis attorneys repeatedly advised them that the sales were legal because there was no US involvement.

"Morgan Lewis's malpractice, sloppy work and their bad advice cost Purolite and the Brodies and it cost them severely," said Marc Kasowitz, a lawyer for the brothers, in opening arguments on Friday in state court in Philadelphia.

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

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

A lawyer for Morgan Lewis said the firm advised the company not to sell to Cuba and that Purolite continued to do so because they wanted the money. "

Full post as published by New York Attorney Malpractice Blog on January 14, 2008 (boomark / email).