Legal News

One Hot Potato: Cravath Case Bounced Back to Delaware

By Ashby Jones

Well, the situation involving Airgas, Air Products and the law firm Cravath, Swaine & Moore hasn’t resolved itself. But it has gotten a nice little tour of southeastern Pennsylvania and northern Delaware. (Had time to check out the Wyeth exhibitions at the Brandywine, all?)

The latest: the parties will leave Philadelphia and head back down I-95 to Wilmington, where they’ll likely get a final ruling on whether Cravath should be allowed to continue representing Air Products. The latest move comes at the hand of Philadelphia federal judge Edward Robreno, who on Monday kicked the decision back to the Delaware Court of Chancery. Click here for the opinion; here for a writeup from the American Lawyer’s Zach Lowe. Click here, here and here, for LB background on the dustup.

In his ruling Robreno laid out a handful of reasons why the case should be kicked back to Delaware. Among them was the following:

Public policy concerns implicating federalism and comity attach to the decision to allow a federal court to disqualify Cravath from appearing as counsel for a litigant in a state court proceeding. Historically, the credentialing and discipline of lawyers has been a state function. . . . It would constitute an unprecedented intrusion of federal power upon a local court for this Court to dictate to the Delaware Chancery Court that a law firm [Cravath] wasdisqualified from representing a litigant [Air Products] in a proceeding before it. Airgas has not produced any authority, and the Court has not located any, where such an extreme result has obtained.

AmLaw’s Lowe calls the decision “a victory for Air Products and Cravath, which wanted the disqualification issue heard in Delaware.”

At the same time, this may not be the last Robreno sees of the case. He said he will hear Airgas’s case against Cravath over whether the firm should have to pay damages for allegedly violating conflicts rules once the Chancery Court rules on the broader disqualification issue.

Full post as published by Law Blog - WSJ.com on February 23, 2010 (boomark / email).