A recent Alabama Supreme Court ruling appears to place the label "third-party risk" on Birmingham's Balch & Bingham law firm. That finding raises serious questions about the firm's future, according to a post at banbalch.com. Under the headline "Lethal Blow to Balch & Bingham?" Publisher K.B. Forbes writes:
The decision by the Alabama Supreme Court two weeks ago declaring that Balch & Bingham will stand trial for fraud in ex-Drummond executive David Roberson’s $75-million civil lawsuit appears to be a lethal blow to the once-prestigious, silk-stocking law firm.
The Alabama Supreme Court noted in its decision that the embattled law firm argued that “Balch had owed no duty to Roberson because Drummond, not Roberson, was Balch’s client. . . . ”
During the course of the Roberson appellate proceedings, Balch declared that the firm:
- “owed no duty” to tell the truth to a client’s representative and
- had the audacity to say lying to or misleading someone is a legal service
Both foolish arguments without a doubt have made Balch a third-party risk.
What could that mean? Forbes explains:
Observers appear to agree that the third-party risk of Balch looks like it will impact their clients that are heavily regulated. Shareholders and institutional investors are demanding the highest adherence to legal compliance and social responsibility, while frowning on any kind of third-party risk.
No general counsel or government attorney can justify hiring Balch & Bingham any longer because the firm appears to be a third-party risk.
If you hire Balch, you could be misled or lied to and could end up in federal prison like David Roberson.
Balch lies to a client’s representative and appears to say it is justified because the firm owes no duty to the executive, only the entity he works for.
Balch lies and says in open court that misleading someone or lying is a legal service.
Is it a good idea to make such arguments in court, especially when the matter winds up on appeal before the state's highest court, producing a published opinion that can be read by most anyone? Forbes answers with a resounding no:
The absurdity and sheer stupidity of Balch’s arguments were shredded and gutted in the Alabama Supreme Court decision.
Even Southern Company, Balch’s top client and parent company of Balch’s sister-wife siamese-twin Alabama Power, has compliance rules that state:
We also expect our suppliers/contractors, in their work with us, to conduct themselves with honesty, integrity, fairness and a commitment to legal compliance. Suppliers/contractors are expected to comply with all applicable laws and regulations and certain Southern Company policies….
And now who is waiting in the wings?
Balch’s competitors.
The vultures and wolves smell blood and are salivating for every sweet morsel of Balch’s current clients as well as any seasoned Balch partner, attorney, or staff member that currently works at the embattled law firm and is ready to head to the emergency exit.
The exodus and hemorrhaging begin.
It seems to me that Balch was so focused on the present, getting a leg up on the Roberson lawsuit, that it forgot about the future and the message it was sending to potential clients down the road.
ReplyDeleteThanks for an excellent comment, @10:29. I'd say you nailed it.
ReplyDeleteDoesn't the legal profession have enough PR problems without sending the message that layers have no duty to deal with people truthfully?
ReplyDeleteGood point. And don't forget the second part of the message: lying to or misleading someone is a legal service.
ReplyDeleteThat probably strikes a lot of people as pretty sick stuff.
An alert reader has posted comments at yesterday's post that spotlight important breaking news. Going to copy them here, in hopes that will help bring the stories to more folks' attention:
ReplyDeleteAnonymous said...
wow!
RAGA accepted an $50,000 illegal contribution from a 501c3!
https://twitter.com/JuddLegum/status/1491040027001987083
February 8, 2022 at 9:20 AM
Here is original information referenced in the Judd Legum tweet:
ReplyDeleteHeadline: Republican Attorneys General Association accepts illegal contribution from RFK Jr's anti-vax group
The Republican Attorneys General Association (RAGA) accepted an illegal $50,000 contribution from Children's Health Defense, a leading purveyor of anti-vaccine propaganda run by Robert F. Kennedy Jr. The unlawful contribution, which was received by RAGA last summer, was first disclosed in an 87-page document filed with the IRS last week.
Children's Health Defense is organized as a 501(c)(3) charity, which means that contributions to the group are tax-deductible. As such, under the law, Children's Health Defense is "absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office."
RAGA "elects and re-elects Republican attorneys general nationally." RAGA is organized as a 527 "political organization" dedicated to "influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office."
In other words, a 527 organization is devoted exclusively to activities that are off-limits for a 501(c)(3) charity. The IRS is very clear that a 501(c)(3) cannot make donations to 527 groups:
https://popular.info/p/republican-attorneys-general-association
Here's more on RAGA:
ReplyDeleteThe history of RAGA's leadership, where Alabama AG Steve Marshall is a key figure:
On January 5, 2021, RAGA's "policy arm" — known as the Rule of Law Defense Fund — sent a robocall urging people to come to Washington D.C. on January 6 to "Stop the Steal."
The march to save America is tomorrow in Washington D.C… At 1:00 p.m., we will march to the Capitol building and call on Congress to stop the steal. We are hoping patriots like you will join us to continue to fight to protect the integrity of our elections.
Shortly after news of the robocalls broke, Adam Piper, RAGA's executive director, resigned. But Piper did not explain his resignation or express regret about the robocalls or other activities RAGA engaged in to undermine confidence in the election results. “Serving Republican attorneys general has been the honor of a lifetime and honestly a dream job,” Piper said.
Here is second newsy comment that arrived on yesterday's post. It's about our old "pal" Ali Alexander, and it originates at The Daily Beast:
ReplyDeleteHeadline: ‘Stop the Steal’ Organizer Scored Big Payout at Curious Time
One week after congressional investigators subpoenaed Jan. 6 organizer Ali Alexander, a dormant super PAC sent thousands of dollars to his old consulting firm.
The payout, earmarked for the admirably vague “PAC management services,” came Oct. 16 from “Stop The Steal PAC.” At $6,000, the payment accounted for more than half the money the group raised ahead of the riot, and Alexander’s firm, Vice and Victory, was one of only two vendors.
Interestingly enough, the campaign’s only other vendor was “A Political Firm, LLC,” the company belonging to the super PAC’s treasurer, a full-time compliance consultant named Patrick Krason. Krason denounced the Jan. 6 riot and emphasized to The Daily Beast that his role with the PAC, as with his other clients, didn’t go beyond filing paperwork.
That task, however, appears to have been difficult. And the confusion may impact the Jan. 6 investigation, because while the subpoena specifically requested information about Alexander’s “Stop the Steal” group, it might not have asked for the right information—or at least not all of the right information.
WTF!
ReplyDelete"Just months after a contentious debate that led to the Mountain Brook school system ending diversity training with the Anti-Defamation League and pledging to develop its own curriculum, an incident at Mountain Brook High School has brought the spotlight back on issues of diversity and sensitivity — and how the school addresses those issues.
Central to the story is a photo that shows students doing what resembles the Nazi salute in a classroom, led by the teacher.
On Jan. 18, students in 11th grade history were instructed to stand and do the Bellamy Salute while reciting the Pledge of Allegiance. The teacher, Coach Joe Webb, had explained that the salute had previously been used when reciting the Pledge, but had been retired in the early 1940s because of its resemblance to the Nazi salute. Since then, one places a hand over the heart when saying the Pledge.
The Bellamy salute starts with an outstretched arm, palm down, but during the second phrase, “to the flag,” the palm is turned upward for the remainder of the Pledge.
After explaining the background, Webb instructed the class to rise and give the salute while reciting the Pledge."
https://sjlmag.com/2022/02/08/classroom-nazi-salute-controversy-at-mountain-brook-high-school/
Thanks for sharing a very interesting comment, @10:22. I had not heard about the salute controversy at Mountain Brook High School. Wonder what others have heard about it or what they think about it.
ReplyDeleteWithout question my absolute favorite headline of the year. You've outdone yourself. Just like these scandals, the outrage is spilling out all over the place and you love to see it! Keep going, Mr. Schuler!!!
ReplyDelete