Controversy Grows Over Boies Firm, Document Company

By Anthony Lin
New York Lawyer
New York Law Journal
October 11, 2005

Securities class action plaintiffs suing Tyco International Ltd. have added to the controversy surrounding Boies, Schiller & Flexner and a document production company by accusing Boies Schiller client Tyco of using the company to "dump" 77 million pages of mostly unresponsive discovery documents on them within the last few months.

But the latest complaints also have put an earlier critic in an odd position. Cravath, Swaine & Moore, one of whose partners recently called the use of the document company, Amici, a "disaster" in another matter, is co-counsel to Tyco with Boies Schiller. Armonk, N.Y.-based Boies Schiller was co-founded by star litigator David Boies.

Amici has attracted controversy because the company, which places documents in electronic databases to be used by parties in discovery, is partly owned by four of Mr. Boies' children, three of whom are lawyers at his firm. The alleged conflict of interest created by the connection and the firm's failure to disclose it were cited by former Boies Schiller client Adelphia Communications in its August request that the firm resign as its counsel.

In documents filed Friday in federal court in New Hampshire, plaintiffs represented by Milberg, Weiss, Bershad & Schulman, called Tyco's discovery conduct sanctionable and said the "egregiousness of Tyco's document dump is further compounded by the previously undisclosed relationship between the family of [senior Boies Schiller partner] David Boies and Amici."

The plaintiffs also complained about the expense of using Amici, estimating the ultimate cost of obtaining documents from Tyco would be close to $4 million, of which they claimed $3.3 million would go to Amici.

The filings, which include the plaintiff's agenda for a discovery conference scheduled for today, in many ways echo a letter written last month by Cravath partner Max Shulman, who is representing accounting firm Deloitte & Touche in litigation adverse to Adelphia.

On Sept. 6, Mr. Shulman wrote Southern District Bankruptcy Judge Robert Gerber, who is overseeing Adelphia's Chapter 11 bankruptcy, to similarly complain about his client being "vastly overcharged" by Amici. He said the charges included those associated with "hundreds of thousands (perhaps even millions) of pages of useless, irrelevant documents that Boies Schiller has dumped onto Amici."

Mr. Shulman also called Amici's service "substandard" and said it was "particularly irritating" that members of the Boies family were enriched by the company.

In response to Mr. Shulman's letter, Boies Schiller partner Philip Korologos wrote to Judge Gerber that Mr. Shulman was engaging in a "smear campaign" designed to draw attention from his weak case.

But the Tyco securities plaintiffs, using the Cravath partner's words against his firm, said, "Mr. Shulman's letter may again be prophetic in this case."

In a Sept. 29 letter to Milberg Weiss partner Paul Young, Cravath partner Stephen Madsen rejected the Tyco plaintiffs' discovery complaints. He said the large production resulted from the breadth of the plaintiffs' own discovery requests. He also said the database of documents was easily searchable.

Mr. Madsen also defended the cost structure of the document production as appropriate and said Tyco had gone "out of its way" to satisfy the plaintiffs in the discovery process.

"In light of Tyco's efforts, you do not have any reasonable basis for complaining," he wrote.

Judge Steps Aside After Litigant Hires His Wife

By Dan Lynch
New York Lawyer
July 22, 2005

After ordering a litigant in his court to jail on contempt charges, Palm Beach Circuit Judge Jonathan D. Gerber has recused himself from the case.

The reason: The side he sanctioned has hired a new law firm -- one that employs the judge's wife.

"This doesn't happen very often," said Palm Beach Circuit Court Chief Judge Kathleen Kroll. "It's a judgment call. If a judge feels there's even the hint of an appearance of conflict, that judge then has an obligation to exercise proper discretion."

Frequent or not, the retention of a firm that employs a judge's spouse raises the ethical question of whether a jurist should step down in the face of what could be construed as a deliberate attempt to force him off the case.

Judge Gerber refused to discuss the matter with a reporter.

But legal experts say that litigation is a tough game where recusal efforts are part of the process. Stetson College of Law professor Charlie Rose, an expert in both litigation and judicial ethics, says litigant efforts to create conflicts to remove judges is "an accepted practice as long as it doesn't happen in excess."

"I've seen that before," Rose said. "It's not common, but it's seen as a possible way to remove an impediment. How are you going to prove that? It's like a John Grisham novel."

The case in question has dragged through the courts for nearly a decade.

In March 1996, Amy Habie of Miami bought the assets of Scott Lewis Gardening and Trimming for $300,000 in cash and a $500,000 note. Scott Lewis and his wife, Carol, had operated the firm for many years and held a number of lucrative contracts with estates in the town of Palm Beach, Fla.

Habie incorporated the firm in Delaware as Nical of Palm Beach, although she was permitted by the purchase agreement to operate the firm under the name Scott Lewis Gardening and Trimming while Lewis served as a consultant to Nical. Scott Lewis also continued to operate his own gardening business under that name, although with a noncompete agreement in the town of Palm Beach.

Several months later, Habie and Lewis had a falling out, and Lewis refused to renew his contract as her consultant. Habie stopped payment on the note. Lewis resumed business in Palm Beach, and Habie sued for breach of contract in October 1996.

In 1998, the Lewises reached a settlement with Habie and Nical. Under the deal, each landscaping firm was free to compete for new clients, but their existing clients could not be solicited by the other. Habie also agreed not to use Lewis' name in doing business. Later, Lewis alleged that Habie had continued to use his name, continued to contact his clients and had interfered with the couple's business in other ways.

The result was a prolonged court battle in which a total of six judges have recused themselves at the request of one side or the other, or as the result of a judgment call such as the one recently made by Gerber.

Judicial recusals are regulated both by Florida law and the American Bar Association's Model Code of Judicial Conduct, which is merely a guide unless its provisions are adopted by a state legislature. The law and the code are based on the premise that public trust in judges is vital to the justice system. A judge is required to recuse in the event of the appearance of impropriety even if no actual impropriety exists.

For the past five years, Lewis has represented himself in the suit, with advice from Jack Scarola, a partner at Searcy Denney Scarola Bernhardt & Shiply of West Palm Beach. In April, Gerber disqualified Habie's lead lawyer, nationally prominent litigator David Boies of New York. His law firm, Boies, Schiller & Flexner, is headquartered in Armonk, N.Y., employs 200 lawyers and operates nine offices around the country, including four in Florida.

Judge Gerber ruled that because of financial ties between Boies and Habie -- she serves as the chief financial officer of Boies' law firm -- Boies and his firm were too conflicted under Florida Bar rules to continue representing Habie and her company, of which Boies is part owner through a trust.

Gerber also found a Habie associate, Patrick Bilton, guilty of contempt in May and ordered him to pay a $500 fine and serve 30 days in jail. That order has been stayed pending appeal.

On July 11, Gerber summoned both Habie and Bilton to appear before him on Sept. 9 to explain why they should not be found guilty of contempt for violating the settlement agreement by continuing to contact Lewis' clients. Then, Gerber received notice that Greenberg Traurig, his wife's employer, would be representing Habie, Bilton and Nical.

The judge immediately recused himself.

Alan T. Dimond, the Greenberg partner who serves as the firm's lead counsel, could not be reached for comment, nor could his Greenberg associate, Mark F. Bideau.

Bruce Rogow, the Fort Lauderdale, Fla., lawyer who has served as Nical's local counsel, said that he welcomes the help.

"This is a sprawling case," Rogow said. "I was surprised to discover that there was a connection between the judge and Greenberg Traurig, but this was not a litigation tactic. These are good people."

Scarola disagreed. "It's most definitely a litigation tactic from my perspective," he said.

Lake Lytal Jr., a partner in Lytal, Reiter, Clark, Fountain & Williams of West Palm Beach and an experienced Palm Beach County, Fla., litigator, said: "This obviously put Gerber in a position where he had no choice. No judge is going to handle a case in which his wife's firm is involved. I don't know that there's anything unethical in a circumstance like this. It's not unethical to take advantage of a situation."

In his recusal order, Gerber asked the clerk of the court to "randomly re-assign this case."

The new judge is Amy Smith, a former student at Nova Southeastern University's law school.

Rogow, who has taught on the Nova law faculty for three decades, said he sees no conflict in Smith presiding over the case, and that he has practiced before other students who have risen to the bench.

"These are not clear-cut matters," said Rose, the Stetson law professor. "You have a right to hire who you want. The courts presume that's done in good faith. There's always going to be another lawyer and another judge."

                               The Lawyer Landscaper

Paul Braverman
The American Lawyer
July 1, 2005

"Page Six," The New York Post's gossip section, is usually more concerned with Paris Hilton than professional ethics. But an article in May proves that at least one lawyer has the star power to keep up with Paris. The headline-"Boies Loses Another One."

Boies, of course, is David Boies, the founder of Boies Schiller & Flexner. "Loses Another One" is a reference to the latest-and perhaps the last-battle in the long-running war between the Armonk, New York, lawyer and Scott Lewis, a Florida gardener. After nine years of litigation, over $500,000 in sanctions and attorneys fees assessed against Boies Schiller and its client, and two referrals to the state bar for disciplinary proceedings, Boies may finally be buried.

The firm was disqualified from further involvement in the case by Judge Jonathan Gerber of the Palm Beach County Court, who referred Boies Schiller to the Florida bar for investigation and possible disciplinary action. He also sentenced Patrick Bilton, one of Boies's business partners, to 90 days in the Palm Beach County Jail for criminal contempt.

Judge Gerber read the order from the bench. Afterward, Lewis went out to the hallway, shed a tear of relief, then went home for a quiet celebration with his wife and children. He's happy, but afraid that he hasn't seen the last of David Boies.

The odyssey began in 1996, when Lewis sold his gardening business to Boca Raton resident Amy Habie. Months later, Habie sued Lewis, claiming that Lewis was violating a noncompete agreement by stealing clients. Lewis, in turn, claimed that Habie never paid him the money she owed. Habie was represented by Boies, who was with Cravath, Swaine & Moore at the time. They were first introduced by a law school friend of Boies's who was handling her bitterly contested divorce from Guatemalan textile tycoon Joséé Habie.

Lewis filed a motion to dismiss, which was granted by a Florida judge. In response, the veteran of International Business Machines Corporation's epic antitrust battle with the U.S. Department of Justice filed a 76-page antitrust and racketeering complaint against Lewis in federal court in Miami. Conspiracy was an essential element of the claim. Lewis's coconspirators, according to Boies, included two other gardeners and the guy who installed the sprinklers.

In 1998 the case worked its way up to the U.S. Court of Appeals for the Eleventh Circuit, which ruled against Habie and Boies. A settlement was reached just before the ruling, but questions about Habie's compliance with that agreement have dragged on ever since. Lewis has represented himself pro se since 2000 (a period which includes nine appeals by Boies Schiller); Boies has represented Habie for free throughout the proceedings. Twenty-three lawyers from Boies Schiller (which inherited the matter from Cravath) have worked more than 10,000 billable hours on the case, according to documents filed in court by Boies Schiller. An expert for Lewis has estimated the time to be worth $4.5 million.

There are many sides to the relationship between Boies and Habie. So many sides, in fact, that Boies suffers a conflict of interest, according to a ruling by Judge Gerber, because a trust set up for his children's benefit owns a 25 percent interest in Nical of Palm Beach, Inc. (Nical was set up by Boies for Habie to acquire the gardening business). Habie, who owns 50 percent, is the chief financial officer of Boies Schiller. The third partner in Nical is Bilton. He has been convicted eight times for narcotics trafficking and money laundering. Bilton's wife, Ann Hines, is also an employee of Boies Schiller, although the firm declined to specify what she does for the firm. Boies and Habie are also officers in a Nevada corporation called Diamond B Ranch, Inc.

The case has been an ethical morass for Boies. His firm and its client have been sanctioned and held in contempt at least ten times. Boies is not allowed to take depositions in the case unless a Florida attorney is present. In 2003 the Florida bar found probable cause that his funding of the litigation violated Florida rules of professional responsibility. The state court declined to punish Boies, but his personal appearances in Palm Beach dropped sharply after the finding. If the Florida bar pursues the ethics complaint suggested in the most recent order, Boies could be disbarred from practicing in the state.

David Boies did not return phone calls seeking comment.

                    Bar's Beef on Lawyer Rebuffed

By Lucy Morgan
Times Tallahassee Bureau Chief
May 12, 2004

TALLAHASSEE - Four years ago lawyer David Boies was in Florida courtrooms defending Vice President Al Gore in a historic legal battle that decided the presidency.

Lately, Boies has been in Tallahassee defending himself against charges brought by the Florida Bar, which accused Boies of spending hundreds of thousands of dollars helping his law firm's chief finance officer pursue a civil suit in Palm Beach County.

Circuit Judge George S. Reynolds dismissed the Bar complaint Tuesday after strongly suggesting the Bar had no case.

"To me it's a fairly simple set of facts," Reynolds told lawyers for Boies and the Bar in an April 30 hearing. "If I want to advance all the legal fees in the world and I want to advance all the court costs in the world, can I do it and not be in violation of the Florida Bar rule on giving financial assistance to a client. My answer ... is clearly yes, you can."

Many other Florida lawyers would be in trouble if the Bar prosecutes lawyers who advance court costs and fees to their clients, Reynolds noted.

Talbot D'Alemberte, former president of the Florida and American bar associations, and three other national experts on legal ethics filed affidavits supporting Boies.

The charges were filed in December after Palm Beach Circuit Judge David F. Crow asked the Bar to pursue a complaint. Edward Iturralde, the lawyer representing the Bar, said it was the first time the Bar has filed charges against a lawyer for advancing fees and costs.

"There's always a first time for everything," he said when asked about the case Tuesday.

Boies spent more than $400,000 helping Amy Habie, the chief finance officer at one of his Florida offices, pursue litigation with a competing lawn maintenance business. The lawsuit led to a four-year post settlement battle, appeals to six other courts and numerous hearings and orders since it was filed in 1996.

Boies practices law in New York and has offices in Miami, Fort Lauderdale, Orlando and West Palm Beach. He is not licensed to practice law in Florida but is frequently permitted by the courts to represent individual clients. If successful in the case against Boies, the Bar could have blocked Boies from appearing in Florida courts.

Richard McFarlain, a Tallahassee lawyer who also represented Boies, said he believes Boies and the Bar will have a good relationship in the future.

- Times researcher Kitty Bennett contributed to this report.

Florida Bar Hits David Boies With Ethics Complaint

Laurie Cunningham
Miami Daily Business Review
December 16, 2003

The Florida Bar has filed an ethics complaint against famed Microsoft litigator David Boies, alleging that he violated Bar rules by paying more than $400,000 in legal fees for a client his firm is representing in a Palm Beach County contract dispute.

Boies, 63, who represented Al Gore in the 2000 presidential election recount battle, is charged with providing financial assistance to a client, Amy Habie of Miami, according to the Bar complaint. The complaint was filed with the Florida Supreme Court on Dec. 11.

According to the complaint, Boies' firm, Armonk, N.Y.-based Boies Schiller & Flexner, not only represented the affluent Habie for free but paid more than $400,000 to other law firms who worked on the case. Under Florida Bar Rule 4-1.8(e), it is generally a conflict of interest for an attorney to provide financial assistance to a client in connection with pending or contemplated litigation.

Neither Boies' attorney, Richard McFarlain of Tallahassee, nor Bar officials would comment on why Boies was financing Habie's litigation. Boies could not be reached for comment.

But Scott Lewis, who has been locked in litigation with Habie for years, claims that Habie is the chief financial officer of Boies' law firm. According to Lewis, Boies knew Habie from representing her in an early 1990s divorce and child custody battle with her ex-husband, a Guatemalan textile manufacturer.

If Boies is found guilty of the ethical violation, it is unclear what remedy The Florida Bar can seek. McFarlain said The Florida Bar has no jurisdiction to disbar Boies or suspend his law license because he is licensed by the state of New York.

Florida Bar Counsel Edward Iturralde in Tallahassee said the Bar could recommend that Boies be prohibited from litigating in Florida. "If he is disciplined in this case, he won't be able to appear pro hac vice in the future," Iturralde said. What New York's attorney regulatory agency will do depends on New York's reciprocity rules, Iturralde said.

In cases against Florida Bar members initiated by other state bars, The Florida Bar often follows up and investigates the case.

Boies gained fame in the past decade for his high-profile victories in the Microsoft antitrust case. Boies' firm has offices in Miami and several other locations in Florida. Last year, it merged with Miami-based Zack Kosnitzky.

The Boies case was referred to The Florida Bar by Palm Beach County Circuit Judge David Crow, who is overseeing the underlying contract dispute between Boies' client, Amy Habie, and Lewis, a West Palm Beach gardener. The two have been battling in court since Lewis and his wife, Carol, sold the assets of their family gardening business to Habie in March 1996.

The parties settled their differences in August 1998, but have been suing each other over compliance with the terms of their settlement agreement ever since. Throughout the litigation, Habie and her attorneys have been sanctioned nine times by six different judges for violating at least 13 court orders related to the settlement and discovery orders.

In February, Lewis, who is handling the case pro se, filed a motion asking Judge Crow to disqualify Boies from the case because his firm was bankrolling Habie's five-year court battle against him. Having Boies' firm pay Habie's legal fees gave her an unfair advantage because she had no financial incentive to resolve the dispute quickly, Lewis argued.

"No reasonable person ever would have set aside 10 sanction orders by six different judges and continued the relentless pursuit of the destruction of the Lewises without the assurances and backing of powerful and committed legal counsel such as David Boies," Lewis said in court papers.

Boies conceded that his firm had been paying Habie's legal fees, but argued that Florida Bar rules did not prevent his firm from providing legal services pro bono.

On Feb. 20, Judge Crow denied Lewis' motion for disqualification, saying that disqualifying Boies from the case would not eliminate the Habie's unfair advantage because that would not stop Boies' firm from continuing to pay her legal fees.

But Crow also ruled that Boies had violated Florida Bar rules by financing Habie's litigation. Crow said Habie's case did not fall under either of the exceptions allowing lawyers to pay a client's fees. Under Bar rules, lawyers are allowed to advance court costs and fees to clients if they have a contingency agreement that provides for repayment based on the outcome of the case. They also are allowed to represent poor clients for free.

There was no evidence that Habie had a contingency agreement with Boies' firm and Habie is far from poor, Judge Crow said. "The plaintiff's law firm not only donated its own services to advance the interests of its nonindigent client, but has paid hundreds of thousands of dollars in litigation expenses and attorney's fees on behalf of its client with no obligation on the part of the client to repay any portion of those funds," he wrote.

Judge Crow forwarded his ruling to The Florida Bar, which conducted its own investigation and filed a complaint with the Florida Supreme Court.

On Monday, Chief Justice Harry Lee Anstead issued an order giving Chief Leon County Circuit Judge Charles Francis in Tallahassee two weeks to appoint a judge to serve as referee in the disciplinary case against Boies. The referee will make factual findings and recommend an appropriate sanction, which the state Supreme Court ultimately must approve or disapprove.
Lewis hailed the Bar for filing a complaint against one of the most prominent trial lawyers in the country. "There aren't many countries where a gardener can obtain justice against one of the most powerful and politically connected men of the land," Lewis said. "It's phenomenal what's happened here."

Boies' lawyer, Richard McFarland, declined to comment on the case other than to say that the Bar complaint is a "well-crafted piece of work." McFarlain, a partner at McFarlain & Cassedy, has 20 days to file a response on Boies' behalf. He said he probably will request an extension.

Courtroom Giant Faces Ethics Hearing
Lawyer David Boies Who
 Represented Gore in Trouble With State Bar

By Mary McLachlin
Palm Beach Post
July 19, 2003

WEST PALM BEACH -- The Florida Bar, which got F. Lee Bailey disbarred on ethics charges, is targeting another courtroom lion with an international reputation, heavyweight clients and a Palm Beach County connection.

David Boies, a perennial on the National Law Journal's list of most influential lawyers, faces three charges of ethics violations based on his involvement in a bizarre legal battle between the owners of two Palm Beach lawn-care companies.

A Bar grievance committee in Tallahassee found probable cause on July 10 that Boies had violated rules against misconduct, giving money to a client and improper supervision of other lawyers. The finding is similar to an indictment by a grand jury, and the charges will be heard in a trial proceeding by a judge appointed by the Florida Supreme Court.

Edward Iturralde of the Bar's lawyer discipline office said he couldn't comment on whether any other attorneys connected with the case were under investigation.

The Supreme Court stripped Bailey of his license in November 2001 after the Bar charged him with seven ethics violations related to his representation of an international drug smuggler and several million dollars in fees. He also lost his license in Massachusetts.

Boies is not licensed to practice in Florida, but he appears in state courts on a case-by-case basis called pro hac vice in legal terminology. If he's found guilty, the Supreme Court could bar him from such appearances for any length of time or impose a lesser punishment.

The charges, stemming from a local dispute over lawn-care contracts for Palm Beach estates, are a unique stain on the reputation of Boies, who led the federal government's antitrust crusade against Microsoft and argued in vain for Vice President Al Gore in the aftermath of the November 2000 presidential election. His usual clientele includes corporate giants such as Tyco, CBS, IBM, Texaco Corp., Exxon, Mobil, DuPont, Napster and the New York Yankees.

In the past week, he won a class-action ruling for thousands of models suing major modeling agencies in New York and lost a decision in Court TV's suit to strike a New York law banning cameras in courtrooms.

Boies, 63, designated his Yale Law School friend and business partner James Fox Miller of Fort Lauderdale to be his spokesman in the Florida Bar proceeding. Miller, a former Bar president, said Boies had never been censured in more than three decades of practice.

"I have known David for 40-plus years," Miller said. "If there were one lawyer in the country that could be considered the best, it would be David. Having dealt with the monumental cases he has, done the extraordinary things he's done in his life -- I think it's a shame he's been accused of something like this, and I'm upset about it."

The Bar acted after Circuit Judge David Crow criticized the firm's actions in a February ruling and forwarded his findings to the organization's lawyer-regulation section.

The case that led to the charges started out in 1996 as a breach of contract action between Amy Habie, owner of Nical of Palm Beach Inc., and Scott and Carol Lewis of Scott Lewis Gardening & Trimming. It degenerated into a bitter, seven-year war with multiple contempt of court orders and sanctions against Nical. Judge Crow called the case "a sad commentary on the inability of the legal system and the courts of our state to resolve a simple contract dispute, when one is willing to litigate without regard to costs."

The Boies, Schiller & Flexner firm, based in Armonk, N.Y., and with offices in Miami and Fort Lauderdale, has acknowledged providing years of free legal services to Habie and paying other lawyers more than $400,000 in fees and costs to fuel the litigation.

The firm paid University of Miami law Professor Terence J. Anderson $212,000 for his services, $25,000 to Bruce Rogow, a Nova Southeastern University professor and constitutional law expert, and more than $46,000 to the West Palm Beach firm of Theodore Leopold.

Testimony and court filings in the past year disclosed that Boies had made Habie chief financial officer of the far-flung law firm, with a salary of $120,000 a year.

Lewis alleged in court and in documents that Boies was willing to provide unlimited legal and financial help because of a personal relationship with Habie, whom he first represented in 1992 in a divorce and custody fight with her ex-husband, a Guatemalan textile manufacturer.

Lewis, who also acknowledged having an affair at one time with Habie, said she and Boies spent last New Year's in Aruba and have been seen together at parties and tennis matches.

"I will comment on the disciplinary matter to a reasonable extent," Miller said, "but I don't think it's right to talk about the people involved."

The Lewises' reactions to the Bar charges were terse.

"His ethics are appalling," Carol Lewis said.

"Everybody says Boies is a genius, but I don't see it," her husband said. "I see Goliath falling."