Wilson Elser Wins Release from Case; Lerner’s Exit Imminent

Eastern District Judge I. Leo Glasser last Friday granted the motion of Wilson Elser Moskowitz Edelman & Dicker to withdraw from the case that has put the firm at sword’s point with its long-time partner, Richard E. Lerner.

The ruling came only one business day before a hearing scheduled for 2 p.m. Tuesday to determine whether the sealed files at the heart of the case should be released. It also came as negotiations on Mr. Lerner’s departure from the firm neared a climax (Read story here).

If Wilson Elser and Mr. Lerner have worked out the terms of his departure, it is likely that Mr. Lerner, in his new status as Richard Lerner P.C., will be representing Frederick M. Oberlander, who is the subject of numerous gag orders triggered by his 2010 filing of information from a sealed court file. Mr. Lerner has been with the firm for 23 years, 16 of them as a partner.

Citing a conflict because both Mr. Lerner and Mr. Oberlander were faced with potential criminal contempt charges, Wilson Elser moved to withdraw in April. Mr. Oberlander, as the client, was left the task of opposing the firm’s motion.

Mr. Lerner, rather than siding with his firm, backed Mr. Oberlander’s legal position that, as his “counsel of record,” he was the only lawyer at the firm authorized to seek to withdraw from the Oberlander case. Mr. Lerner also filed a sworn statement that he could ably represent Mr. Oberlander and that, in any event, his client had waived any potential conflict.

Sidestepping the nettlesome legal issues raised by the firm’s conflict claim, Judge Glasser construed the venom poured out in Mr. Oberlander’s legal papers as tantamount to his “discharging” the firm.

The “words cascading from Oberlander’s submission,” Judge Glasser wrote in the unsealing case, 12-MC-150, were more that enough to meet the catch-all requirement in Eastern District Rule 1.4, allowing withdrawal for “otherwise satisfactory reasons.”

Justice Glasser turned against Mr. Oberlander the words he used in demanding that the firm continue to assign only Mr. Lerner to represent him. Mr. Oberlander had protested that putting another Wilson Elser partner in charge of his case was akin to a farmer’s “force-feed[ing] corn down the gullet of a goose.

Borrowing that language, Judge Glasser described Mr. Oberlander’s opposition to Wilson Elser’s motion to withdraw as asking him “to force feed an unwilling law firm upon an unwanted client.”

Mr. Oberlander’s case was referred to Wilson Elser in April 2010 by his malpractice carrier, Zurich American. Wilson Elser’s general counsel, partner Thomas W. Hyland, assigned the case to Mr. Lerner, as the firm’s lead attorney.

The referral came after Mr. Oberlander had kicked up a storm with the disclosure of information from the sealed file of a government informer.  Mr. Oberlander had excerpted material from the informer’s file in bringing a civil racketeering claim against the informer, Felix Sater.  By that time, Mr. Sater was an executive at the Bayrock Group, a real estate firm, headquartered in Manhattan, which had done deals licensing Donald Trump’s name.

Mr. Oberlander’s 2010 civil racketeering case against Mr. Sater sought $500 million in damages, claiming that Mr. Sater’s 1998 sealed plea to a $40 million stock swindle enabled him to later pull off a real estate scam.

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