Articles Tagged with Legal Intelligencer

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In the May 17, 2018 edition of The Legal Intelligencer, Edward Kang, Managing Member of KHF, writes Key Points in Negotiating and Preparing Settlement Agreements and Releases.

With fewer and fewer cases going to trial, lawyers must be competent in settling claims and preparing settlement documents that accurately capture the terms of the settlement. While settlements often bring a sigh of relief from lawyers and their clients, getting from the point of settlement to execution and payment—this article is written from mostly the plaintiff’s perspective—can take months, and sometimes requires court-intervention. This usually happens, as stated in more detail below, when one side wants to renegotiate the material terms of a settlement agreement; and the main reason for seeking to renegotiate is often the other side was not adequately prepared going into and during settlement negotiations. This is particularly true in complicated cases involving multiple parties and claims.

Most litigators, if not all, have negotiated settlements and prepared many settlement documents. And there are many articles written about the “dos and don’ts” of negotiating a settlement or preparing a settlement document. This article focuses on a few additional points for practitioners to consider when negotiating a settlement or preparing a settlement document. Continue reading →

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My last article, dated Jan. 25, visited the RICO pleadings requirement in light of the class action RICO lawsuit filed against Harvey Weinstein. The Weinstein RICO action is brought under the most popular section—Section 1962(c). In the article, I discussed the stringent requirements of pleading and proving civil RICO claims and outlined some of the obstacles for plaintiffs.

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The complexity with RICO (the Racketeer Influenced and Corrupt Organizations Act), however, does not end there. Almost all RICO lawsuits filed are brought under Section 1962(c) (note: violation under Section 1962(d) relating to conspiracy to violate a substantive section is routinely asserted whenever there is a violation of a substantive section). But, what about Sections (a) and (b)? Why are these sections rarely used? Is it because these sections are generally inapplicable? While the specificity of Sections 1962(a) and (b) compared to the breadth of Section 1962(c) is a reason these sections are not commonly used, it is also because they are more difficult to understand, and often misunderstood. In effect, these sections have become virtually forgotten. While many lawyers have an understanding—ranging from basic to advance—of Section (c), far fewer understand (a) and (b).

Pleading and Proving a RICO Violation Under Section 1962(a)— Investment of Income

Section 1962(a) is primarily concerned with money laundering activity. This section makes it unlawful for “any person who has received any income derived … from a pattern of racketeering activity … to use or invest … any part of such income … in acquisition of an interest in … any enterprise ….” Here, the RICO enterprise is the “prize” of the racketeers whereas the RICO enterprise is the “instrument” of the racketeers under Section 1962(c).

Section 1962(a) prohibits investing any income derived from a pattern of racketeering activity to acquire any interest in an enterprise. The section prohibits a person from using “dirty money,” for instance, to buy a membership interest in a legitimate business. As stated above, money laundering is typically the most common goal of the racketeers under this section. By investing dirty money into a legitimate business and, in turn, using the business to write checks to themselves (or affiliates), the racketeers complete the money laundering cycle.

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In the January 25, 2018 edition of The Legal Intelligencer, Edward Kang, Managing Member of KHF, writes on How RICO Plays a Role in the World of Harvey Weinstein and #MeToo.

Overcoming Obstacles

Who in civil litigation does not love a good RICO claim? Its boundaries are seemingly endless, and in the case of Harvey Weinstein—perhaps one of the most vilified defendants on the planet right now—there is the possibility of catastrophic implications, as if being the face of an entire movement (#MeToo) is not bad enough.

Civil claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961-1968 (RICO Act), are highly desirable for plaintiffs and their attorneys because, if successful, they provide for treble damages, plus attorney fees and costs of litigation. Very few plaintiffs succeed on a RICO claim, however, so the decision to file one should not be made lightly. Many plaintiffs fail during the pleadings stage, and their claims are dismissed under Rule 12(b)(6). For defendants, like Weinstein, the possible implications of RICO can be disastrous. This potential implication is why defendants of civil RICO claims are eager to settle if the claim survives a motion to dismiss and shows a strong likelihood of surviving a motion for summary judgment. For example, in 2016, Trump University did just that—it settled a civil RICO suit for $25 million, which paled compared to its potential exposure of $170 million.

Background

The RICO Act was passed in 1970 as part of the Organized Crime Control Act of 1970 to combat large organized crime operations led by the American Mafia and their growing infiltration of legitimate businesses and organizations. Although the RICO Act was drafted to bring down gangsters, it is certainly not limited to that purpose and has evolved into a mechanism to confront business fraud and corruption over the last half-century. This is evidenced by the recent high-profile civil RICO lawsuit filed against Harvey Weinstein.

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In the January 5, 2018 edition of The Legal Intelligencer, Edward Kang, Managing Member of KHF, writes A Primer on International Chamber of Commerce Arbitration for Litigators.

Arbitration, whether compulsory or voluntary, is commonplace these days as a less expensive and more efficient resolution to litigation than trial. Litigators in Pennsylvania are familiar with the Court of Common Pleas Compulsory Arbitration Program for cases with an amount in controversy of $50,000 or less. For cases with a larger amount in controversy, parties will often agree to arbitrate with a company offering a private arbitrator, such as AAA, JAMS and ADR Options.

In cases involving international disputes, the arbitration venues commonly found in contract include, the London Court of International Arbitration (LCIA), Hong Kong International Arbitration Centre (HKIAC), Swiss Chamber’s Arbitration Institution (SCAI), Singapore International Arbitration Centre (SIAC), German Institution of Arbitration (DIS), Stockholm Chamber of Commerce (SCC), Vienna International Arbitration Center (VIAC), International Centre for Settlement of Investment Disputes (ICSID), and the International Court of Arbitration for the International Chamber of Commerce (ICC).

The number of international arbitrations has been increasing due largely to the growing number of courts in foreign countries recognizing and enforcing foreign arbitral awards. An ICC arbitral award, for instance, can now be enforced in China, where its courts refused to recognize and enforce foreign arbitral awards against its citizens on many occasions.  It is becoming increasingly likely for practitioners to face a dispute over a contract providing for arbitration before one of these international forums. This is true even with smaller cases involving an amount in controversy under $50,000.

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ETK-2017-Head-Shot-200x300In the November 2, 2017 edition of The Legal Intelligencer, Edward T. Kang, managing member of the firm, writes on the liability attorneys face in regards to nonclients.

In Pennsylvania, traditionally, if lawyers or other professionals, such as accountants, performed their professional duties negligently, they could only be held liable to those with whom they were in direct contractual privity—in other words, their clients. Others who may have suffered damage because of that negligence—for example, a party to a transaction relying on the other party’s lawyer’s faulty opinion letter, or a bank relying on an opinion letter prepared by a borrower’s lawyer while extending credit to the borrower—would be without a claim in tort.

In much of the country, however, courts will extend the liability of professionals to cover nonclient third parties injured by the negligence of professionals in certain situations. This liability is typically found under a theory of negligent misrepresentation, adopted from Section 522 of the Restatement (Second) of Torts. Section 522(1) provides: “One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.”

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In the August 21, 2017 edition of The Legal Intelligencer, Henry Donner, Of Counsel at KHF writes on the Practitioners’ Guide to Navigating New Mechanics’ Lien Law Amendments.

By: Henry DonnerConstruction-300x180

Pennsylvania’s Mechanics Lien Law of 1963 was amended in late 2014 to require the commonwealth’s Department of General Services to create an internet-based State Construction Notices Directory. As required by the law, the directory went live on Dec. 31, 2016, providing a standardized, statewide, internet-based system for construction notices. This statutory scheme imposes new requirements on project owners, contractors, and subcontractors, compliance with which can drastically affect those parties’ rights under the Mechanics Lien Law. Practitioners representing any of the traditional parties in a construction matter should be sure to familiarize themselves with these new provisions, and advise their clients accordingly.