Citing the shutdown of the federal government, the U.S. Court of Appeals for the D.C. Circuit issued an order Wednesday staying all proceedings in the litigation brought by U.S. law firms related to presidential executive orders seeking to punish them for representing clients that President Donald Trump opposes.
Meanwhile, 1,400 miles southwest, the U.S. Trustee in Houston has asked the federal court to issue the same order in the government’s litigation against the Jackson Walker law firm related to the romance scandal involving former bankruptcy judge David Jones in the Southern District of Texas.
In both cases, the government has filed motions seeking the litigation be paused because the lawyers for the Justice Department — the U.S. Trustee is the DOJ’s bankruptcy court watchdog — are not permitted to work during a government shutdown except in extreme circumstances.
Susman Godfrey v. Trump
In a one-page order, the D.C. Circuit granted the motion by the U.S. Justice Department requesting that all matters related to the lawsuits brought by Susman Godfrey, Perkins Coie, WilmerHale and Jenner Block be temporarily stayed for the duration of the federal government shutdown. Once the governmental agencies reopen, the appellate court said that the “parties are directed to comply with the court’s order” regarding scheduling and deadlines for motions “within 30 days of the date that appropriations are restored and the Department of Justice attorneys are permitted to resume their usual civil litigation functions.”
Susman Godfrey sued the Trump administration and about two-dozen federal agencies in April after President Trump issued an executive order that accused the Houston-based law firm of “egregious conduct and conflicts of interest” and representing “clients that engage in conduct undermining critical American interests and priorities.” The presidential EO suspended “security clearances held by individuals at Susman Godfrey pending a review of whether such clearances are consistent with the national interest.”
Susman Godfrey sued, and a federal judge in Washington, D.C. ruled that President Trump’s EO was unconstitutional and issued a restraining order preventing enforcement of the order. The federal government has appealed.
The lawyers for Susman Godfrey and the other firms did not oppose the government’s motion, according to court documents.
U.S. Trustee v. Jackson Walker
On Wednesday, the U.S. Trustee filed a two-page petition in the Professional Fee Matters Concerning the Jackson Walker Law Firm asking U.S. District Chief Judge Alia Moses of the Western District of Texas who is overseeing the litigation to issue a similar stay in that matter.
The U.S. Trustee is seeking to claw back millions and millions of dollars in legal fees that bankrupt companies paid to Jackson Walker during a time period when a Jackson Walker lawyer, Elizabeth Freeman, was secretly having a romantic relationship with the bankruptcy judge, which the Trustee argues violated legal ethics and disclosure duties.
“Absent an appropriation or continuing resolution, Department of Justice attorneys and employees, including the U.S. Trustee and his staff, are prohibited from working, even on a voluntary basis, except in very limited circumstances, including emergencies involving the safety of human life or the protection of property,” the Trustee wrote in the motion. “The U.S. Trustee requests that, at that point, all current deadlines for the parties be extended commensurate with the duration of the lapse in appropriations – i.e., each deadline would be extended by the total number of days of the lapse in appropriations.”
In the trustee’s petition, he states that “counsel for IEH, Strike, and GWG have authorized counsel for the U.S. Trustee to state that they have no objection to this motion.” There is no mention on the position Jackson Walker’s lawyers are taking on this request.