Chief U.S. Bankruptcy Judge for the Southern District of Texas, Eduardo V. Rodriguez, has been told in three separate motions to strike expert reports filed by Jackson Walker and the U.S. Trustee in the litigation over whether more than $18 million in fees awarded to the law firm can be clawed back.
The litigation stems from public reporting on a formerly secret romantic relationship between then-bankruptcy judge David Jones, who resigned in October 2023, and former Jackson Walker bankruptcy partner Elizabeth Freeman, who left Jackson Walker in December 2022 after admitting to the relationship. The U.S. Trustee has identified 33 cases in which former judge Jones served as judge or mediator and Jackson Walker and its former partner Freeman were awarded millions in fees.
On Thursday, the U.S. Trustee and Jackson Walker filed dueling motions to strike, with the law firm arguing the expert opinions of Richard J. Davis and Jonathan C. Lipson — a retired partner at Weil, Gotshal & Manges who now is in private practice, and a tenured bankruptcy law professor at Temple University-Beasley School of Law, respectively — and the U.S. Trustee arguing the same about an expert opinion from Renee Jefferson, who is the Larry Doherty Chair in Legal Ethics at the University of Houston Law Center.
The U.S. Trustee argued Jefferson’s report is labeled as a rebuttal to the report filed by Lipson but that it failed “to limit its scope” to the contents of Lipson’s report.
Lipson’s report, in part, found that Jackson Walker sought out an ethics opinion from Peter Jarvis of Holland & Knight who, according to Lipson, advised the firm “should disclose what it knew of the relationship to its clients and thereafter make disclosure or seek recusal.” But instead, according to Lipson’s report, Jackson Walker decided to “[s]ay nothing at all” and “further bury evidence of the relationship” by entering a “confidential withdrawal agreement” with Freeman, which required both parties to agree that “all preceding discussions between you and JW, regarding your relationship with Judge Jones are confidential and shall not be disclosed or revealed to any third party.” The confidentiality provision contained several exceptions, including if disclosure was “required by law.”
While Lipson’s report concluded that Jackson Walker had a duty to disclose the Freeman-Jones relationship, the Jefferson report “seeks to make an affirmative case that the actions taken by Jackson Walker with respect to the romantic, intimate, financial, and cohabitating relationship between Freeman and Jones were reasonable,” the U.S. Trustee argued.
Jefferson’s lack of experience with internal investigations — and her testimony that she’s not an expert in Texas partnership law, the bankruptcy code, bankruptcy rules or local rules — means she is “unqualified to offer an expert opinion regarding Jackson Walker’s disclosure obligations in this proceeding or to offer a belated affirmative opinion on the reasonableness of Jackson Walker’s actions regarding the relationship between Freeman and Jones.”
The U.S. Trustee told Judge Rodriguez Jefferson’s report was “untimely or unresponsive” and that her testimony should be excluded from trial.
“The Jefferson report does not materially rebut the Lipson report or the contents of the Lipson report, but rather attempts to address the reasonableness of Jackson Walker’s actions,” the U.S. Trustee argued. “… Despite not forming an opinion as to whether Freeman and Jones’s relationship created a conflict, the Jefferson report offers disguised affirmative opinions that Jackson Walker took reasonable steps when presented with information about Freeman and Jones’s relationship. These are new opinions and theories that are not limited to attacking opinions and theories offered in the Lipson report.”
The motion quotes from deposition testimony given by Jefferson in which she states her report “offered no opinion on whether the relationship between Freeman and former Judge Jones rose to the level of a conflict of interest even when she was at the firm” and “was not asked to reach an opinion as to whether the relationship between Freeman and Judge Jones rose to the level of constituting a personal conflict of interest that would require disclosure.”
Jefferson’s opinion that Jackson Walker’s actions after learning of the relationship “were reasonable,” is “meaningless,” the U.S. Trustee argued, “because she never opined on the existence of a personal interest conflict.”
Jackson Walker argued Lipson’s report contains parroted arguments from the U.S. Trustee as well as “legal conclusions” that should be stricken because “[c]onclusions about the law belong only to the Court.” The firm argued that Lipson’s conclusions about its disclosure duties are “identical” to those espoused by the U.S. Trustee.
“… Mr. Lipson is being proffered as a cheerleader who will testify to the U.S. Trustee’s preferred contentions,” Jackson Walker argued. “Such testimony is inadmissible.”
The firm also argued Lipson isn’t qualified to offer opinions about the Texas partnership law or the requirements of Texas ethics laws.
In a series of bullet points, Jackson Walker argued several opinions in Lipson’s report “involve” his legal analysis. Those include that Rule 2014 requires the disclosure of connections to judges, that Jackson Walker had a duty under the rule to disclose the Freeman-Jones relationship, that the rule imposes a disclosure obligation on a lawyer who knows about an intimate relationship between a law partner and a bankruptcy judge and that under Texas law, and that Jackson Walker is liable for the acts of its partners.
“Fifth Circuit precedent requires this Court to exclude these and other of Lipson’s opinions because Mr. Lipson’s legal analysis and conclusions about bankruptcy law, bankruptcy rules, and Texas partnership law infect his entire report,” the firm argued. “Legal issues are reserved for the Court’s interpretation.”
Jackson Walker’s attacks on Davis’ report include that it parrots the U.S. Trustee’s arguments, that he fails to explain the basis for his “broad opinions,” rendering them “unreliable” and “irrelevant,” and that he has “no prior experience serving as an expert witness on investigations.”
“Other than generalized descriptions of past investigative work (e.g., ‘conducting major investigations’ on behalf of ‘corporations of their Boards of Directors, a not-for-profit entity and a law firm’), the Davis Report provides no specifics about the investigations engaged in by Mr. Davis,” Jackson Walker told the court. “Did any investigations involve workplace conduct? How about a partner lying to fellow law partners about her personal life? We are left guessing.”
The U.S. Trustee is represented by Vianey Garza, Alicia L. Barcomb, W. Joel Charboneau and Brian P. Thill of the U.S. Department of Justice.
Jackson Walker is represented by Jason L. Boland, William R. Greendyke, Julie Harrison, Maria Mokrzycka, Paul Trahan and Emily D. Wolf of Norton Rose Fulbright and Rusty Hardin, Leah M. Graham, Jennifer Brevorka and Emily Smith of Rusty Hardin & Associates.
The case number in the bankruptcy fee case is 23-00645.