Cozen O’Connor is facing allegations that it failed to properly handle conflicts in a multimillion-dollar construction law arbitration after hiring a group of construction lawyers from Pepper Hamilton.
When it announced the hires in April, Cozen O’Connor said the new partners would help elevate the construction practice on a national and international scale. But a former client of those partners, Henry McNeil, alleges that the firm gained an unfair advantage for its client, E.B. Mahoney Brothers, through the lateral hires.
McNeil filed a complaint late last month in the Philadelphia Court of Common Pleas, seeking to disqualify Cozen O’Connor from representing Mahoney under the Pennsylvania Rules of Professional Conduct. McNeil had worked with lawyers from Pepper Hamilton for over a year in his arbitration claims against Mahoney, until they left for Cozen O’Connor.
“When Cozen [O’Connor] poached McNeil’s attorneys from Pepper in the midst of an ongoing litigation, it knew that its ongoing representation of Mahoney would create an irreconcilable conflict under the Pennsylvania Rules of Professional Conduct, and it knowingly assumed that risk, and knowingly failed to timely implement an appropriate screen and give notice of that screen to McNeil,” the complaint alleged. “Cozen’s actions improperly provide its client, Mahoney, with an advantage in the litigation.”
According to the complaint, McNeil hired Mahoney as a general contractor for a multimillion-dollar residential construction project in the Chestnut Hill neighborhood of Philadelphia. But the project was not completed, the complaint said, and McNeil pursued claims against the contractor in arbitration, alleging that Mahoney was negligent and left him “with a shoddily-built structure.”
For the arbitration, McNeil turned to Bruce Ficken, then chairman of Pepper Hamilton’s construction litigation group, as lead counsel. Jeffrey Mullen and Richard Foltz worked with Ficken on the case, the complaint said.
Cozen O’Connor partners Paul Leary Jr. and F. Brenden Coller represent Mahoney, the complaint said. In arbitration, Mahoney sought final payment for the construction project, but McNeil made a counterclaim, alleging the work was deficient.
In March 2017, Ficken stopped communicating with McNeil, the complaint alleged. McNeil then learned through other sources that Ficken, Mullen and two other members of Pepper Hamilton’s construction litigation group had left for Cozen O’Connor. Foltz remained, but did not have sufficient knowledge about the case, the complaint said.
“At a critical point in the arbitration process, McNeil suddenly found himself with no legal representation, and no information about his case, while his former lawyers were now working at the opposing party’s law firm,” the complaint said.
McNeil then hired Blank Rome to represent him.
In his complaint, McNeil alleged that Rule 1.10(b) of the Pennsylvania Rules of Professional Conduct requires Cozen O’Connor to be disqualified from representing Mahoney in the arbitration. He alleged that the firm failed to implement a screen before Ficken and Mullen joined, to prevent sharing of information about the case, and only did so after McNeil’s new lawyers requested that Cozen O’Connor withdraw from its representation of Mahoney.
“Implementation of a screen on or about May 15, 2017, was far too late under Pennsylvania law,” the complaint alleged. “A month’s delay in the implementation of a screen in a sensitive, ongoing matter such as this is akin to no screen at all.”
McNeil also pointed out that Leary and Ficken are now both leaders within the litigation department at Cozen O’Connor, and likely work closely together.
James Smith, Daniel Rhynhart and Louis Abrams of Blank Rome are representing McNeil.
Cozen O’Connor did not immediately respond to a request for comment. Pepper Hamilton declined to comment.